The public portions of resolution plans (also known as “living wills”) submitted July 1 by eight large domestic banking firms – and targeted to address the institutions’ response to events surrounding the COVID-19 pandemic – were released Monday by federal banking regulators.
Resolution plans, required under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) and amended by the 2018 financial regulatory relief statute, describe a firm’s strategy for rapid and orderly resolution under bankruptcy in the event of material financial distress or failure. Eight firms were required by the Federal Deposit Insurance Corp. (FDIC) and Federal Reserve to submit targeted resolution plans by this July 1: Bank of America Corporation; The Bank of New York Mellon Corporation; Citigroup Inc.; The Goldman Sachs Group, Inc.; JPMorgan Chase & Co.; Morgan Stanley; State Street Corporation; and Wells Fargo & Company.
The regulators tasked the institutions with preparing targeted plans that include core elements of a firm’s resolution plan – such as capital, liquidity, and recapitalization strategies – and show how the firm has integrated changes to and lessons learned from its response to the pandemic into its resolution planning process.
The regulators, writing the banks last year about the targeted plans, said they would review any remaining shortcomings from some institutions’ 2019 living wills. The agencies noted there had been shortcomings in the full 2019 resolution plans of Bank of America, Bank of New York Mellon, Citigroup, Morgan Stanley, State Street, and Wells Fargo.