The FDIC announced today plans to alter its approach to insured depository institution resolution planning. According to a news release, the goal is to focus the IDI resolution planning process “on the operational information most relevant for the FDIC to resolve a large bank through a weekend sale or operate the institution for a short period of time while rapidly marketing the institution.”
For full resolution submissions during the upcoming submission cycle, the FDIC has exempted IDIs from certain content requirements, such as the requirements to use a bridge bank strategy and a hypothetical failure scenario in the plan, according to the release.
“The 2023 bank failures served as a reminder of how costly and damaging a bridge bank solution can be,” said Acting Chairman Travis Hill, noting that the action is “one step in shifting our approach toward maximizing the likelihood of a lower cost and more stabilizing resolution for large regional banks.” The agency also issued an updated set of frequently asked questions describing the exemptions. The FDIC said it is still evaluating other provisions in the IDI rule, and their applicability to different cohorts of banks.
