Fed to seek input on living-will guidance for US and foreign banks, Quarles says

21 May 2018 9:10am
Washington regulators plan to seek public input soon on whether to change living-will guidance for large US banks and foreign banks with American operations, US Federal Reserve Governor Randal Quarles said.

The comment requests, to deal with institutions’ resolution strategies under bankruptcy, are part of a broader effort to improve lagging US and overseas cooperation in case an international bank collapses.

The Fed and the US Federal Deposit Insurance Corp. want to “reduce the incentives for damaging and unpredictable seizures of resources by local regulators during times of stress,” Quarles, the Fed’s regulatory point man as vice chairman of supervision, said in a speech Wednesday.

US regulators use living wills to make sure that a bank balances resources managed out of headquarters with capital and liquidity prepositioned for local claimants in the event of crisis.