Last words

19 December 2017 By Gina Chon Follow @GinaChon

Watchdogs cleared the resolution plans of the eight biggest firms though four, including Wells Fargo, need improvements. It’s a far cry from 2016, when five failed outright. It’s progress not just because banks are safer, but because they finally understand what regulators want.

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None of the living wills of the eight largest U.S. banks had deficiencies, the Federal Deposit Insurance Corp and the Federal Reserve Board said on Dec. 19. The resolution plans are required by the Dodd-Frank Act and lay out a company’s strategy for how to wind themselves down under bankruptcy in the event of a crisis.

A finding of deficiencies requires resubmissions of the plans and could result in additional penalties. Four of the firms were found to have shortcomings, which requires additional improvements in their next plan. Those banks are Bank of America, Goldman Sachs, Morgan Stanley, and Wells Fargo. The other banks that were cleared in the exercise are Bank of New York Mellon, Citigroup, JPMorgan Chase and State Street.

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