Agencies say “living will” guidance for large banks is forthcoming

Bank Regulatory Federal Issues FDIC Federal Reserve Agency Rule-Making & Guidance

On September 30, the FDIC and Federal Reserve Board jointly announced that resolution plan guidance for Category II and Category III banking organizations is forthcoming. Large banks that fall withing these categories are generally those with more than $250 billion in total assets but that are not global systemically important banks (G-SIBs). “Larger and more complex banks are already subject to guidance from the agencies,” the agencies said, explaining that Category II and III banks have not received resolution plan guidance yet. These plans—commonly known as “living wills”—outline a bank’s strategy for rapid and orderly resolution under bankruptcy in the event of financial distress or failure. An opportunity for public comment on the guidance will be provided before it is finalized.