US Agencies Propose Resolution Plan Submission Guide for Foreign Banks
US Agencies (FDIC and FED) proposed guidance for the 2021 and subsequent resolution plan submissions by certain foreign banking organizations or FBOs. The proposed guidance is meant to assist these firms in developing their resolution plans, which are required to be submitted pursuant to Section 165(d) of the Dodd-Frank Act. The proposed guidance, which is largely based on prior guidance, describes the agencies' expectations regarding a number of key vulnerabilities in plans for a rapid and orderly resolution under the U.S. Bankruptcy Code. The agencies invite public comment on all aspects of the proposed guidance. Comment period ends on May 05, 2020.
Section 165(d) of the Dodd-Frank Act and the jointly issued implementing regulation require certain financial companies, including certain foreign-based firms, to report periodically, to FED and FDIC, their plans for rapid and orderly resolution, under the U.S. Bankruptcy Code, in the event of material financial distress or failure. The scope of application of the proposed guidance would be foreign banking organizations that are triennial full filers and whose intermediate holding companies have a score of 250 or more under the second methodology (method 2) of the global systemically important bank (G-SIB) surcharge framework. The proposed guidance also updates certain aspects of prior guidance based, in part, on the agencies' review of certain foreign banking organizations' most recent resolution plan submissions and changes to the resolution planning rule.
The proposed guidance begins with a description of the proposed scoping methodology and is then organized into eight substantive areas, consistent with the 2018 foreign banking organization guidance. These areas are capital, liquidity, governance mechanisms, operational, branches, group resolution plan, legal entity rationalization and separability, and derivatives and trading activities. Each substantive area is important to firms in implementing their U.S. resolution strategy, as each plays a part in helping to ensure that the firms can be resolved in a rapid and orderly manner. The proposed guidance would describe the agencies' expectations for each of these areas.
The proposal would update the payment, clearing, and settlement activities and derivatives and trading activities areas of the 2018 foreign banking organization guidance to reflect the agencies' review of certain Specified foreign banking organizations' 2018 resolution plans and revisions contained in the 2019 domestic guidance. It would also make minor clarifications to certain areas of the 2018 foreign banking organization guidance in light of the 2019 revisions. In general, the proposed revisions to the guidance are intended to streamline the firms' submissions and to provide additional clarity. In addition, the proposed guidance would consolidate all guidance applicable to the specified foreign banking organizations into a single document, which would provide the public with one source of applicable guidance to refer to.
Related Link: Federal Register Notice
Comment Due Date: May 05, 2020
Keywords: Americas, US, Banking, Resolution Plan, Foreign Banks, US Bankruptcy Code, Dodd-Frank Act, G-SIBs, Resolution Framework, US Agencies
Featured Experts

María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer

Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.

Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
SRB Decides on No Compensation to Certain Banco Popular StakeholdersRelated Articles
EC Consults on PSD2 and Open Finance; EU Reaches Agreement on DORA
The European Commission (EC) published a public consultation on the review of revised payment services directive (PSD2) and open finance.
EC Mandates ESAs to Propose Amendments to SFDR Technical Standards
The European Commission (EC) has issued two letters mandating the European Supervisory Authorities (ESAs) to jointly propose amendments to the regulatory technical standards under Sustainable Finance Disclosure Regulation or SFDR.
EBA Examines Supervisory Practices, Issues Deposits Reporting Template
The European Banking Authority (EBA) published its annual report on convergence of supervisory practices for 2021. Additionally, following a request from the European Commission (EC),
US Agency Publications Address Basel, Reporting, and CECL Developments
The Farm Credit Administration published, in the Federal Register, the final rule on implementation of the Current Expected Credit Losses (CECL) methodology for allowances
SEC Extends Comment Period on Climate Risk Disclosures
The U.S. Securities and Exchange Commission (SEC) looks set to intensify focus on crypto-assets and cyber risk and extended the comment period on the proposed rules to enhance and standardize climate-related disclosures for investors.
APRA Reduces Committed Liquidity Facility, Issues Other Updates
The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility and issued an update on the operational preparedness for zero and negative market interest rates.
CMF Consults on Basel Rules, Presents Roadmap to Address Climate Risks
The Commission for the Financial Market (CMF) in Chile published capital adequacy ratios (as of February 2022, January 2022, and December 2021) for 17 banks and for the banking system.
PRA Issues Statement on NPEs and Policy on Trading Activity Wind-Down
The Prudential Regulation Authority (PRA) issued a statement on the European Banking Authority (EBA) guidelines on management of non-performing exposures (NPEs) and forborne exposures.
EBA Updates Standards for 2023 Benchmarking of Internal Approaches
The European Banking Authority (EBA) updated the implementing technical standards that specify the data collection for the 2023 supervisory benchmarking exercise in relation to the internal approaches used in market risk, credit risk, and IFRS 9 accounting.
EIOPA Responds to Stakeholder Views on Blockchain in Insurance
The European Insurance and Occupational Pensions Authority (EIOPA) published a feedback statement on the responses received to the consultation on blockchain and smart contracts in insurance.