Fed and FDIC Give Clean Bill of Health to 15 Big Banks' Resolution Plans

In a joint announcement, the Federal Reserve Board and the Federal Deposit Insurance Corporation (FDIC) released feedback letters for the resolution plans—commonly known as "living wills"—submitted in October 2025 by 15 large banking organizations. Notably, the agencies did not identify any shortcomings or deficiencies in these submissions, marking a relatively clean review cycle for the largest U.S. and foreign banks operating in the United States.

Key Facts

• The FDIC and the Fed jointly reviewed the 2025 resolution plans from 15 banking organizations with more than $250 billion in assets.
• No shortcomings or deficiencies were found in any of the 2025 submissions.
• The agencies also determined that the shortcoming previously identified in BNP Paribas's 2021 resolution plan has been satisfactorily addressed.
• The feedback letters were published for each of the 15 firms, including American Express, Barclays, BNP Paribas, Deutsche Bank, and UBS Group.
• Resolution plans describe a banking organization's strategy for orderly resolution in the event of material financial distress or failure.

Analysis

The absence of any identified shortcomings or deficiencies is significant for both the banks and the broader financial system. Resolution planning is a cornerstone of post-2008 crisis reforms, designed to ensure that large, complex institutions can be wound down without taxpayer bailouts or systemic contagion. When agencies find deficiencies, firms may be required to resubmit plans, face restrictions on growth or capital distributions, or even be forced to simplify their structures. A clean review cycle therefore reduces regulatory risk for the 15 firms involved.

This outcome likely reflects several years of intense focus by banks on enhancing their resolvability. Since the 2021 cycle, many institutions have improved their playbooks, legal entity structures, and access to liquidity and capital during stress. The fact that BNP Paribas resolved its earlier shortcoming underscores that the process works: problems identified in one cycle can be fixed by the next. It also signals that the agencies are satisfied with the current state of resolution planning at these large firms, at least for now.

However, the clean bill of health does not mean the work is over. Resolution planning is an ongoing exercise, and the agencies will continue to scrutinize firms' preparations. The feedback letters may contain recommendations or areas for improvement even without formal deficiencies. Moreover, the regulatory environment is constantly evolving, with potential changes to capital and liquidity rules that could affect resolvability. Banks must remain vigilant.

Implications

For markets and investors, the news is broadly positive. It reduces the tail risk of regulatory actions that could disrupt business models or capital return plans. Large banks have been eager to return capital to shareholders through dividends and buybacks, and a smooth resolution planning cycle removes a potential obstacle. It also reinforces confidence in the stability of the financial system, as it shows that the largest institutions are better prepared for distress.

From a policy perspective, the outcome validates the post-crisis framework. It suggests that the enhanced prudential standards, including resolution planning requirements, have incentivized firms to become more resolvable. This could influence future regulatory debates, particularly around tailoring rules for different size buckets. If large firms continue to perform well, there may be less appetite for additional burdensome requirements.

Globally, the joint review by the FDIC and Fed demonstrates continued U.S. commitment to cross-border resolution coordination. Many of the 15 firms are foreign-based, and their ability to resolve in an orderly manner is critical for international financial stability. The satisfactory resolution of BNP Paribas's prior shortcoming is a case in point.

FAQ

What is a resolution plan?

A resolution plan, or living will, is a detailed strategy that a large banking organization must submit to regulators, explaining how it would be resolved in an orderly way if it faced material financial distress or failure, without relying on taxpayer funds.

Which banks were reviewed?

The agencies reviewed plans from 15 banking organizations with over $250 billion in assets, including American Express, Barclays, BNP Paribas, Deutsche Bank, and UBS Group. The full list is available in the published feedback letters.

What happens if a plan has deficiencies?

If regulators identify shortcomings or deficiencies, the bank may be required to resubmit its plan, and could face restrictions on growth, acquisitions, or capital distributions until the issues are addressed. In this cycle, no such deficiencies were found.