U.S. to release details on banks' resolution plans
WASHINGTON, June 29 |
WASHINGTON, June 29 (Reuters) -
U.S. regulators on Tuesday will release details of the largest banks' "living wills" that will describe how the companies can be dismantled if they become insolvent, an official with the Federal Deposit Insurance Corporation said on F rid ay.
The FDIC and Federal Reserve will provide a general description of the banks' resolution strategies, as well as some financial information, he said.
Nine of the largest banks are required to submit by Monday contingency plans that were called for in the 2010 Dodd-Frank financial oversight law. The plans aim to ease concerns that some banks are too big to fail.
The nine banks are Bank of America, Barclays , Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Morgan Stanley and UBS.
If the extensive planning and review process works as proponents hope, big banks will become less hazardous to ta xpayers an d regulators will be more confident that they can let wounded institutions die without wrecking the economy.
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One of the key concerns for banks on the living will requirement has been how much information regulators will disclose.
After the proposed rule was released last April, large U.S. banks said regulators need to do more to ensure that the plans remain confidential and are not subject to disclosure through lawsuits or Freedom of Information Act requests.
The FDIC official took pains to say the public information release on Tuesday would include only a very "high level" description of the bank's resolution strategy.
The release will also include the disclosure of the names of the material entities, descriptions of the core businesses and certain financial information, such as assets, liabilities, derivatives activities and hedging activities.
The official said it is not clear how recent the financial information will be.
Regulators have to give feedback to the banks on the initial plans by September. They can force changes to the structure of banks or other large financial companies if they believe the institution could not easily be liquidated once in trouble.
Other large banks will have until July and December of next year to hand in their plans, according to the FDIC. Eventually about 125 banks are expected to submit plans, according to the FDIC. There are about 7,300 banks in the United States.
The rules give the banks a series of chances to refine their plans. But if banks cannot come up with feasible liquidation plans, regulators could order the banks to get rid of businesses.
Regulators and the big banks have been meeting since January on what the plans are expected to include. Fed and FDIC officials have said they expect the back-and-forth to continue once the plans have been submitted.
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