By Ryan Tracy
U.S. regulators said three foreign-owned banks haven't shown
they can collapse without causing broader economic damage.
The Federal Reserve and the Federal Deposit Insurance Corp.
found shortcomings in the "living wills," or bankruptcy plans, of
the U.S. units of BNP Paribas SA, HSBC Holdings PLC, and Royal Bank
of Scotland Group PLC. The banks could face sanctions if they don't
fix the issues by the end of 2015, when new drafts of the plans are
due, the regulators said.
The FDIC found the plans were "not credible," but the Fed
stopped short of that finding, regulators said in a news release.
If both agencies agree a bank's plan is "not credible," the law
requires them to move toward imposing sanctions on the firm, such
as forced divestitures.
The Fed and the FDIC made similar findings about big U.S. banks'
living wills last summer.
The plans are a requirement of the 2010 Dodd-Frank law. They
spell out how a firm would wind down its operations under the
bankruptcy code if it got into trouble. The plans must show the
bank is able to be unwound without broad negative
repercussions.
Write to Ryan Tracy at ryan.tracy@wsj.com
Access Investor Kit for BNP Paribas SA
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=FR0000131104
Access Investor Kit for HSBC Holdings Plc
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=GB0005405286
Access Investor Kit for Royal Bank of Scotland Group Plc
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=GB00B7T77214
Access Investor Kit for BNP Paribas SA
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US05565A2024
Access Investor Kit for HSBC Holdings Plc
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US4042804066
Access Investor Kit for Royal Bank of Scotland Group Plc
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US7800976893
Subscribe to WSJ: http://online.wsj.com?mod=djnwires