Federal Reserve Board – Agencies announce results of resolution plan review for largest and most complex domestic banks

The Federal Reserve Board and the Federal Deposit Insurance coverage Company introduced on Wednesday the outcomes of their joint overview of the decision plans—often known as dwelling wills—that the eight largest and most advanced home banking organizations submitted in 2021. Decision plans should describe a monetary firm’s technique for speedy and orderly decision in chapter within the occasion of its materials monetary misery or failure. The companies recognized a shortcoming in Citigroup Inc.’s decision plan and didn’t determine some other shortcomings or deficiencies within the plans from the opposite banking organizations.

A shortcoming is a weak point that raises questions concerning the feasibility of the plan and will lead to extra necessities if not corrected, however just isn’t as extreme as a deficiency. In Citigroup’s decision plan, the companies discovered a shortcoming associated to information high quality and information administration issues beforehand recognized by the Board in its October 2020 enforcement motion.

The companies beforehand recognized shortcomings within the 2019 plans of Financial institution of America Company, The Financial institution of New York Mellon Company, Citigroup, Morgan Stanley, State Road Company, and Wells Fargo & Firm, associated to the flexibility of every agency to reliably produce, in careworn situations, information wanted to execute its decision technique. The companies decided that the 2021 decision plans of those companies efficiently addressed these shortcomings.

The companies have offered suggestions letters to every of the companies. The letters word continued growth of companies’ decision methods and capabilities and the expectation that work will proceed. The suggestions letters additionally word the expectation that the subsequent plan overview will embrace expanded testing of the agency’s decision capabilities. For Citigroup the letter describes the precise weaknesses ensuing within the shortcoming and the actions required by the companies. A plan to deal with the shortcoming is because of the companies by January 31, 2023.