FDIC and Federal Reserve Identify No Shortcomings in 15 Living Wills

The Federal Deposit Insurance Corporation and the Federal Reserve Board on 29 settembre 2026, published feedback letters on the 2025 resolution plans of 15 banking organizations with over $250 billion in assets, and the agencies did not identify any shortcomings or deficiencies in the submissions, according to a joint press release marked for release at 4:00 p.m. EDT. The letters respond to full resolution plans the agencies received on or before 1 ottobre 2025. The agencies also determined that the shortcoming previously identified in the 2021 resolution plan of BNP Paribas has been satisfactorily addressed.

Resolution plans, also known as living wills, describe a banking organization’s strategy for orderly resolution in the event of material financial distress or failure. Individual letters went to American Express Company, Barclays PLC (BCS ), BNP Paribas, Deutsche Bank AG (DB ), and UBS Group AG (UBSG.SW ). A template letter covered the ten additional Category II and III firms with plans due in ottobre 2025: Bank of Montreal; Mizuho Financial Group; Mitsubishi UFJ Financial (MUFG ) Group; Northern Trust Corporation (NTRS ); The PNC Financial Services (PNC ) Group; Royal Bank of Canada; Sumitomo Mitsui Financial Group; The Toronto Dominion Bank (TD ); Truist Financial Corporation (TFC ); and U.S. Bancorp (USB ).

Section 165(D) Filing Framework

Section 165(d) of the Dodd-Frank Wall Street Reform and Consumer Protection Act requires each bank holding company with $250 billion or more in total consolidated assets, certain bank holding companies with total consolidated assets between $100 billion and $250 billion, and any designated nonbank financial company to report to the agencies its plan for rapid and orderly resolution in the event of material financial distress or failure. A triennial full filer under the jointly issued Resolution Plan Rule must file every three years, alternating between full and targeted resolution plans.

Under Section 165(d), the agencies may jointly determine, based on their review, that a firm’s plan is “not credible or would not facilitate an orderly resolution of the company under Title 11” of the U.S. Bankruptcy Code, and the Resolution Plan Rule provides processes by which jointly identified shortcomings or deficiencies may be remedied. For a foreign-based covered company, the letters describe a preferred global resolution strategy of single point of entry, in which all material operations, including U.S. operations, would receive necessary support from the foreign parent and would not be required to enter resolution. The rule nonetheless requires each such firm to address a situation in which its U.S. subsidiaries and operations enter bankruptcy in the United States.

In the template letter, the agencies said they noted meaningful improvements over the firms’ prior submissions, including further development of resolution strategies and capabilities, and that the 2025 plans more clearly articulated the preferred strategies with greater detail. The plans discussed resolution capabilities, funding and liquidity, key assumptions, and each firm’s ability to execute its preferred strategy, as well as how legal entity structures support those strategies. The agencies also acknowledged that Royal Bank of Canada changed its preferred resolution strategy from a U.S. single point of entry strategy to a U.S. multiple point of entry strategy.

Firm-Specific Findings

The BNP Paribas letter is addressed to José Placido, chief executive officer of IHC and CIB Americas at BNP Paribas USA. It closes out the shortcoming the agencies identified in a 15 dicembre 2022, feedback letter on the firm’s 2021 plan, which failed to explain how the firm’s repurchase agreement activity, including daily trading and settlement, oversight, and risk management, would remain uninterrupted in the event of the failure of its U.S. broker-dealer. The 2025 plan described the firm’s strategy for affiliates to conduct the majority of those activities after the U.S. broker-dealer’s failure so the activities can continue, and the agencies concluded the plan satisfactorily addressed the shortcoming.

The UBS letter, addressed to Robert Karofsky, president of UBS Americas and chief executive officer of UBS Americas Holding LLC, states that UBS acquired Credit Suisse Group AG in 2023 and subsequently merged Credit Suisse into UBS. The agencies had identified two deficiencies in Credit Suisse’s 2021 resolution plan relating to its resolution planning governance and liquidity capabilities. The 2025 plan stated that the combined organization relies on UBS’s resolution planning capabilities, which were not the subject of any shortcoming or deficiency in UBS’s own 2021 submission, and the letter states the Credit Suisse deficiencies are no longer present.

The American Express letter (AXP ), addressed to Kerri Bernstein, executive vice president and corporate treasurer, identified no shortcomings or deficiencies but provided additional feedback on the plan’s preferred resolution strategy, known as the Coordinated Sale Strategy. The strategy anticipates a single buyer purchasing, in a coordinated sale, the assets of American Express National Bank (NBHC ) (AENB), Travel Related Services (TRS), and parent holding company AXP. TRS owns and controls most of the franchise value, including the card network, trademarks, systems, and operations, and according to the 2025 plan the strategy was chosen to maximize franchise value in resolution by keeping the integrated payments platform intact. The strategy is based on AXP and TRS filing for chapter 11 while the FDIC is simultaneously appointed receiver of AENB and transfers its assets and certain liabilities into a bridge depository institution, which would continue AENB’s operations while the debtors in possession arrange a sale of AXP’s and TRS’s assets under section 363 of the U.S. Bankruptcy Code.

The agencies concluded there is “significant uncertainty regarding the feasibility” of that process, in which a single bidder must be the highest bidder for both AENB’s assets and the chapter 11 assets. The letter cites the two separate and distinct resolution proceedings, with distinct timelines, statutory mandates, and decision-making processes; the FDIC’s general requirement to choose the least costly resolution option, which may not align with the winning bankruptcy bidder; and the FDIC’s general practice of not sharing bidder information or accepting contingent bids, steps the letter states would extend FDIC marketing timelines and could further erode the bridge institution’s franchise value. The agencies stated that American Express should review its preferred strategy for its 2028 resolution plan and, if it determines there are no viable options to address the challenges, consider selecting another preferred strategy, which could include one in which coordination with the FDIC is not necessary.

The Barclays and Deutsche Bank letters state that each firm’s 2025 plan was responsive to previously provided feedback. The agencies’ 15 dicembre 2022, letters had noted that each firm relied on a Resolution Liquidity Execution Need (RLEN) and Resolution Capital Execution Need (RCEN) framework to support the timely commencement of bankruptcy proceedings and continuity of operations of material entities, and stated that the firms should enhance their capital and liquidity resolution capabilities. The 2025 plans adequately described improvements to RCEN and RLEN capabilities, including the ability to accelerate business-as-usual processes to estimate RCEN and RLEN during an actual stress event and periodic testing to ensure the capabilities function as designed, the letters state. The Deutsche Bank letter is addressed to Chief Executive Officer Christian Sewing and Americas CEO Lisa McGeough; the Barclays letter to Craig Unterseher, accountable executive for U.S. resolution planning.

The Resolution Plan Rule requires each covered company to submit a targeted resolution plan on or before 1 luglio 2028, and no less than 12 months before that date the agencies may identify targeted information required to be included in the 2028 plans. The letters are signed by Michele Taylor Fennell, associate secretary of the Federal Reserve Board, and Hanoi Veras, executive secretary of the FDIC.