2017 public sections: The resolution evolution

Last week’s release of the public sections of the 2017 resolution plans submitted by the eight US G-SIBs provides a unique window into their resolution planning efforts. The plans clearly describe how they have enhanced their resolution plans, demonstrating that the process has developed from a one-time compliance “project” to an important strategic consideration for BAU financial and operational choices.

The plans reflect the first full plans since the Fed and FDIC (Agencies) determined in April 2016 that all of the G-SIBs’ 2015 plans had either deficiencies making the plans not-credible, less-serious shortcomings, or both. With a strong advocacy sub-text, all public sections state that deficiencies and shortcomings have been remediated and that the banks are now resolvable.

The Agencies, however, have traditionally been skeptical of such confidence and therefore, we expect them to want proof that all is as described, potentially through a horizontal testing phase. As such, we do not expect any lowering of the credibility bar for the largest banks although there are signs that the Agencies may reduce the submission frequency or the volume of required information firms need to submit. 

Regulatory brief

A publication of PwC's financial services regulatory practice

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Julien Courbe
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