FDIC Acts on Living Wills Rulemaking, Adopting Staggered Deadlines for Submission of Resolution Plans Starting in 2012
September 19, 2011
Marking the first major milestone in the regulators’ implementation of Dodd-Frank’s multi-pronged approach to systemic risk supervision, the FDIC approved two rules last week related to resolution planning—the preparation of so-called “living wills”. The rules will require systemically important financial institutions (SIFIs) and certain large insured depository institutions (IDIs) to submit and periodically update detailed strategic analyses of how they could be resolved under specified insolvency regimes in a way that does not pose systemic risks to the U.S. financial system, in the case of SIFIs, and that protects depositors, creditors and the Deposit Insurance Fund, in the case of IDIs.
The attached memorandum includes an executive summary of the two rules as well as a more detailed discussion of their provisions, highlighting noteworthy differences and similarities between the SIFI and IDI rules and changes from earlier proposed versions. We also provide our observations and conclusions regarding some key implications of the new U.S. resolution planning regime.