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Martin J. Gruenberg

Chairman, Federal Deposit Insurance Corporation

Determinations and Feedback on Resolution Plans of Eight Systemically Important,
Domestic Banking Institutions

April 13, 2016

The actions the FDIC and the Federal Reserve are announcing today are a significant step
forward in the use of the living will authority to require systemically important financial
institutions to demonstrate they can fail in an orderly way under bankruptcy at no cost to
taxpayers.

The Dodd-Frank Act gave the FDIC and the Federal Reserve Board important new authority to
review resolution plans, often called living wills, submitted by systemically important financial
institutions for their rapid and orderly resolution under the Bankruptcy Code. The statutory
standard under the Dodd-Frank Act for reviewing the plans is whether a plan is not credible or
would not facilitate an orderly resolution of the firm under bankruptcy.

Eight of the most systemically important U.S. financial institutions submitted their most recent
resolution plans in July of last year. The FDIC and Federal Reserve are announcing our findings
and required actions for remediation today.

For five firms Bank of America, Bank of New York Mellon, J.P. Morgan Chase, State Street,
and Wells Fargo -- the agencies have jointly determined that the plans are not credible or would
not facilitate an orderly resolution under bankruptcy. The agencies have jointly identified a
number of deficiencies in those plans, as required by the statute if a joint determination is made.

Those five firms are required to remedy those deficiencies by October 1st of this year. Failure to
remedy the deficiencies could subject the firms to more stringent capital, leverage, or liquidity
requirements, or restrictions on the growth, activities, or operations of the firms as provided in
the statute.

For two firms - Goldman Sachs and Morgan Stanley - the FDIC and Federal Reserve jointly
identified shortcomings in their 2015 plans that the firms must address, but did not make joint
determinations regarding the plans. The FDIC found that the plan submitted by Goldman Sachs
was not credible or would not facilitate an orderly resolution under bankruptcy. The Federal
Reserve found that the plan from Morgan Stanley was not credible or would not facilitate an
orderly resolution under bankruptcy.
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Finally, although both agencies identified shortcomings in the Citigroup resolution plan, they did
not believe the shortcomings rose to the level of the statutory standard required for a joint
determination of non-credibility.

The agencies have established a framework under which all of the shortcomings identified in the
plans, as well as the more comprehensive guidance for the plans, must be addressed by July 1,
2017. In addition, the deficiencies identified in the plans for which a joint determination of non-
credibility has been made must be addressed by October 1, 2016.

The FDIC and Federal Reserve are committed to carrying out the statutory mandate that
systemically important financial institutions demonstrate a clear path to an orderly failure under
bankruptcy at no cost to taxpayers.

Today’s action is a significant step toward achieving that goal.