The Federal Reserve Board and the Federal Deposit Insurance Corporation have released the findings of their joint review of the resolution plans (also known as living wills) submitted by the eight most significant and most complex domestic banking organizations in 2021.
Resolution plans must describe a financial company’s strategy for the rapid and orderly resolution of bankruptcy in the event of its material financial distress or failure. The agencies identified a shortcoming in Citigroup Inc.’s resolution plan and did not identify any other shortcomings or deficiencies in the plans from the other banking organizations.
In Citigroup’s resolution plan, the agencies found a shortcoming related to data quality and data management concerns previously identified by the Board in its October 2020 enforcement action.
The agencies previously identified shortcomings in the 2019 plans of Bank of America Corporation, Bank of New York Mellon Corporation, Citigroup, Morgan Stanley, State Street Corporation, and Wells Fargo & Company, related to the ability of each firm to reliably produce, in stressed conditions, data needed to execute its resolution strategy. The agencies determined that the 2021 resolution plans of these firms successfully addressed those shortcomings.
The agencies have provided feedback letters to each of the firms. The letters note the continued development of firms’ resolution strategies and capabilities and the expectation that work will continue.
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