Regulators Allow Large Foreign Banks More Time on Next 'Living Wills'
June 08 2016 - 09:36AM
Dow Jones News
By Ryan Tracy
U.S. regulators said they will give four large foreign-owned
banks an additional year to file revised "living wills" showing how
their U.S. units could go through bankruptcy without a taxpayer
bailout.
Barclays PLC, Credit Suisse Group AG, UBS Group AG, and Deutsche
Bank AG will have until July 2017 to file their next bankruptcy
plans, the Federal Reserve and Federal Deposit Insurance Corp.
said. The previous deadline was July 1 of this year.
The agencies said the change came in light of a requirement that
foreign- owned banks create single holding companies for all their
U.S. operations by next month. The new holding company structures
"are likely to affect the firms' resolution plans and strategies,"
the regulators said in a press release. "Resolution" is regulatory
jargon for the process of handling a failing bank.
The four firms have been waiting since last year for feedback on
living wills they submitted in 2015. The agencies said they still
intended to provide that feedback, though they didn't specify
whether the comments would be public.
The four firms have been anxiously awaiting that feedback
because in 2014, they were told their living wills had deficiencies
that raise questions about whether they could fail without a
bailout.
If the firms can't address regulators' concerns, they could face
sanctions, such as higher capital requirements or forced
divestitures.
Write to Ryan Tracy at ryan.tracy@wsj.com
(END) Dow Jones Newswires
June 08, 2016 09:21 ET (13:21 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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