In a significant step towards enhancing financial stability, the Federal Reserve Board and the Federal Deposit Insurance Corporation (FDIC) have unveiled the public sections of resolution plans for eight of the largest domestic banking institutions, along with 56 foreign banking organizations. These banks are expected to submit comprehensive resolution plans by July 1, 2025, outlining their strategies for managing potential financial crises.
Commonly referred to as “living wills,” these resolution plans are mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act. The plans are designed to provide a clear strategy for how a banking organization would navigate an orderly resolution under bankruptcy in the event of severe financial distress or failure. In an effort to enhance transparency, the regulations stipulate that these plans be divided into public and confidential sections, with each organization required to summarize essential elements in the public domain.
Additionally, the FDIC has released public segments of resolution plans from 12 large insured depository institutions (IDIs), complying with the FDIC’s IDI Rule. These IDI plans, which must also be submitted by the July 2025 deadline, aim to ensure the FDIC can effectively resolve an IDI in accordance with the Federal Deposit Insurance Act if needed.
The public sections of these resolution plans are currently accessible on the FDIC’s and the Federal Reserve Board’s websites, allowing stakeholders and the public to better understand how major banks plan to address potential risks to the financial system.
