FDIC’s Gruenberg Sees Much Work Ahead on Living Wills Process

By Jeff Bater

Megabanks have more work to do before they’re ready to unwind themselves in the event of their failure, the outgoing chairman of the Federal Deposit Insurance Corporation said Feb. 16.

Martin Gruenberg, in remarks Feb. 16 for an appearance at The Wharton School in Philadelphia, addressed the efforts by the eight largest, most complex banks in assembling their living wills, which are reviewed by the FDIC and the Federal Reserve.

While the banks’ progress has been “substantial” and “not well appreciated,” Gruenberg said “"there is still a great deal of work to do.”

The FDIC and the Fed announced in December there were no deficiencies in the resolution plans of Bank of America, Goldman Sachs, Morgan Stanley, Wells Fargo, Bank of New York Mellon, Citigroup, JPMorgan Chase, and State Street — the so-called GSIBs, or global systemically important banks.

Living wills were created by Dodd-Frank as a way to deal with the winding-down of troubled big banks. A Trump administration report last June recommended Dodd-Frank be amended to remove the FDIC from the living wills process.

Gruenberg’s term as chair expired in November, and President Donald Trump’s pick to replace him, Jelena McWilliams, is awaiting a Senate floor vote.

To contact the reporter on this story: Jeff Bater in Washington at jbater@bloomberglaw.com

To contact the editor responsible for this story: Michael Ferullo at mferullo@bloomberglaw.com

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