Regulators Give Passing Grade to 'Living Wills' for Regional Banks
25 March 2017 - 12:45AM
Dow Jones News
By Ryan Tracy
WASHINGTON -- U.S. regulators gave 15 regional banks a passing
grade on their "living will" plans for bankruptcy, a victory win
for those firms that demonstrates how their regulatory environment
is significantly less stressful than for the largest U.S.
banks.
The verdicts from the Federal Reserve and Federal Deposit
Insurance Corp. means regional banks -- including U.S. Bancorp, PNC
Financial Services Group Inc., and Capital One Financial Corp. --
have for the moment satisfied regulators that they have feasible
plans for going through bankruptcy without needing a taxpayer
bailout.
The plans, known as "living wills," are required under the 2010
Dodd-Frank financial law. The exercise is significant for banks
because if regulators don't approve of them, sanctions such as
higher capital requirements or forced breakups can be imposed. This
is the first time regulators have issued a judgment about regional
banks' plans. The firms will have to continue submitting updated
plans in the future.
The one exception Friday was Northern Trust Corp. Regulators
said they concluded that firm has "a number of shortcomings" in its
living will, related to the funding and internal services available
to keep the firm operating during a bankruptcy. They required the
firm to address the perceived shortcomings by the end of this
year.
Write to Ryan Tracy at ryan.tracy@wsj.com
(END) Dow Jones Newswires
March 24, 2017 09:30 ET (13:30 GMT)
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