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December 10, 2012

Title I Resolution Plans
Agenda

• Background

• Objectives

• Overview of Plans

• Next Steps

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Background

• The Dodd-Frank Act requires all domestic BHCs 

and foreign banking organizations (FBOs) with total 

consolidated assets of $50 billion or more and nonbank financial companies designated by FSOC 

(covered companies) to report periodically on their 

plans for rapid and orderly resolution under the U.S. 

Bankruptcy Code in the event of material financial 

distress or failure 

• Federal Reserve and FDIC issued implementing 

regulations in November 2011

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Background

• Regulations require covered companies to submit 

annually a plan (resolution plan or living will) for rapid and 

orderly resolution 

• Federal Reserve and FDIC may find a plan is not credible 

or would not facilitate an orderly resolution in bankruptcy

• If plan is so found, the covered company has 90 days to 

resubmit a plan; if deficiencies are not corrected, the firm 

may be subjected to more stringent capital, leverage, or 

liquidity requirements, or restrictions on growth, activities, 

or operations

• Plan may not rely on extraordinary government support

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Objectives of 2012 Resolution Plans

• Identify each firm’s critical operations and its strategy to 

maintain them in a crisis situation

• Map critical operations and core business lines to 

material legal entities

• Map cross-guarantees, service level agreements, 

shared employees, intellectual property, and vendor 

contracts across material legal entities

• Identify and improve understanding of the resolution 

regimes for material legal entities

• Identify key obstacles to rapid and orderly resolution

• Direct firms to remediate obstacles to resolution 

• Use plan information to aid in Title II resolution planning 

and to enhance ongoing firm supervision

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2012 Resolution Plans

• First Wave Filers: 

• Eleven firms submitted firm-developed resolution plans in 2012

• July 1, 2012: Bank of America, Citigroup, JP Morgan Chase, 

Goldman Sachs, Morgan Stanley, Deutsche Bank, UBS, 

Credit Suisse, and Barclays

• October 1, 2012: Bank of New York Mellon, State Street 

• Federal Reserve and FDIC have been reviewing and analyzing 

the plans since early July

• Second Wave Filers: 

• Four firms are expected to submit plans on July 1, 2013

• Third Wave Filers:

• Approximately 115 firms are expected to file on December 31, 

2013 (~75 firms may qualify for tailored plans)

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2012 Resolution Plans

• Plan review process:

• Each plan was reviewed for informational 

completeness to ensure that all regulatory 

requirements were addressed in the plans

• Federal Reserve and FDIC have been evaluating 

each plan’s content and analysis -- the Federal 

Reserve and FDIC may jointly determine that a plan 

is not credible

• Assumptions provided by supervisors:

• Idiosyncratic failure

• A firm’s failure does not significantly disrupt the 

market -- other participants could take on activities

• No access to unsecured funding

• No extraordinary government support

• All material entities fail

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2012 Resolution Plans

• Strategies presented by the firms included:

• Sale of whole company or specific legal entities

• Liquidation of assets or wind-down of positions 

and operations

• FDIC receivership and bridge bank for IDIs

• Orderly close-out of positions at broker-dealers; 

counterparties hold on to collateral

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2012 Resolution Plans

• Potential impediments to resolution

• Complexity and interconnectedness of firm 

internal organizational structure

• Interconnections to other G-SIFIs

• Management Information System limitations

(e.g., related to collateral management and 

derivatives booking practices at the legal entity 

level)

• QFC closeouts 

• Shared services and service level agreements 

among affiliates

• Uncertain international regimes and actions

• Liquidity needs/funding mechanisms

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Next Steps

• Federal Reserve and FDIC are looking to 

provide feedback to the firms about their 2012 

plans. 

• Provide additional guidance on assumptions and 

strategies

• Revised plans submitted July 1st, 2013 will be 

subject to informational completeness and 

credibility reviews

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