Agencies Invite Comment on Modifications to Resolution Plan Requirements; Proposal Keeps Existing Requirements for Largest Firms and Reduces Requirements for Firms with Less Risk — 2019-04-16

The Federal Reserve Board and the Federal Deposit Insurance Corporation on Tuesday invited public comment on a proposal modifying their resolution plan requirements for large banking firms. The proposal would keep existing resolution plan expectations in place for the largest firms, while reducing requirements for smaller firms that pose less risk. Resolution plans, also known as living wills, describe a firm’s strategy for rapid and orderly resolution under bankruptcy in the event of material financial distress or failure of the firm. Since the resolution planning requirements took effect in 2012, large firms have improved their resolution strategies and governance, refined their estimates of liquidity and capital needs in resolution, and simplified their legal structures. These changes have made the firms substantially more resilient.