WASHINGTON (Reuters) - Eight of the largest U.S. banks and 82 foreign banks will have an extra year to submit their so-called living wills outlining how they would be unwound in the event of bankruptcy, the Federal Reserve said on Thursday.
The extension granted by the Fed and the Federal Deposit Insurance Corporation (FDIC) forms part of a broader effort by financial regulators to ease onerous post-crisis regulations under Republican President Donald Trump’s pro-growth agenda.
“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. Today’s action is a step towards that end,” the Fed said in a statement.
The eight large domestic banks will have until July 1, 2019 to file their plans, while the 82 foreign banks will have until Dec. 31, 2018.
The eight U.S. banks granted the extension are Bank of America Corp (BAC.N), Citigroup Inc (C.N), Goldman Sachs Group Inc (GS.N), JPMorgan Chase & Co (JPM.N), Morgan Stanley (MS.N), State Street Corp (STT.N), Wells Fargo & Co (WFC.N) and Bank of New York Mellon Corp (BK.N).
Under the Dodd-Frank reform act, the largest U.S. banks must present plans that explain how they would be unwound in the case of a financial crisis without shaking the broader global financial system.
The regulators are currently reviewing plans submitted by the big eight banks on July 1. The extension will not affect the review process, the Fed said.
Banks have long argued that the annual cycle for submitting living wills - which can comprise thousands of pages - is too onerous.
In a June 12 report outlining Trump’s financial de-regulatory reform agenda, the U.S. Treasury recommended extending the cycle to two years, revising the threshold for banks that must submit living wills, and increasing the transparency of guidance regulators feedback on to banks on the plans.
Reporting by Patrick Rucker; Editing by Michelle Price and Lisa Shumaker