US G-SIBs’ resolution plan progress reports

October 2016

Overview

This week, the Federal Reserve and the FDIC (collectively, “Agencies”) released the public portions of the resolution plan progress reports submitted on October 1st  by the eight largest US banking institutions (“October Submissions”). In April, the Agencies jointly determined five of the eight banks’ 2015 resolution plans to be “not credible,” while all eight were found to have either “deficiencies,” “shortcomings,” or both.The Agencies identified the deficiencies and shortcomings across six areas, and also issued significant new guidance on these areas for incorporation in the banks’ next full submission. The banks had until October 1st to remediate all deficiencies cited in the April feedback, but were given until their next full resolution plan filing date (which was pushed back by one year to July 1, 2017) to fully address shortcomings. In their October Submissions, the banks were required to include a description of how deficiencies were remediated and the actions taken so far to address shortcomings. Each of the five banks with plans determined to be “not credible” declared in their October Submission that they believe their deficiencies are now remediated. Time will tell if the Agencies agree.

 

  1. The October Submissions’ public summaries provide new insight into the resolution plans of the largest US banks.
  2. There is evidence of real change to banks’ legal entity structures.
  3. The Board of Directors is getting more engaged.
  4. Resolution planning requires extensive human capital.
  5. More banks’ senior executives are taking responsibility.
  6. The October Submissions are easier for the public to understand than previous public sections.
  7. The industry may be gravitating toward similar solutions for some deficiencies.
  8. Feedback is unlikely to come quickly.
  9. More hurdles yet to come.
  10. What’s next for resolution planning?
    • Feedback for foreign banks
    • Updates for December filers
    • Rulemaking ahead

Contact us

Dan Ryan
Financial Services Advisory Leader
Tel: +1 (646) 471 8488
Email

Alison Gilmore
US Asset and Wealth Management Marketing Leader
Tel: +1 (646) 471 0588
Email

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