The FDIC and Federal Reserve recently published their feedback letters for the resolution plans submitted by the largest banks, although FDIC board member and Comptroller of the Currency Jonathan Gould abstained from voting for the letters’ release, as he believes there are problems with the current resolution planning process.
Resolution plans, also known as “living wills,” describe a banking organization’s strategy for orderly resolution in the event of material financial distress or failure. In a joint statement, the FDIC and Fed said they conducted a joint review of 2025 resolution plans submitted by the eight largest U.S. banks and 56 foreign banks. They did not identify any shortcomings or deficiencies in the submissions.
In a separate statement, Gould outlined his objections to a “seriously flawed” and “extralegal process” that perpetuates regulators’ history of “imposing binding, onerous requirements of questionable provenance and efficacy without prior notice or opportunity for comment.”
“I am skeptical that there is much incremental value in this exercise,” he said. “We need to, instead, extend the time between submissions and take a hard look at the resolution planning ‘guidance’ and other feedback that has led to binding requirements and significant burden without commensurate value.”
