Living will extension prompts market relief

Author: John Crabb | Published: 11 Sep 2017

The market has welcomed a decision by the Federal Reserve Board and the Federal Deposit Insurance Corporation (FDIC) to extend the deadline for 21 banking organisations to submit resolution plans until the end of 2018.
The extension, published last month, has not come as much of a surprise to the market, which feels that it was a necessary allowance to ensure that the institutions had the time to adapt to previously offered guidance on how to prepare resolution plans, also known as living wills.

Not only was the measure expected, it was hoped for by the institutions. Following the initial guidance by the institutions back in March, the four largest foreign banking organisations (FBOs) in the US - Barclays, Credit Suisse, Deutsche Bank and UBS – were offered extensions until July 1 2018 to be able to meet liquidity requirements and 'to reflect the significant restructuring that they have undertaken...