To help certain banks with total assets exceeding $250 billion with resolution planning, the Federal Deposit Insurance Corp. (FDIC) approved final joint guidance largely similar to one proposed in August last year but revised in response to stakeholder comments.
The FDIC developed the guidance jointly with the Federal Reserve to apply to domestic and foreign banks considered systemically important but categorized at a level below that of the largest and most complex institutions in terms of their risk profiles. The guidance addresses the specific characteristics of, and risks posed by, this group of banks.
“In particular, this guidance would apply to the ‘triennial full filers,’ a group that includes the largest regional banks,” FDIC Chair Martin Gruenberg said in a statement. “The implementation of the Title I rule has been an iterative process aimed at strengthening the resolution planning capabilities of financial institutions subject to the rule. To assist covered companies in developing their resolution plan submissions and operational capabilities, the agencies have provided feedback on individual plan submissions, issued guidance to certain groups of covered companies, and issued answers to frequently asked questions. The agencies have not, however, thus far issued guidance to domestic triennial full filers or most of the foreign-based triennial full filers.”
Capital, liquidity, and operational capabilities are among the key areas of potential vulnerability regulators addressed in the guidance. It is distinguishable from guidance targeting the largest and most complex banks by its inclusion of agency expectations for both single-point-of-entry and multiple-point-of-entry resolution strategies, which are different strategies banks have adopted for their resolution. It also acknowledges that a foreign bank’s preferred resolution outcome is often one led by their home country and includes guides for these banks on how to address the global resolution plan in their U.S. plan.
The agencies also announced plans to extend the deadline for resolution plan submissions for banks covered by the guidance to provide reasonable time for banks to consider the final guidance as they develop their plan submissions. Banks must submit their resolution plans by Oct. 1, 2025, instead of March 31, 2025.