Final guidance on resolution plans for banks north of $250 billion issued jointly by agencies

Guidance to help certain large banks further develop their resolution plans – “largely similar” to that proposed last year – was made final late Monday when the Federal Reserve joined the federal bank deposit insurance agency in approving the plan.

The submission deadline for resolution plans by banks subject to the guidance is also extended to Oct. 1, 2015, rather than March 31, 2025, as proposed, the agency said.

The Fed said the final guidance it issued with the Federal Deposit Insurance Corp. (FDIC, which approved the guidance last week at its board meeting) incorporates comments received after the proposal was issued in August 2023.

“The guidance generally applies to domestic and foreign banks with more than $250 billion in total assets but that are not the largest and most complex banks, for which guidance is already in place,” the Fed said in a release. “The guidance addresses the specific characteristics of, and risks posed by, this group of banks.”

The joint guidance is organized in the areas of capital, liquidity, and operational capabilities that could be needed in resolution, the Fed said. However, the Fed said, the guidance provides agency expectations for both single point of entry and multiple point of entry resolution strategies, which are different strategies banks have adopted for their rapid and orderly resolution. That is distinct from the guidance to the largest and most complex banks, the agency said.

The guidance also recognizes that the preferred resolution outcome for foreign banks is often a successful home country-led resolution, the FDIC saidl. It also guides foreign banks on how to address the global resolution plan in their U.S. plan, according to the agency.

Federal Reserve Board issues final joint guidance to help certain large banks further develop their resolution plans