Bank Heist: ‘Living Wills’ Deadline Extended for Financial Giants

Bank Heist: ‘Living Wills’ Deadline Extended for Financial Giants

In a move that has left many in the financial world scratching their heads, the Federal Reserve Board and the Federal Deposit Insurance Corporation (FDIC) have decided to extend the resolution plan submission deadline for certain large financial institutions. The new deadline for these companies to submit their ‘living wills’, which outline plans for orderly resolution in the case of financial distress, has been set for March 31, 2025, instead of the original July 1, 2024.

The decision comes after the agencies invited public comment on proposed guidance for how these resolution plans could address key challenges in resolution. The public comment period closed on November 30, 2023, and the agencies continue to develop the final guidance.

The FDIC and Federal Reserve Board have come under fire in recent years for their handling of large financial institutions. Critics have argued that the agencies have been too lenient on these companies, allowing them to take on excessive risk and engage in reckless behavior.

The extension of the deadline has been met with mixed reactions from industry insiders. Some have welcomed the move, arguing that it will give companies more time to develop and refine their resolution plans. Others have expressed concern that the delay will only serve to further muddy the waters and make it more difficult for regulators to hold these companies accountable.

The FDIC has stated that the extension is necessary in order to provide ‘reasonable time’ for companies to reflect the proposed guidance in their plan submissions. The agencies have also emphasized that the extension is not a ‘bailout’ for these companies, but rather a necessary step in the regulatory process.

As the financial world continues to grapple with the fallout from the 2008 financial crisis, the FDIC and Federal Reserve Board’s decision to extend the resolution plan submission deadline has raised more questions than answers. Will this move ultimately help to prevent another financial meltdown, or will it only serve to further entrench the power of the financial elite? Only time will tell.