Federal Reserve and FDIC Find Resolution Plans of Five U.S. Financial Institutions to be “Not Credible”
April 13, 2016
The Federal Reserve and the FDIC today provided feedback on the 2015 resolution plans filed by the eight “first-wave” domestic filers, and issued Guidance to govern their 2017 resolution plans. Most significantly, the Federal Reserve and the FDIC jointly determined that the resolution plans of five financial companies were “not credible” as required by the joint resolution planning rule, 12 C.F.R. Parts 243 and 381. Those five companies were Bank of America, Bank of New York Mellon, JP Morgan Chase, State Street, and Wells Fargo. The agencies were unable to agree on a joint determination for the 2015 resolution plans of Goldman Sachs and Morgan Stanley. The Federal Reserve, but not the FDIC, found Morgan Stanley’s plan to be “not credible”, while the agencies reached the reverse judgment on Goldman Sachs’ resolution plan. Finally, the Federal Reserve and the FDIC jointly found that, while the Citigroup plan had “shortcomings”, it was not determined to be “not credible.”
The agencies’ press release is available here. The agencies’ feedback summaries in the document “Resolution Plan Assessment Framework and Firm Determinations” are available here. “Guidance for 2017 §165(d) Annual Resolution Plan Submissions” for the domestic first-wave filers is available here.