The Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve Board (FRB) today, September 29, 2026, jointly released their feedback letters concerning the resolution plans submitted in October 2025 by 15 prominent banking organizations. Notably, the agencies did not identify any shortcomings or deficiencies in these latest submissions, marking a significant milestone in the ongoing efforts to bolster financial stability. Furthermore, the regulators confirmed that a shortcoming previously identified in the 2021 resolution plan of BNP Paribas has been satisfactorily addressed. The announcement was made for release at 4:00 p.m. EDT.

This outcome underscores the banking sector’s continued progress in developing credible strategies for orderly resolution, often referred to as "living wills." These intricate documents are central to the post-2008 financial crisis regulatory framework, designed to prevent future taxpayer-funded bailouts of systemically important financial institutions. The joint review by the FDIC and the FRB focused on institutions holding over $250 billion in assets, a threshold indicative of their systemic significance within the global financial landscape.

The Genesis of "Living Wills": A Post-Crisis Imperative

The requirement for resolution plans emerged directly from the ashes of the 2008 global financial crisis. The crisis exposed a critical vulnerability: the absence of viable mechanisms to resolve large, complex financial institutions without resorting to government intervention and immense taxpayer expense. The concept of "too big to fail" became a stark reality, forcing policymakers to confront the systemic risks posed by interconnected banks whose failures could trigger cascading effects throughout the economy.

In response, the U.S. Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010. Section 165(d) of this landmark legislation mandated that certain financial companies, including bank holding companies and nonbank financial companies designated as systemically important, periodically submit resolution plans to the FDIC and the Federal Reserve. These plans, colloquially known as "living wills," must detail how each firm could be resolved swiftly and orderly under bankruptcy or other applicable insolvency regimes in the event of severe financial distress or failure, without posing a systemic risk to the U.S. financial system. The primary goal is to ensure that even the largest and most complex institutions can fail without disrupting critical economic functions or necessitating public funds.

Anatomy of a Resolution Plan: A Blueprint for Orderly Failure

Resolution plans are comprehensive blueprints that outline a banking organization’s strategy for an orderly resolution. They are far more than mere contingency plans; they are detailed operational guides designed to facilitate the smooth unwinding of a firm’s global operations. Key components that banks must address include:

• Capital and Liquidity: Strategies for maintaining sufficient capital and liquidity to support critical operations during resolution and to facilitate the orderly wind-down of non-critical activities. This includes identifying sources of capital and liquidity, both within the firm and from external markets, that would be available to support the resolution process.
• Governance and Management Information Systems (MIS): A clear articulation of governance structures that would oversee the resolution, including roles and responsibilities. Robust MIS capabilities are essential for providing timely and accurate data to regulators and resolution authorities.
• Critical Operations and Core Business Lines: Identification and mapping of critical operations, services, and functions that must continue uninterrupted during resolution to preserve financial stability. This involves understanding interdependencies across legal entities and jurisdictions.
• Legal Entity Rationalization: A strategy to simplify the firm’s legal entity structure to make it more amenable to resolution, potentially involving the pre-positioning of assets and liabilities.
• Derivatives and Trading Activities: Plans for managing and unwinding complex derivatives portfolios and trading positions to minimize market disruption.
• Shared Services and Intercompany Arrangements: Detailed descriptions of how shared services (e.g., IT, human resources, risk management) would be maintained or transferred during resolution.
• Public Information and Communications: A framework for communicating with stakeholders, including employees, customers, investors, and the public, during a resolution scenario.

The depth and complexity required for these plans necessitate significant ongoing investment by financial institutions in personnel, technology, and organizational restructuring. The process is iterative, with firms continuously refining their plans based on evolving regulatory expectations and internal assessments.

A Decade of Evolution: The Resolution Plan Timeline

The journey of resolution planning has been one of continuous refinement and increasing rigor since its inception:

• 2010: Dodd-Frank Act is enacted, mandating resolution plans.
• 2012: Initial resolution plan submissions from the largest U.S. banks. These early plans often highlighted areas where banks lacked sufficient capabilities or data to credibly demonstrate resolvability.
• 2014-2016: Regulators began identifying "shortcomings" and "deficiencies" in plans, signaling areas where firms’ strategies were deemed unfeasible or lacking. These findings often led to heightened supervisory scrutiny and requirements for firms to improve their capabilities. For instance, several large banks received feedback that their plans were not credible, particularly concerning their ability to recapitalize or manage global operations during a crisis.
• 22016: The agencies issued joint guidance on resolution plan requirements, clarifying expectations for capital, liquidity, governance, and operational separability.
• 2019: The tailoring rule for resolution plan requirements was finalized, adjusting the frequency and content requirements based on a firm’s size, complexity, and systemic risk profile. Firms with assets between $250 billion and $700 billion (Category III) generally submit plans less frequently or with less detail than those over $700 billion or globally systemically important banks (G-SIBs, Category I and II).
• 22021: BNP Paribas’ resolution plan was identified with a shortcoming, indicating a specific area where its strategy for orderly resolution was deemed insufficient or unclear by the agencies. This event underscored the regulators’ commitment to holding all systemically important institutions, including foreign banking organizations operating in the U.S., to high standards.
• October 2025: The 15 banking organizations, all falling into the higher asset categories (likely Category I, II, and III firms), submitted their latest resolution plans, incorporating feedback from previous cycles and reflecting their enhanced resolvability capabilities.
• September 29, 2026: The FDIC and FRB published their feedback letters, declaring no shortcomings or deficiencies for the 2025 submissions and confirming the satisfactory remediation of BNP Paribas’ 2021 issue.

This timeline illustrates a decade-long collaborative effort between regulators and the industry to build a robust framework that aims to prevent future financial crises from escalating into broader economic calamities.

The Scope of Review and Expectations

The joint review process undertaken by the FDIC and the Federal Reserve is extensive and rigorous. It involves teams of experts from both agencies scrutinizing every aspect of the submitted plans against a set of demanding criteria. The agencies assess whether the plans are:

• Credible: Is the plan believable and realistic given the firm’s structure and the potential stress scenario?
• Feasible: Can the firm actually execute the plan within the timeframe required for an orderly resolution?
• Comprehensive: Does the plan address all required elements and adequately cover the firm’s global operations?
• Operationalizable: Are the operational steps clearly defined, and does the firm have the necessary systems and data to implement them?

The distinction between a "shortcoming" and a "deficiency" is important. A shortcoming indicates a weakness or gap in a firm’s resolution plan that, while significant, does not necessarily render the entire plan unfeasible. It requires prompt remediation. A deficiency, a more severe finding, implies that the firm’s plan is not credible or feasible and poses a risk to financial stability. A deficiency can trigger more severe consequences, including potential restrictions on a firm’s growth, activities, or even requiring divestitures. The absence of either finding in the latest review for all 15 institutions is therefore a strong positive signal.

The satisfactory remediation of BNP Paribas’ 2021 shortcoming highlights the iterative nature of this process. Such remediation typically involves the bank submitting a revised plan, demonstrating specific enhancements to its capital, liquidity, operational, or governance frameworks, and providing evidence of strengthened capabilities to address the identified issues. This often requires significant internal restructuring, system upgrades, and policy revisions.

Industry Response and Regulatory Perspective

While specific statements from the 15 banking organizations were not immediately available, the industry is expected to welcome the clean bill of health. Achieving "no shortcomings or deficiencies" represents a substantial investment and effort by these institutions. Industry analysts have consistently pointed to the considerable resources – human capital, technology, and financial – that banks dedicate to developing and refining their resolution plans. This positive feedback from regulators suggests that these investments are yielding the desired results in enhancing resolvability.

From the regulatory perspective, the outcome reinforces the effectiveness of the Dodd-Frank framework and the supervisory process. Officials from both the FDIC and the Federal Reserve have consistently emphasized the critical importance of robust resolution planning as a cornerstone of financial stability. While no direct quotes were provided in the release, previous statements from regulatory leaders indicate a belief that strong living wills significantly reduce the probability and impact of future financial crises.

"The continuous improvement in firms’ resolvability capabilities is a testament to the framework’s efficacy and the industry’s commitment," a spokesperson for the Federal Reserve might reiterate, echoing past sentiments. Similarly, an FDIC official could underscore that "these plans are vital tools in protecting the financial system and taxpayers from the risks posed by large, complex institutions." The sustained focus on these plans has driven banks to internalize the costs and complexities of their potential failure, leading to more resilient and simplified structures.

Implications for Financial Stability and Future Outlook

The publication of feedback letters without identified shortcomings or deficiencies for such a significant cohort of systemically important banking organizations carries several crucial implications:

• Enhanced Financial Stability: This outcome signals a stronger, more resilient financial system. If these 15 institutions, representing a substantial portion of the U.S. and global financial markets, have credible plans for orderly resolution, the risk of a disorderly failure triggering a broader crisis is significantly diminished.
• Regulatory Effectiveness: The consistent identification and subsequent remediation of issues, followed by a clean sweep in this cycle, suggests that the regulatory framework is working as intended. It demonstrates that the agencies have effectively pushed firms to improve their resolvability.
• Increased Market Confidence: While not a dramatic market mover, the news provides a subtle boost to market confidence. Investors and other stakeholders can draw reassurance from the regulators’ positive assessment of these banks’ preparedness for extreme stress scenarios.
• Continued Vigilance: Despite this positive report, resolution planning is an ongoing process. Regulatory expectations will continue to evolve, and firms will be required to update and refine their plans regularly. Future cycles will undoubtedly bring new challenges and areas of focus, particularly as financial markets and technologies continue to advance. The agencies will remain vigilant, ensuring that the financial system remains adaptable to emerging risks.
• Global Coordination: The U.S. resolution planning regime also influences and interacts with similar frameworks in other major jurisdictions. Strong U.S. plans contribute to global financial stability and facilitate cross-border cooperation in the event of a multinational firm’s failure.

In conclusion, the September 29, 2026, announcement marks a significant positive development in the post-crisis regulatory landscape. The absence of shortcomings or deficiencies in the resolution plans of 15 systemically important banking organizations, coupled with the successful remediation of a previous issue by BNP Paribas, reflects a maturing and more robust financial system. It reinforces the notion that the lessons from the 2008 financial crisis have been heeded, and a critical layer of protection against future systemic shocks is firmly in place. However, the dynamic nature of finance ensures that the commitment to enhancing resolvability will remain a permanent fixture on the regulatory and industry agenda.