Fed, FDIC Provide Guidance on Resolution Plans

Following their review of resolution plans submitted last year, the Federal Reserve and FDIC yesterday said they are providing additional guidance — including areas for improvement in some cases — to 119 financial firms that will be expected to file updated resolution plans in December. The agencies also released an updated template for institutions filing tailored resolution plans.

The resolution plan process — which applies to U.S. bank holding companies with assets of more than $50 billion, nonbanks designated as systemically important by the Financial Stability Oversight Council and large foreign banks with U.S. operations — requires these large institutions to describe their strategy for a rapid and orderly wind-down in the event of stress. Planning requirements are tiered based on a firm’s level of complexity.

Yesterday’s guidance applies to banks that submit resolution plans in December. Bank holding companies with more than $100 billion in assets submit resolution plans each year in July.