Regulators reject plans of 5 big U.S. banks for preventing another taxpayer bailout - The Washington Post

Regulators reject plans of 5 big U.S. banks for preventing another taxpayer bailout - The Washington Post: "Federal regulators said Wednesday that five of the country’s largest banks, including JPMorgan Chase and Bank of America, still don’t have credible plans for winding down their operations without taxpayer help if they start to fail.

These so-called “living wills” are a critical requirement of the 2010 financial reform package, Dodd-Frank, aimed at a preventing a repeat of the taxpayer bailouts that took place during the financial crisis. The regulators found various problems with the plans submitted by Bank of America, Bank of New York Mellon, J.P. Morgan Chase, State Street, and Wells Fargo.

The failures are likely to tap into populist concerns that U.S. banks are still “too big to fail.”  It comes as the banking sector is likely to report weaker financial results for the first quarter of the year.

The five banks have until October to address the problems found by the Federal Reserve and the Federal Deposit Insurance Corporation. If the deficiencies aren’t addressed, the banks could face higher capital requirements or other regulatory sanctions if their plans are still not deemed sufficient."



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