U.S. Regulators Extend ‘Living Will’ Deadline for Certain Large Banks, Reports Reuters

WASHINGTON (Reuters) – U.S. banking regulators announced on Tuesday that thirty-eight large financial institutions have been granted an additional year to prepare plans for an orderly unwinding of their businesses in the event of bankruptcy.

The new deadline for these institutions to submit their resolution plans, commonly referred to as “living wills,” is now set for the end of next year, as stated by the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve. The initial deadline was slated for this December.

The Dodd-Frank financial reform legislation mandates that financial firms with assets totaling $50 billion or more submit a living will. This requirement aims to safeguard U.S. taxpayers from the need to bail out failing banks. Additionally, other sizable financial entities are also required to formulate contingent plans for emergencies.

Notable banks that received extensions include Capital One Financial Corp, PNC Financial Services Group Inc, Regions Financial Corp, and American Express Co.

According to a joint statement from the FDIC and the Fed, “Each plan must describe the company’s strategy for rapid and orderly resolution in the event of material financial distress or failure of the company.”