Deadlines for submission dates of “living wills” have been extended by 90 days for large foreign banks, and large and foreign banks under the “large bank regulatory framework,” two federal banking agencies said Wednesday.
In a release, the Federal Deposit Insurance Corp. (FDIC) and Federal Reserve said the deadline for submission of the resolution plans from the large foreign banks would be extended by 90 days (to Sept. 29). Banks affected by the extension are Barclays, Credit Suisse, Deutsche Bank, and UBS. The deadline for the large domestic and foreign banks’ submission is the same date.
The agencies said the extension was made “In light of the challenges arising from the coronavirus response.”
The agencies noted that the resolution plans (commonly known as living wills), must describe each company’s strategy for rapid and orderly resolution in bankruptcy in the event of material financial distress or failure of the company. For foreign banks, resolution plans are focused on U.S. operations.
The living wills for the large foreign banks are required, the agencies said, to address “shortcomings” (also known as “certain weaknesses”) previously identified by the agencies in their supervision of the banks.
The living wills for the large foreign and domestic banks are for those in Categories II and III of the agencies’ large bank regulatory framework. Financial institutions in those categories are “triennial full filers” required to submit their living wills every three years and alternate between full and targeted resolution plans.
The agencies pointed out that targeted resolution plans for the eight global systemically important banking (GSIB) organizations will remain due by July 1, 2021. The agencies will monitor conditions and may adjust this deadline if warranted, they stated. GSIBs are “biennial filers,” submitting resolution plans every two years and alternating between full and targeted resolution plans.