WASHINGTON — Regulators will give eight of the largest U.S. banks an extra year to file upcoming resolution plans, and suggested they may stretch out the filing schedule on a more ongoing basis.
The extension means the next plans will be due in 2019. The plans, which so far have been updated annually, span thousands of pages because of the size and complexity of the firms. New iterations are influenced in part by regulatory feedback, yet banks often have to start work on an update before regulators have weighed in on their previous version. The regulators are still reviewing the 2017 plans that were submitted in July.
“The agencies continue to explore ways to improve the resolution planning process and believe it is worthwhile to consider extending the cycle for living will submissions from annual to once every two years,” the Federal Reserve Board and Federal Deposit Insurance Corp., which under the Dodd-Frank Act review the living wills, said Thursday in a joint statement. “Today's action is a step toward that end.”
The extension will give Bank of America, Bank of New York Mellon, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, State Street and Wells Fargo until July 1, 2019, to file the blueprints, known as living wills.
“The extension will provide the time needed for firms to remediate any weaknesses identified in their July 2017 submissions and to prepare and improve their next resolution plan submissions,” the Fed and the FDIC said.
Dodd-Frank requires all banking firms with at least $50 billion of assets to complete and update the plans. The banks are divided into filing groups based mostly on their size, with different deadlines. The Fed and the FDIC also said they are giving 82 foreign banks with limited U.S. operations an additional year, to Dec. 31, 2018, to file their resolution plans.