Fed Board will consider ‘living will’ requirements for foreign, domestic banks

Proposed rules on prudential standards for foreign banking organizations (FBOs) and resolution plan requirements for both foreign and domestic banking firms will be considered by the Federal Reserve Board next week (April 8).

The central bank announced the meeting in a notice filed with the Federal Register, scheduled to be published Wednesday.

Resolution plans – also known as “living wills” – are required for the institutions under the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). Under that law, firms subject to filing the living wills must describe a firm’s strategy for rapid and orderly resolution under bankruptcy in the event of material financial distress or failure of the firm.

Last week, the three federal banking agencies (the Federal Reserve, the Federal Deposit Insurance Corp. (FDIC) and the Office of the Comptroller of the Currency (OCC)) announced that no deficiencies were identified in living wills for 14 large, domestic banking and financial firms. In a previous report with the same 14 firms, the agencies said they found deficiencies in only one: for Northern Trust Corp. However, they stated that the 2017 plan for Northern Trust “satisfactorily addressed these three shortcomings.”

Notice of Federal Reserve Board meeting