This story appeared in Bank Digest.
The Federal Deposit Insurance Corporation and Federal Reserve Board have announced that the resolution plans of four foreign-based banks had weaknesses but not "deficiencies," which are weaknesses severe enough to result in additional prudential requirements if not corrected. Resolution plans, commonly known as living wills, are required by the Dodd-Frank Act and must describe each company's strategy for rapid and orderly resolution under bankruptcy in the event of material financial distress or failure of the company.
The agencies determined that the plans of the four firms--Barclays, Credit Suisse, Deutsche Bank, and UBS--have "shortcomings," which are less severe weaknesses that require additional work in their next plan. The agencies sent feedback letters to each firm detailing the shortcomings and specific actions that can be taken to address them.
The agencies have also announced that they have finalized resolution plan guidance applying to the eight largest and most complex domestic banking organizations.