Wells Fargo and HSBC are among four banks that submitted "living wills," or road maps to help regulators safely dismantle them if they fail.
Royal Bank of Scotland and BNP Paribas also filed the documents before yesterday's deadline to the Federal Reserve and Federal Deposit Insurance Corp., which disclosed summaries today on its website.
The four represent a second tier of filers after larger banks began submitting living wills last year. Each document is meant to offer a step-by-step guide for unwinding a company through a bankruptcy without threatening the financial system.
The FDIC and Federal Reserve can force banks to divest business or make other changes to the plans, mandated by the 2010 Dodd-Frank Act, if regulators identify deficiencies. The FDIC also has the power to oversee a wind-down outside of the courts if U.S. officials believe that a failure would imperil the financial system.
The process started last year with an opening round of filings from 11 banks with more than $250 billion in U.S. non- bank assets, including JPMorgan Chase, Citigroup and Goldman Sachs, which must submit updated living wills by Oct. 1.
Jim Wigand, an FDIC official responsible for overseeing the plans, said last week that the initial living wills had "varying levels of quality, although they all had a ways to go." Whether some of the biggest banks can convince regulators that they can be put through bankruptcy safely is "an open question," said Wigand, who's leaving the FDIC later this year.