Forum Statement on Federal Reserve and FDIC Resolution Plan Review

17 Dec 2019

CONTACT: Barbara Hagenbaugh
(202) 457-8783

WASHINGTON, DC – Financial Services Forum President and CEO Kevin Fromer issued the following statement today after the announcement by the Federal Reserve Board and the Federal Deposit Insurance Corporation (FDIC) on the most recent living wills submitted by Forum member institutions:

The nation’s largest banks are strong, resilient, and resolvable. Forum member institutions do not have deficiencies in their living wills, as reaffirmed today by the Federal Reserve and FDIC.  The largest banks also have taken other steps to enhance resolvability, including vastly simplifying their organizational structures and balance sheets.  These institutions are capable of being resolved in an orderly way, without cost to taxpayers. 

“Many other significant steps have been taken by the nation’s largest banks and federal regulators during the past decade to help ensure the strength and safety of our financial system.  Forum member institutions have greatly increased the quality and quantity of their capital and liquidity – they have increased Tier 1 capital more than 42 percent since 2010 to $927 billion and more than doubled their high-quality liquid assets to $2.4 trillion.  Further, the Forum institutions have passed multiple stress tests in which they have shown they can continue to support the economy even during a significant economic downturn and, as noted recently by the Federal Reserve, have improved their risk management and corporate governance.”

 

Background:
The Dodd-Frank Act requires that large financial institutions submit resolution plans describing their material operating entities, business lines, and resolution strategies.  Each firm is required to describe its capital and liquidity resources that would be available in resolution and to provide a roadmap for an orderly resolution under bankruptcy, without taxpayer support.  The Federal Reserve and FDIC—the agencies charged with reviewing and assessing living wills—today said they did not identify any deficiencies in the recent submissions by Forum member institutions.  These agencies reached the same conclusion when they last made determinations in December 2017, further demonstrating the ongoing commitment of Forum member institutions to the safety of the financial system. 

To learn more about the advancements by Forum member institutions in the past decade to promote financial stability, read Federal Reserve Points to Improved Resiliency and Risk Management at Large Banks, Charting Progress on Too Big to Fail, and the Forum’s comment letter to the Financial Stability Board regarding Too-Big-to-Fail reforms.  

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The Financial Services Forum is an economic policy and advocacy organization whose members are the chief executive officers of the eight largest and most diversified financial institutions headquartered in the United States.  Forum member institutions are a leading source of lending and investment in the United States and serve millions of consumers, businesses, investors, and communities throughout the country. The Forum promotes policies that support savings and investment, deep and liquid capital markets, a competitive global marketplace, and a sound financial system.

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