REPORT: Federal regulators will reject the 'living wills' of at least 4 Wall Street banks
According to a report by The Wall Street Journal, regulators are planning to reject the "living wills" submitted by four of the eight "systemically important" banks.These wills are documents outlining how the bank would handle a possible bankruptcy in a way that would not be burdensome on the public or lead to another bailout.Advertisement
According to the Journal, which cites people familiar with the matter, JPMorgan Chase and at least three other banks will have their "living will" plans rejected by the FDIC and Federal Reserve. Additionally, the findings and rejection of the plans should be released to the public soon.
If the banks do not submit acceptable plans, they are subject to sanctions including higher capital requirements.This has been an ongoing process for years since the wills were mandated as part of the Dodd-Frank reform Act. The banks - including Goldman Sachs, Wells Fargo, Citigroup, Morgan Stanley, and Bank of America - submitted drafts last year. This is another round of the ongoing process.
JPMorgan, the only bank named explicitly in the Journal report, released its annual letter from CEO Jamie Dimon last week in which he emphasized the company's a strong balance sheet and the resiliency of its assets.The move also comes less than 24 hours before JPMorgan is set to report earnings for the first quarter.JP Morgan did not immediately respond to a request for comment. Advertisement
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