The Federal Reserve and FDIC today determined that the nation’s eight largest banks did not have deficiencies in their most recent resolution plans, which detail how they would be resolved in the event of failure. Deficiencies would have required them to resubmit their plans and possibly face more stringent requirements.
Regulators did note that six firms—Bank of America, Bank of New York Mellon, Citigroup, Morgan Stanley, State Street and Wells Fargo—have “shortcomings” in their plans: less severe weaknesses that will need to be addressed by March 31, 2020. The agencies did not identify shortcomings in the plans submitted by Goldman Sachs or JPMorgan Chase.
The agencies signaled that they expect to focus on testing the resolution capabilities of the firms when reviewing their next plans, and emphasized the need for firms to “remain vigilant as markets change and as firms’ activities, structures and risk profiles change.”