US Agencies Adopt Final Guidance for Resolution Plan Submissions
The US Agencies (FED and FDIC) are adopting the final guidance for the 2019 and subsequent resolution plan submissions by the eight largest, complex U.S. banking organizations. The agencies also announced that the resolution plans of four foreign-based banks had weaknesses, but did not have "deficiencies," which are weaknesses severe enough to result in additional prudential requirements if not corrected. The agencies sent feedback letters to each firm detailing the shortcomings and specific actions that can be taken to address them. The firms must address the shortcomings in their next resolution plans, which are due July 01, 2020, and are expected to implement certain resolution projects in the interim.
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. These shortcomings in the four firms' plans include weaknesses in how each firm communicates and coordinates between its U.S. operations and its foreign parent in stress. Credit Suisse also had a shortcoming related to estimating the liquidity needs of its U.S. intermediate holding company in a resolution. For foreign banking organizations, resolution plans are focused on their U.S. operations; however, the agencies acknowledge that the preferred outcome for these four foreign-based banks is a successful home country resolution using a single point of entry resolution strategy. Since the 2007 financial crisis, the four firms have improved their resolvability by significantly reducing the size and risk profiles of their U.S. operations and increasing their capital and liquidity levels. The resolvability of firms will change, as both the firms and markets continue to evolve. The agencies expect the firms to remain vigilant in assessing their resolvability.
The finalized resolution plan guidance for the eight largest and most complex domestic banking organizations is largely similar to the proposal issued in June 2018 and provides additional information for the firms regarding their resolution planning capabilities in areas such as capital, liquidity, and payment, clearing, and settlement activities. While the capital and liquidity sections of the final guidance remain largely unchanged from the proposed guidance and the guidance from 2016, the agencies intend to provide additional information on resolution liquidity and internal loss absorbing capacity in the future.
Related Links
- Joint Press Release
- Final Guidance (PDF)
- Letter to Barclays (PDF)
- Letter to Credit Suisse (PDF)
- Letter to Deutsche Bank (PDF)
- Letter to UBS (PDF)
Keywords: Americas, US, Banking, Resolution Plans, Guidance, Dodd Frank Act, FED
Related Articles
|
News
ECB Updates Validation Checks and List of Identifiers Under AnaCreditECB updated the AnaCredit validation checks (Version 1.4) and the list of national identifiers (version 2.4) for AnaCredit reporting.
March 21, 2019
WebPage
Regulatory News
|
|
News
BCBS Publishes Results of the Basel III Monitoring ExerciseBCBS published results of the Basel III monitoring exercise based on data as of June 30, 2018.
March 20, 2019
WebPage
Regulatory News
|
|
News
EBA, FCA, and PRA Agree on MoU Template for Supervisory CooperationEBA, FCA, and PRA announced that they have agreed on a template for the Memorandum of Understanding (MoU) that sets out the expectations for supervisory cooperation and information-sharing arrangements between UK and EU/European Economic Area national authorities.
March 20, 2019
WebPage
Regulatory News
|
|
News
EBA Publishes Reports Monitoring the Implementation of Basel III in EUEBA published two reports measuring the impact of implementing the final Basel III reforms and monitoring the implementation of liquidity measures in EU.
March 20, 2019
WebPage
Regulatory News
|
|
News
HKMA Publishes CoP on Loss-Absorbing Capacity Requirements of BanksHKMA issued, in relation to the Financial Institutions Resolution (Loss-Absorbing Capacity Requirements—Banking Sector) Rules (LAC Rules) a chapter of a code of practice (LAC CoP) under section 196 of the Financial Institutions Resolution Ordinance (FIRO).
March 20, 2019
WebPage
Regulatory News
|
|
News
BCBS Publishes Results of Survey on Proportionality in Bank RegulationBCBS published a report presenting the results of a survey conducted on proportionality practices in bank regulation and supervision.
March 19, 2019
WebPage
Regulatory News
|
|
News
US Agencies Adopt Interim Rule to Facilitate Transfers of Legacy SwapsUS Agencies (FCA, FDIC, FED, FHFA, and OCC) are adopting and inviting comments on an interim final rule.
March 19, 2019
WebPage
Regulatory News
|
|
News
HKMA Expects Banks to Manage Risks Related to Crypto-Asset ExposuresHKMA issued a statement announcing that it expects authorized institutions to take note of the BCBS statement on crypto-assets and its prudential expectations.
March 18, 2019
WebPage
Regulatory News
|
|
News
SNB Issues Form on Solvency Risk of Counterparties in Interbank SectorSNB released form (Version 5.00) and related documentation for reporting solvency risk of counterparties in the interbank sector.
March 18, 2019
WebPage
Regulatory News
|
|
News
EIOPA Requests Data on LTG Measures from Insurers Under Solvency IIEIOPA has requested the European Economic Area insurance undertakings, which are subject to Solvency II, to provide information on the long-term guarantee (LTG) measures.
March 18, 2019
WebPage
Regulatory News
|
