The living-wills setback for JPMorgan and others arrives as they announce first-quarter earnings. JPMorgan, the biggest U.S. bank by assets, was up first with its earnings call Wednesday morning.
The industry’s bad news comes just a day after banks learned they may get a break on future living-will efforts. The Fed and FDIC agreed to a few concessions after the Government Accountability Office found flaws in the process. In response to GAO criticism, the two agencies said they will figure out a way to give banks more time to write the massive plans and also will disclose more about how they decide whether a bank’s plan is credible.
Filing Deadline
Though the annual filing deadline for the 12 largest banks is July 1, the eight U.S. institutions the regulators responded to will be given until that date in 2017 for their next round, assuming the five that failed get their October plans approved. The agencies said they are still considering the living wills for four non-U.S. firms, including Barclays Plc, Credit Suisse Group AG, Deutsche Bank AG, and UBS Group AG.
“No firm yet shows itself capable of being resolved in an orderly fashion through bankruptcy,” FDIC Vice Chairman Thomas Hoenig, who has been critical of the process, said in a statement. “Thus, the goal to end too big to fail and protect the American taxpayer by ending bailouts remains just that: only a goal.”