Fed, FDIC Issue Model Template for Resolution Plans
The Federal Reserve Board and the Federal Deposit Insurance Corporation (FDIC) recently released a template for tailored resolution plans that certain firms will be submitting for the first time later this year. In formulating what are commonly called "living wills," companies can use the template if they choose, but it is not required.
The Dodd-Frank Wall Street Reform and Consumer Protection Act mandates that bank holding companies with assets of $50 billion or more and nonbank financial companies designated for enhanced prudential supervision by the Financial Stability Oversight Council submit resolution plans to the Federal Reserve and the FDIC. Initial resolution plans are due to the Fed and the FDIC by December 31 for one group of firms—generally those with less than $100 billion in total nonbank assets or $100 billion in U.S. nonbank assets if they are a foreign-based company.
Under the rule previously issued by the agencies, smaller and less complex firms can file a tailored resolution plan. A tailored resolution plan focuses on the nonbanking operations of the firm and on the interconnections and interdependencies between the nonbanking and banking operations. The optional template is intended to help firms prepare tailored resolution plans.
September 18, 2013