Waivers

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FEDERAL RESERVE SYSTEM
[Docket No. OP–1816]

FEDERAL DEPOSIT INSURANCE
CORPORATION
RIN 3064–ZA37

Guidance for Resolution Plan
Submissions of Domestic Triennial
Full Filers
Board of Governors of the
Federal Reserve System (Board) and
Federal Deposit Insurance Corporation
(FDIC).
ACTION: Final guidance.
AGENCY:

The Board and the FDIC
(together, the agencies) are adopting this
final guidance for the 2025 and
subsequent resolution plan submissions
by certain domestic banking
organizations. The final guidance is
meant to assist these firms in
developing their resolution plans,
which are required to be submitted
under the Dodd-Frank Wall Street
Reform and Consumer Protection Act, as
amended (the Dodd-Frank Act), and the
jointly issued implementing regulation
(the Rule). The scope of application of
the final guidance is domestic triennial
full filers (specified firms or firms),
which are domestic Category II and III
banking organizations. The final
guidance describes the agencies’
expectations, depending on the
resolution strategy chosen by the firm,
regarding a number of key
vulnerabilities in plans for an orderly
resolution under the U.S. Bankruptcy
Code (i.e., capital; liquidity; governance
mechanisms; operational; legal entity
rationalization; and insured depository
institution (IDI) resolution, if
applicable). The final guidance modifies
and clarifies certain aspects of the
proposed guidance based on the
agencies’ consideration of comments to
the proposal, additional analysis, and
further assessment of the business and
risk profiles of the firms.
DATES: The final guidance is available
on August 15, 2024.
FOR FURTHER INFORMATION CONTACT:
Board: Catherine Tilford, Deputy
Associate Director, (202) 452–5240,
Elizabeth MacDonald, Assistant
Director, (202) 475–6316, Tudor Rus,
Manager, (202) 475–6359, Mason Laird,
Senior Financial Institution Policy
Analyst II, (202) 912–7907, Caroline
Elkin, Senior Financial Institution
Policy Analyst, (202) 263–4888,
Division of Supervision and Regulation;
or Jay Schwarz, Deputy Associate

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SUMMARY:

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General Counsel, (202) 452–2970;
Andrew Hartlage, Special Counsel, (202)
452–6483; Brian Kesten, Counsel, (202)
843–4079; or Sarah Podrygula, Senior
Attorney, (202) 912–4658, Legal
Division, Board of Governors of the
Federal Reserve System, 20th Street and
Constitution Avenue NW, Washington,
DC 20551. For users of TTY–TRS, please
call 711 from any telephone, anywhere
in the United States.
FDIC: Robert C. Connors, Senior
Advisor, (202) 898–3834; Mark E. Haley,
Chief, (917) 320–2911, Patrick R.
Bittner, Senior Policy Specialist, (202)
898–6571, Division of Complex
Financial Institution Supervision and
Resolution; Celia Van Gorder, Assistant
General Counsel (Acting), (202) 898–
6749; Dena S. Kessler, Counsel, (202)
898–3833; Gregory J. Wach, Counsel,
(202) 898–6972, Legal Division.
SUPPLEMENTARY INFORMATION:
Table of Contents
I. Introduction
A. Background
B. Connection to Other Rulemakings
C. Proposed Guidance
II. Overview of Comments
III. Final Guidance
A. Scope of Application
B. Transition Period
C. Capital
D. Liquidity
E. Governance Mechanisms
F. Operational
G. Legal Entity Rationalization and
Separability
H. Insured Depository Institution
Resolution
I. Derivatives and Trading Activities
J. Format and Structure of Plans;
Assumptions
K. Additional Comments
IV. Paperwork Reduction Act
V. Text of the Final Guidance

I. Introduction
A. Background
Section 165(d) of the Dodd-Frank
Act 1 and the Rule 2 require certain
financial institutions to report
periodically to the Board and the FDIC
their plans for rapid and orderly
resolution under the U.S. Bankruptcy
Code (the Bankruptcy Code) in the event
of material financial distress or failure.
The Rule divides covered companies
into three groups of filers: (a) biennial
filers, (b) triennial full filers, and (c)
triennial reduced filers.3 The terms
‘‘covered company’’ and ‘‘triennial full
filer’’ have the meanings given in the
Rule, as do other, similar terms used
1 12

U.S.C. 5365(d).
CFR parts 243 and 381.
3 12 CFR 243.4 and 381.4.
2 12

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throughout this final guidance
document.
Triennial full filers under the Rule are
required to file a resolution plan every
three years, alternating between full and
targeted resolution plans.4 The Rule
requires each covered company’s full
resolution plan to include, among other
things, a strategic analysis of the plan’s
components, a description of the range
of specific actions the covered company
proposes to take in resolution, and a
description of the covered company’s
organizational structure, material
entities, and interconnections and
interdependencies.5 Targeted resolution
plans are required to include a subset of
information contained in a full plan.6 In
addition, the Rule requires that all
resolution plans consist of two parts: a
confidential section that contains any
confidential supervisory and proprietary
information submitted to the agencies,
and a section that the agencies make
available to the public.7 Public sections
of resolution plans can be found on the
agencies’ websites.8
Recent Developments
Implementation of the Rule has been
an iterative process aimed at
strengthening the resolution planning
capabilities of financial institutions
subject to the Rule. To assist the
development of covered companies’
resolution planning capabilities and
plan submissions, the agencies have
provided feedback on individual plan
submissions, issued guidance to certain
groups of covered companies, and
issued answers to frequently asked
questions. The agencies believe that
guidance can help focus the efforts of
similarly situated covered companies to
improve their resolution capabilities
and clarify the agencies’ expectations
for those filers’ future progress in their
resolution plans. To date, the agencies
have issued guidance to (a) U.S. global
systemically important banks (GSIBs),9

4 12

CFR 243.4(b) and 381.4(b).
CFR 243.5 and 381.5.
6 12 CFR 243.6(b) and 381.6(b).
7 12 CFR 243.11(c) and 381.11(c).
8 The public sections of resolution plans
submitted to the agencies are available at
www.federalreserve.gov/supervisionreg/resolutionplans.htm and www.fdic.gov/regulations/reform/
resplans/.
9 Guidance for section 165(d) Resolution Plan
Submissions by Domestic Covered Companies
applicable to the Eight Largest, Complex U.S.
Banking Organizations, 84 FR 1438 (Feb. 4, 2019)
(2019 U.S. GSIB Guidance).
5 12

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which constitute the biennial filer
group; and (b) certain large foreign
banking organizations (FBOs) that are
triennial full filers.10 The agencies have
not, however, thus far issued guidance
to domestic triennial full filers and the
additional FBOs that make up the
remainder of the triennial full filers.
Several developments inform the final
guidance:
• The agencies’ consideration of
comments to the proposed guidance (as
defined below);
• The agencies’ review of domestic
triennial full filers’ 2021 resolution
plans and the issuance of individual
letters communicating the agencies’
feedback on those submitted plans;
• The agencies’ recent experience
with the resolutions of Silicon Valley
Bank, Signature Bank, and First
Republic Bank, and related stress
experienced by a range of other
financial institutions; and
• The agencies’ analysis of the
current risk profiles of the domestic
triennial full filers.
The preamble to the 2019 revisions to
the Rule indicated that the agencies
would make any future resolution
guidance available for comment,11 and
on August 29, 2023, the agencies invited
comments on proposed guidance for the
2024 and subsequent resolution plan
submissions by domestic triennial full
fillers (proposed guidance or
proposal).12
The Rule requires triennial full filers
to submit their resolution plans on or
before July 1 of each year in which a
resolution plan is due.13 At the time the
agencies issued the proposed guidance,
triennial full filers were required to
submit their next resolution plans on or
before July 1, 2024. In the proposal, the
agencies requested comment about
whether the agencies should provide
more than six months for firms to take
into consideration the expectations in
the finalized guidance. Several
comments discussed the timing of the
next resolution plan submission and its
relationship to the final guidance as
well as other regulatory requirements.
Most requested extensions, with several
requesting at least a year and one stating
six months would be adequate. Two
10 Guidance for Resolution Plan Submissions of
Certain Foreign-Based Covered Companies, 85 FR
83557 (Dec. 22, 2020) (2020 FBO Guidance).
11 Resolution Plans Required, 84 FR 59194, 59204
(Nov. 1, 2019) (2019 Federal Register Rule
Publication).
12 https://www.federalreserve.gov/newsevents/
pressreleases/bcreg20230829b.htm; https://
www.fdic.gov/news/press-releases/2023/
pr23067.html. See also Guidance for Resolution
Plan Submissions of Domestic Triennial Full Filers,
88 FR 64626 (Sept. 19, 2023).
13 12 CFR 243.4(b)(3) and 381.4(b)(3).

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commenters stated a maximum of six
months from publication of the final
guidance to the first submission would
be adequate.
On January 17, 2024, the agencies
announced an extension of the
resolution plan submission deadline for
the triennial full filers from July 1, 2024,
to March 31, 2025.14 At this time, the
agencies are further extending the 2025
resolution plan submission deadline for
all triennial full filers to October 1,
2025, to provide the firms with
sufficient time to develop their full
resolution plans in light of the final
guidance. The agencies are also
clarifying that all triennial full filers’
subsequent resolution plan submission,
a targeted resolution plan, is due on or
before July 1, 2028, and that future
resolution plan submissions will be due
every three years after that, alternating
between full and targeted resolution
plans, pursuant to the Rule,15 unless the
agencies exercise their authority under
the Rule to alter the submission date for
future resolution plan submissions.16
Resolution Plan Strategy
U.S.-based covered companies subject
to the Rule have adopted one of two
resolution strategies: (1) a single point of
entry (SPOE) strategy where only the
top tier bank holding company enters
resolution through a bankruptcy
proceeding; or (2) a multiple point of
entry (MPOE) strategy where the top tier
bank holding company files for
bankruptcy, the FDIC-insured bank
subsidiary enters resolution pursuant to
the Federal Deposit Insurance Act of
1950, as amended (the FDI Act), and
where other entities enter the
appropriate resolution regimes. The
SPOE and MPOE resolution strategies
that firms have chosen present different
risks and entail different types of
planning and development of
capabilities; accordingly, the proposal
contained content applicable to SPOE
resolution strategies and separate
content applicable to MPOE resolution
strategies.
Commenters supported inclusion of
expectations for both MPOE and SPOE
resolution strategies, and supported
firms’ ability to choose either strategy.
However, some commenters questioned
whether the agencies were expecting or
encouraging firms to adopt an SPOE
resolution strategy and recommended
that the agencies disclose publicly
whether they prefer a particular
14 https://www.federalreserve.gov/newsevents/
pressreleases/bcreg20240117a.htm; https://
www.fdic.gov/news/press-releases/2024/
pr24002.html.
15 12 CFR 243.4(b) and 381.4(b).
16 12 CFR 243.4(d)(2) and 381.4(d)(2).

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resolution strategy, and engage in notice
and comment rulemaking if they do. For
firms that change resolution strategies,
some commenters requested that the
agencies provide a transition period and
made statements about the preferred
length of such a transition period, and
one requested that the agencies not
issue any findings regarding a firm’s
first resolution plan that adopts a
different resolution strategy.
The agencies do not prescribe a
specific resolution strategy for any firm.
This guidance, similarly, does not
suggest that any firm should change its
resolution strategy, nor are the agencies
identifying a preferred strategy for a
specific firm or set of firms. The
selection of a preferred strategy,
including MPOE or SPOE as a preferred
resolution strategy, should reflect the
characteristics of the firm and its
business operations and support the
goal of the resolution plan to
substantially mitigate serious adverse
effects of the firm’s failure on financial
stability in the United States. Each firm
remains free to choose the resolution
strategy it believes would most
effectively facilitate a rapid and orderly
resolution.
The agencies are providing separate
guidance for an SPOE resolution
strategy and an MPOE resolution
strategy in acknowledgment that firms
are free to adopt the resolution strategy
that best suits their operations and
organizations. Further, the agencies note
there may be resolution strategies other
than SPOE and MPOE that could
facilitate a rapid and orderly resolution.
The specified firms should continue to
submit resolution plans using the
resolution strategies they believe would
be most effective in achieving an orderly
resolution of their firms. Regardless of
strategy, a resolution plan should
address the key vulnerabilities, support
the underlying assumptions required to
successfully execute the chosen
resolution strategy, and demonstrate the
adequacy of the capabilities necessary to
execute the selected strategy.
Moreover, because the agencies do not
prescribe resolution strategies, firms
may voluntarily change their preferred
strategy in the future. However,
reflecting the voluntary nature of
resolution strategy changes, the agencies
do not anticipate providing a transition
period during which a firm would be
free from potential findings under the
Rule while it effectuates a change in
resolution strategy, whether from MPOE
to SPOE, or to any other resolution
strategy. A firm controls the timing of
when it submits its first plan with a
different strategy; accordingly, it can
take the time it needs to put in place the

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resources and capabilities needed to
submit a plan that satisfies the standard
in section 165(d) of the Dodd-Frank Act
and the Rule. The standard of review for
a resolution plan submission of a firm
that transitions to a new strategy is
therefore the same as for any firm
subject to the Rule.17
B. Connection to Other Rulemakings

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Long-Term Debt Proposal
The agencies, as well as the Office of
the Comptroller of the Currency
(together with the agencies, the Federal
banking agencies), issued in August
2023 a proposed rule for comment that
would require certain large holding
companies, U.S. intermediate holding
companies of FBOs, and certain IDIs, to
issue and maintain outstanding a
minimum amount of long-term debt
(LTD), among other proposed
requirements.18 The agencies have
received comments on the LTD
proposal, and will consider all
comments received in context of the
LTD rulemaking. The agencies
requested comments on the proposed
guidance that take the LTD proposal
into consideration.
One commenter recommended that,
for purposes of their resolution plans,
firms should only assume their existing
outstanding LTD and not the projected
LTD that would be in place once the
firm has achieved full compliance with
the LTD proposal. Another commenter
argued that the agencies should
consider the interaction between the
proposed guidance and LTD proposal,
with a goal of having them work
together to improve the resolvability of
applicable banking organizations and
avoid duplicative or contradictory
requirements. The commenter also
asserted that calibration of an IDI’s
internal LTD requirement could lead
banking organizations using an MPOE
resolution strategy to adopt an SPOE
resolution strategy because of the costs
of compliance with such internal LTD
issuance. One commenter discussed
whether the agencies should align the
objectives of the LTD proposal and the
resolution planning under the Rule.
The Federal banking agencies have
not finalized the LTD rulemaking as of
the issuance of this final guidance. The
agencies recognize that LTD issued and
17 See

12 CFR 243.8 and 381.8.

18 https://www.federalreserve.gov/newsevents/

pressreleases/bcreg20230829a.htm; https://
www.fdic.gov/news/press-releases/2023/
pr23065.html. See also Long-Term Debt
Requirements for Large Bank Holding Companies,
Certain Intermediate Holding Companies of Foreign
Banking Organizations, and Large Insured
Depository Institutions, 88 FR 64524 (Sept. 19,
2023) (LTD proposal).

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maintained by a specified firm could
affect the firm’s strategic analysis of the
funding, liquidity, and capital needs of,
and resources available to, the covered
company and its material entities.19
However, the agencies believe that the
finalization of a requirement to maintain
a specified amount of LTD would not
affect this guidance in any material way.
Any final LTD rule will address the
manner in which its requirements will
be implemented. This final guidance is
intended to convey the agencies’
expectations regarding the content of
resolution plan submissions, and not to
contradict, modify, or accelerate a
company’s obligations under other laws
or regulations. As provided in the final
guidance, firms should develop their
resolution plans in accordance with the
current state of the applicable legal and
policy frameworks. The agencies also
recognize, however, that there may be
phase-in periods during which rules
become effective. Should the LTD rule
be finalized in advance of October 1,
2025, the agencies will not expect firms
to incorporate the requirements of the
rule into their 2025 resolution plan
submissions. This should provide firms
covered by the LTD rule with reasonable
time to consider any final LTD rule in
a future resolution plan submission.
Further, and as noted above, the
agencies are not recommending that any
specified firm adopt any particular
strategy in response to this guidance or
the LTD proposal.
FDIC IDI Resolution Plan Proposal
The agencies received three
comments on the connection between
the proposal and the IDI Rule.20 The
FDIC published proposed revisions to
the IDI Rule on September 19, 2023,21
and published final revisions on July 9,
2024.22 Those commenters
recommended coordinating aspects of
the proposed guidance and the
Proposed IDI Rule, including having
consistent terms and concepts. One
commenter requested that crossreferencing to section 165(d) resolution
plans be permitted under the Proposed
IDI Rule. Another comment questioned
whether a more holistic approach would
19 See

12 CFR 243.5(c)(1)(iii) and 381.5(c)(1)(iii).
CFR 360.10 (IDI Rule).
21 Resolution Plans Required for Insured
Depository Institutions With $100 Billion or More
in Total Assets; Informational Filings Required for
Insured Depository Institutions With at Least $50
Billion But Less Than $100 Billion in Total Assets,
88 FR 64579 (Sept. 19, 2023) (Proposed IDI Rule).
22 Resolutions Plans Required for Insured
Depository Institutions with $100 Billion or More
in Total Assets; Informational Filings Required for
Insured Depository Institutions With at Least $50
Billion but Less Than $100 Billion in Total Assets,
89 FR 56620 (July 9, 2024).
20 12

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be possible to synchronize the
requirements of section 165(d) planning
and IDI Rule resolution planning. One
commenter asserted that the MPOE
guidance could cause confusion on the
part of firms by conflating resolution
strategies and the underlying purpose of
the Rule and the IDI Rule.
The Rule requires a covered company
to submit a resolution plan that would
allow for the rapid and orderly
resolution of the firm under the
Bankruptcy Code in the event of
material financial distress or failure.
The final guidance clarifies the
agencies’ expectations regarding certain
topics and provides direction as to how
a covered company may demonstrate its
compliance with its statutory obligation
under section 165(d) of the Dodd-Frank
Act to develop a resolution plan
allowing for its rapid and orderly
resolution. The IDI Rule serves a
different purpose: the IDI Rule assists
the FDIC in preparing to manage the
resolution of a covered insured
depository institution. While these two
rules may be complementary, they are
not the same. Additionally, whether to
align the IDI Rule with the Rule or
permit cross-referencing to section
165(d) resolution plans under the IDI
Rule is outside the scope of this
guidance.
C. Proposed Guidance
On August 29, 2023, the agencies
invited public comment on proposed
guidance for how domestic triennial full
filers’ resolution plans could address
key challenges in resolution, which was
proposed to apply beginning with the
specified firms’ 2024 resolution plan
submissions.23 The proposal identified
the banking organizations to which the
guidance would apply and articulated
several areas of guidance: capital;
liquidity; governance mechanisms;
operational; legal entity rationalization
and separability; and IDI resolution, if
applicable. The proposed guidance
described the agencies’ proposed
expectations for each of these areas.
Most substantive topics were bifurcated,
with separate guidance for an SPOE
resolution strategy and an MPOE
resolution strategy. The proposed
guidance concluded with information
about the format and structure of a plan
that applied equally to plans
contemplating either an SPOE
resolution strategy or an MPOE
resolution strategy.
The proposed guidance for firms that
adopt an SPOE resolution strategy was
generally based on the 2019 U.S. GSIB
Guidance, with certain modifications
23 Supra

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that reflected the specific characteristics
of and potential risks posed by the
failure of the specified firms. The
proposed guidance for firms that adopt
an MPOE resolution strategy
incorporated certain aspects of the 2019
U.S. GSIB Guidance that the agencies
believed are applicable to large banking
organizations, with modifications
appropriate to this strategy and
institutions with the characteristics
displayed by the specified firms. For
MPOE firms, the proposed guidance
also omitted aspects of the 2019 U.S.
GSIB Guidance that would not be
pertinent to MPOE resolution strategies.
The agencies also proposed to clarify
their expectations for specified firms
that adopt an MPOE resolution strategy
that includes the resolution of a material
entity that is a U.S. IDI.
The agencies invited comments on all
aspects of the proposed guidance. The
agencies also specifically requested
comments on a number of issues,
including the interaction of resolution
guidance with a final long-term debt
rule, the amount of time between the
publication of the final guidance and
the firms’ next resolution plans, the
appropriateness of guidance on IDI
resolution, and whether to issue
derivatives and trading expectations.

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II. Overview of Comments
The agencies received and reviewed
eight comment letters on the proposed
guidance. Commenters included various
financial services trade associations, a
law firm, two public interest groups,
and certain individuals. In addition, the
agencies met with representatives of a
banking organization that would be a
specified firm and a trade association
that represents banking organizations
that would be specified firms at their
request to discuss issues relating to the
proposed guidance.24 This section
provides an overview of the general
themes raised by commenters. The
comments received on the proposed
guidance are further discussed below in
the sections describing the final
guidance (and, in some cases,
previously in section I), including any
changes that the agencies have made to
the proposed guidance in response to
comments.
24 Summaries of those meetings and copies of the
comments can be found on each agency’s website.
https://www.federalreserve.gov/apps/foia/View
Comments.aspx?doc_id=OP-1816&doc_ver=1;
https://www.fdic.gov/resources/regulations/federalregister-publications/2023/2023-guidanceresolution-plan-submissions-domestic-triennial3064-za37.html.

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Differentiating Expectations Based on
Size, Complexity, and Risk
One commenter contended that the
proposed guidance did not sufficiently
differentiate expectations among firms
subject to resolution planning guidance.
The commenter argued that section 165
of the Dodd-Frank Act requires the
agencies to tailor application of
prudential standards issued pursuant to
that section, such as resolution planning
guidance; contended that the proposal
was too similar to the 2019 U.S. GSIB
Guidance; and encouraged expectations
in the final guidance to be further
differentiated based on size, risk, and
other factors.
Resolution Strategy and Transition
Period
Several commenters supported the
proposal’s inclusion of expectations for
both MPOE and SPOE resolution
strategies and the agencies’ statement
that firms have ability to choose their
preferred strategy. However, as noted
above, some commenters questioned
whether the agencies were expecting or
encouraging firms to adopt an SPOE
resolution strategy and recommended
that the agencies disclose publicly
whether they prefer a particular
resolution strategy. For firms that
change resolution strategies, some
commenters requested that the agencies
provide a transition period during
which the agencies would not make
credibility findings in connection with
a plan review.
Capital and Liquidity
The agencies received a number of
comments on the capital and liquidity
sections of the proposed guidance.
Regarding the capital section of the
proposed guidance, one commenter
asserted that including expectations
regarding the positioning of capital for
firms with an SPOE resolution strategy
is premature given that finalization of a
proposal to modify the capital
requirements for large banking
organizations 25 and the LTD proposal
may impact firms’ capital planning,
contended that the proposal included
expectations that are duplicative of
existing capital requirements, and
suggested removing the guidance on
Resolution Capital Adequacy and
Positioning (RCAP) from the final
guidance. Regarding expectations for
firms using an MPOE resolution
strategy, one commenter agreed that
additional expectations are not
25 Regulatory Capital Rule: Large Banking
Organizations and Banking Organizations With
Significant Trading Activity, 88 FR 64028 (Sept. 18,
2023) (Capital proposal).

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warranted, while another commenter
argued for capital plans for each
material entity and asked the agencies to
align expectations for the MPOE capital
guidance with SPOE capital guidance.
Regarding the liquidity section of the
proposed guidance, one commenter
argued that Resolution Liquidity
Adequacy and Positioning (RLAP)
expectations are not appropriate due to
the comparatively simple legal entity
structures and reduced risk profiles of
these firms and claimed that RLAP is
redundant with certain regulatory
requirements. In addition, one
commenter requested that the final
guidance strengthen expectations for
liquidity in resolution by including a
procedure or protocol for liquidity
related decisions, irrespective of
resolution strategy.
IDI Resolution Analysis
The agencies received a number of
comments on the proposed guidance
related to the resolution of a subsidiary
material entity U.S. IDI. Multiple
commenters requested clarity on how
the firm’s plan should address the
expectations regarding the FDIC’s
statutory least-cost requirement and
questioned whether there is sufficient
information available for firms to
effectively evaluate whether a proposed
resolution plan would satisfy the leastcost analysis expectations. These
commenters also questioned whether
the least-cost analysis would be of value
to FDIC in an actual resolution and
argued that the guidance should be
aligned with the requirements of the IDI
Rule. One stated sufficient time should
be given for firms to conduct new
analyses and seek additional guidance
from the agencies and that aspects of
this section of the proposal should not
be finalized.
Another commenter argued that firms
should not be expected to demonstrate
that their preferred strategy would be
consistent with the FDIC’s statutory
least-cost requirement. One commenter
further suggested that the Proposed IDI
Rule is a better forum to address how
IDI subsidiaries can be resolved under
the FDI Act.
Another commenter suggested that
the agencies should require firms to
develop resolution strategies involving
bridge depository institutions (BDIs)
and recommended that the guidance
address the value of assets transferred to
such a BDI, how the resolution plan
would address the IDI’s franchise value,
and how the preferred resolution
strategy would result in a least-costly
resolution.

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Derivatives and Trading
Some commenters supported
including expectations for derivatives
and trading activity in the final
guidance, contending that derivatives
activity for domestic triennial full filers
may increase in the future and proposed
applying such guidance to firms with
net derivatives exceeding a given
threshold. However, one commenter
supported not including such
expectations, stating it was appropriate
to exclude such guidance because the
specified firms have limited derivatives
and trading portfolios, particularly
relative to the U.S. G–SIB banking
organizations covered by such guidance.
Connection to Other Rules
The agencies received a number of
comments about the interaction of the
proposed guidance with several other
rulemaking initiatives by the Federal
banking agencies. For example, some
commenters recommended coordinating
the FDIC’s Proposed IDI Rule revisions
with the resolution plan rule and final
guidance for the specified firms. Two
commenters suggested that the agencies
consider the interaction between the
proposed guidance and the LTD
proposal to ensure the two proposals
work together to improve the
resolvability of applicable banking
organizations and avoid duplicative or
contradictory requirements. One
commenter also expressed concern
including certain expectations in the
final guidance, such as those relating to
capital, would be premature before
finalizing the Capital proposal and LTD
proposal, which impact firms’ capital
planning.

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Timing of Next Resolution Plan
Several comments discussed the
timing of the next resolution plan
submission and its relationship to this
final guidance. Some commenters
recommended providing at least one
year between issuing final guidance and
the deadline for domestic triennial full
filers’ next resolution plan submissions.
However, other commenters suggested
that six months from publication of the
final guidance to the first resolution
plan submission would be adequate for
firms to take into account the guidance.
III. Final Guidance
After considering the comments,
conducting additional analysis, and
further assessing the business and risk
profiles of domestic triennial full filers,
the agencies are issuing final guidance
that includes certain modifications and
clarifications from the proposal. In
particular, the capital, liquidity,
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IDI resolution, separability, and
assumptions sections of the final
guidance reflect changes from the
proposed guidance. In addition, as was
noted in the proposal,26 the final
guidance consolidates all prior
resolution planning guidance for the
firms in one document. Further, as was
noted in the proposal,27 the final
guidance is not intended to override the
obligation of an individual firm to
respond in its next resolution plan
submission to pending items of
individual feedback or any
shortcomings or deficiencies jointly
identified or determined by the agencies
in that firm’s prior resolution plan
submissions. The guidance is drafted to
reflect the current conditions in the
industry and institutions as they exist
today.
As discussed below,28 several
commenters asserted that the proposal
did not adequately differentiate among
covered companies based on their size,
complexity, and risk to financial
stability. The guidance, however, takes
into account the size and complexity of
firms, their resolution strategy, and
whether they are based in the United
States or in a foreign jurisdiction. In
addition, the final guidance is not meant
to limit firms’ consideration of
additional vulnerabilities or obstacles
that might arise based on a firm’s
particular structure, operations, or
resolution strategy.
The agencies also note that
commenters described certain
expectations that are set forth in the
guidance as ‘‘requirements.’’ As the
agencies indicated in the proposed
guidance and are now reaffirming, the
final guidance does not have the force
and effect of law. Rather, the final
guidance outlines the agencies’
supervisory expectations regarding each
subject area covered by the final
guidance.29 The final guidance includes
language reflecting this position.30
Finally, the agencies made several
minor, non-substantive changes from
the proposal, including to align the
wording of guidance directed at firms
that adopt an SPOE resolution strategy
and firms that adopt an MPOE
resolution strategy.
A. Scope of Application
The agencies proposed applying the
guidance to all domestic triennial full
filers and invited comment on all
26 See

proposed guidance at 88 FR 64628.
id.
28 See infra section III.K of this document.
29 See 12 CFR 262.7 and appendix A to 12 CFR
part 262; 12 CFR part 302.
30 See infra section V.I of this document.
27 See

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aspects of the proposed scope of the
guidance. The agencies received no
comments concerning the scope of the
guidance’s application and are
finalizing this section of the guidance as
proposed.
B. Transition Period
The proposed guidance did not
describe how the guidance would be
applied to domestic banking
organizations that become covered by its
scope, but it did request comment on all
aspects of the proposed scope of
application. To provide certainty to
domestic banking organizations, the
final guidance states that when a
domestic banking organization becomes
a specified firm, the final guidance will
apply to the firm’s next resolution plan
submission with a submission date that
is at least 12 months after the time the
firm becomes a specified firm.31 If a
specified firm ceases to be a domestic
triennial full filer, it will no longer be
considered a specified firm, and the
guidance will no longer be applicable to
that firm as of the date the firm ceases
to be a domestic triennial full filer.
C. Capital
For specified firms with an SPOE
resolution strategy, the agencies
proposed capital expectations
substantially similar to those in the
2019 U.S. GSIB Guidance. The ability to
provide sufficient capital to material
entities without disruption from
creditors is essential to an SPOE
resolution strategy’s objective of
ensuring that material entities can
continue to operate as the firm is
resolved. The proposal described
expectations concerning the appropriate
positioning of capital and other lossabsorbing instruments (e.g., debt that a
parent holding company may choose to
forgive or convert to equity) among the
material entities within the firm (RCAP).
The proposal also described
expectations regarding a methodology
for periodically estimating the amount
of capital that may be needed to support
each material entity after the bankruptcy
filing (resolution capital execution need,
or RCEN).
The agencies received several
comments on the capital section of the
proposed guidance. One commenter
asserted that including expectations in
this guidance regarding the positioning
of capital is premature given that
finalization of the Capital proposal and
the LTD proposal may impact firms’
capital planning. The commenter argued
31 The plan type for that next submission remains
as specified by the Rule, i.e., a full or targeted
resolution plan. See 12 CFR 243.4 and 381.4.

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that existing capital requirements are
sufficient for the size and complexity of
the firms subject to this guidance
without RCAP expectations, which, the
commenter asserted, would add more
complexity to the resolution planning
process.
After reviewing these comments, the
agencies are finalizing this section of the
guidance generally as proposed, but
with one clarification. Proposed
guidance related to the methodology for
periodically estimating the amount of
capital that may be needed to support
material entities in bankruptcy (RCEN)
could have been construed as
establishing a mandatory minimum
capital requirement. As the agencies
have discussed elsewhere, resolution
plan guidance is not binding and does
not establish legal requirements.32 The
final guidance clarifies the kind of
information the agencies expect a firm
to provide if that firm’s resolution
strategy includes recapitalizing material
entities but does not establish
requirements for firms.
RCAP expectations are important for
firms to ensure the appropriate
positioning of capital and other lossabsorbing instruments among the
material entities within the firm and to
effectively execute a SPOE resolution
strategy. Finalizing RCAP expectations
is not premature in light of outstanding
proposals such as the LTD rulemaking
and other pending rules because the
RCAP expectations can be achieved
with or without the LTD contemplated
in the LTD proposal. The Federal
banking agencies have not finalized the
LTD proposal as of the issuance of this
final guidance, and comments on that
proposed rule are currently under
consideration. Specifically, the final
guidance does not rely on or presume
the finalization of pending rules and
instead states, consistent with the
proposal, that a resolution plan should
be based on the current state of the
applicable legal and policy
frameworks.33 The guidance is intended
to assist firms in developing their
resolution plans, which are required to
be submitted pursuant to the DoddFrank Act and the Rule. While other
capital and resolution-related rules may
establish minimum standards applicable
to firms submitting resolution plans,
this guidance is designed to facilitate a
firm’s own analysis of its expected
needs in resolution across that firm’s
material entities.
Additionally, the stress experienced
by and the failure of several large
banking organizations in March 2023
32 See
33 See

supra section III of this document.
infra section V.VIII of this document.

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highlighted the fast-moving nature of
stress events, as several banking
organizations entered resolution
proceedings rapidly. These events also
highlighted the potential for the failure
of a large regional banking organization
to affect financial stability. Successful
execution of an SPOE resolution
strategy—including the need to ensure
that individual material entities have
adequate capital to maintain operations
as the firm is resolved—is unlikely to be
successful under a short time frame
without advance planning. Appropriate
positioning of capital and other lossabsorbing instruments among the firm’s
material entities is an important element
of this advanced planning to reduce
uncertainty and enable timely
recapitalization consistent with an
SPOE resolution strategy. Accordingly,
the agencies are finalizing guidance that
includes RCAP expectations for firms
that adopt an SPOE strategy.
For firms that adopt an MPOE
resolution strategy, the agencies did not
propose further expectations concerning
capital and asked a question about
whether capital-related expectations
should be applied. In response, one
commenter agreed with the proposal
that additional expectations are not
warranted for firms using an MPOE
resolution strategy, arguing that such
expectations would serve no purpose.
However, another commenter
contended that it is not prudent to
assume that material entities within a
holding company structure can be
wound down in an orderly manner and
that, at a minimum, capital plans are
needed for each material entity to
preserve its value during the transition
period between a firm’s failure and
when it can be sold or closed in an
orderly way. The commenter asked the
agencies to reconsider expectations for
firms that adopt an MPOE resolution
strategy and align them with
expectations for firms that adopt an
SPOE resolution strategy.
The agencies have determined that
additional capital expectations for firms
selecting an MPOE resolution strategy
are not necessary at this time. Under an
MPOE resolution strategy, most material
entities do not continue as going
concerns upon the firm’s entry into
resolution proceedings and are likely to
have already depleted existing capital.
Accordingly, the agencies are finalizing
this section as proposed.
D. Liquidity
For firms that adopt an SPOE
resolution strategy, the agencies
proposed liquidity expectations
substantially similar to those in the
2019 U.S. GSIB Guidance. A firm’s

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ability to reliably estimate and meet its
liquidity needs prior to, and in,
resolution is important to the execution
of a firm’s resolution strategy because it
enables the firm to respond quickly to
demands from stakeholders and
counterparties, including regulatory
authorities in other jurisdictions and
financial market utilities. Maintaining
sufficient and appropriately positioned
liquidity also allows subsidiaries to
continue to operate while the firm is
being resolved in accordance with the
firm’s preferred resolution strategy. For
firms that adopt an MPOE resolution
strategy, the agencies proposed that a
firm should have the liquidity
capabilities necessary to execute its
preferred resolution strategy, and its
plan should include analysis and
projections of a range of liquidity needs
during resolution.
The agencies received several
comments on the liquidity section of the
proposed guidance. One commenter
supported including RLAP expectations
in the final guidance for firms that adopt
an SPOE resolution strategy, while
another commenter requested that the
agencies remove RLAP from the final
guidance. The second commenter
argued that RLAP expectations are not
appropriate due to the comparatively
simple legal entity structures and
reduced risk profiles of the firms subject
to the proposed guidance. The
commenter also claimed that RLAP
would be redundant to certain
regulatory requirements, such as the
Liquidity Coverage Ratio (LCR) and
Internal Liquidity Stress Testing (ILST).
Another commenter requested that,
irrespective of resolution strategy, the
guidance strengthen expectations for
liquidity in resolution by including a
procedure or protocol for liquidity
related decisions. The commenter
argued that the guidance should affirm
the importance of overcoming barriers
to moving liquidity across material legal
entities and clarify which types of
transfers of liquidity are permissible for
material entities in resolution.
After reviewing these comments, the
agencies are finalizing this section of the
guidance largely as proposed, with one
clarifying edit concerning forecasting
maximum operating liquidity and peak
funding needs. The final guidance
clarifies that these forecasts should
ensure that material entities can operate
through resolution, as compared to the
proposed guidance that provided that
the forecasts should ensure that material
entities can operate after the firm files
for bankruptcy.
RLAP expectations are not addressed
by ILST and other regulatory
requirements. Maintaining sufficient

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and appropriately positioned liquidity
is critical to executing an SPOE
resolution strategy, regardless of the size
and complexity of the banking
organization. The LCR and ILST
requirements that commenters
referenced serve a different purpose—to
promote resilience of firms’ funding
profiles—and are not focused on
resolution planning.
Finally, the agencies are not
establishing expectations regarding
procedures or protocols for liquidityrelated decisions and the types of
transfers of liquidity that are
permissible for material entities in
resolution for firms that adopt a MPOE
resolution strategy. The Rule already
includes requirements for firms to
include detailed descriptions of funding
and liquidity needs and resources of
material entities, and to identify
interconnections and interdependencies
related to liquidity arrangements.34
Beyond the assumptions specified in the
final guidance related to liquidity,
additional details of how each firm
provisions liquidity in the lead up to
and during resolution are not needed at
this time. Furthermore, firms should
follow procedures and protocols that are
aligned with their larger liquidity
management frameworks to facilitate
their preferred resolution strategies.

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E. Governance Mechanisms
The agencies proposed governance
mechanisms expectations for domestic
firms that use an SPOE resolution
strategy. These firms would have been
expected to develop an adequate
governance structure with triggers that
identify the onset, continuation, and
increase of financial stress to ensure that
there is sufficient time to prepare for
resolution-related actions. The agencies
did not propose governance
mechanisms expectations for domestic
firms contemplating an MPOE
resolution strategy, as entry of certain
types of material entities into resolution
would be determined by criteria
prescribed in statute or dependent to
some extent on actions taken by
regulatory authorities in implementing a
statute. The agencies requested
comment on whether to apply
additional governance mechanisms
expectations to domestic firms
contemplating an MPOE resolution
strategy. Some commenters called for
the agencies to apply similar governance
mechanisms expectations regardless of a
firm’s preferred resolution strategy,
arguing that many aspects of resolution
34 12 CFR 243.5(c)(1)(iii) and (g) and
381.5(c)(1)(iii) and (g).

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planning are the same or similar for
MPOE and SPOE resolution strategies.
One commenter also encouraged the
agencies to adopt expectations that
firms articulate their internal legal
strategy, processes for making key
decisions, and roles and responsibilities
leading up to and after a material entity
of a firm using an MPOE resolution
strategy enters bankruptcy. Another
commenter claimed that governance
mechanisms are needed for domestic
MPOE filers to preserve the value of
each material entity during the
transition period between failure and
orderly resolution. However, another
commenter argued that final guidance
should not include governance
mechanisms expectations for domestic
MPOE filers as such expectations would
not meaningfully improve resolvability.
After review and consideration of
these comments, the agencies are
finalizing this section of the guidance
largely as proposed, with one
clarification applicable only to firms
that adopt an SPOE strategy. The
proposed guidance provided that a firm
can reproduce a legal analysis that was
submitted in a prior plan submission,
and that the firm should build upon the
analysis. The final guidance clarifies
that the agencies expect that a firm that
relies upon a previously submitted
analysis ensure it remains accurate and
up to date. While there is a general
obligation for firms to submit plans that
contain accurate information, the
agencies are providing this clarification
due to the agencies’ experience that
certain legal matters in some resolution
plan submissions have been outdated.
Regarding firms that adopt an MPOE
strategy, the agencies are finalizing this
section of the guidance as proposed.
Under an MPOE resolution strategy,
certain material entities’ entry into
resolution is typically determined by or
dependent on the actions of supervisory
and resolution authorities. Adopting
expectations for triggers, playbooks, prebankruptcy support, internal legal
strategy, processes for making key
decisions, and roles and responsibilities
for domestic triennial full filers
adopting an MPOE resolution strategy,
with their present operations, activities,
and structures, would not meaningfully
improve the resolvability of the
specified firms. Accordingly, the final
guidance does not contain governance
mechanisms expectations for those
firms.
F. Operational
For firms that adopt an SPOE
resolution strategy, the agencies
proposed aspects of the operational
expectations of the 2019 U.S. GSIB

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Guidance and SR letter 14–1,35 with
modifications based on the specific
characteristics and complexities of the
specified firms. Like the 2019 U.S. GSIB
Guidance, the proposal contained
expectations on managing, identifying,
and valuing collateral; management
information systems (MIS); and shared
and outsourced services. For firms that
adopt an MPOE resolution strategy, the
agencies proposed operational
expectations based on SR letter 14–1
and the 2019 U.S. GSIB Guidance that
are limited to those most relevant to an
MPOE resolution strategy. As noted in
the proposal, development and
maintenance of operational capabilities
is important to support and enable
execution of a firm’s preferred
resolution strategy, including providing
for the continuation of identified critical
operations and preventing or mitigating
adverse effects on U.S. financial
stability.
The agencies received two comments
on the proposed guidance. One
comment argued that the proposed
guidance’s expectation that MPOE firms
remediate vendor arrangements to
support continuity of shared and
outsourced services is overbroad. The
commenter asserted that this
expectation is inappropriate for MPOE
firms that mostly receive external
services through their IDIs because
termination of such vendor contracts
due to ipso facto clauses would be
stayed by the FDI Act,36 and as many
firms include resolution-resilient terms
in vendor contracts when those
contracts undergo periodic review and
renewal. The commenter recommended
that the Agencies specify that this
expectation would apply only to
contracts not covered by the FDI Act
stay. Another commenter contended
that firms with limited payment,
clearing, and settlement (PCS) activities,
such as firms without identified critical
operations related to those activities,
should not have to develop the same
capabilities as firms with more complex
PCS activities.
After review and consideration of
these comments, the agencies are
finalizing this area of the guidance with
three clarifications applicable only to
firms that adopt an SPOE strategy, and
one modification applicable to firms
with either preferred resolution strategy.
First, the proposed guidance for firms
that adopt an SPOE strategy stated that
a firm should maintain a fully
35 SR letter 14–1, ‘‘Principles and Practices for
Recovery and Resolution Preparedness’’ (Jan. 24,
2014), available at: https://www.federalreserve.gov/
supervisionreg/srletters/sr1401.htm.
36 See 12 U.S.C. 1821(e)(13).

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actionable implementation plan to
ensure the continuity of shared services
that support identified critical
operations or core business lines.
Implied in the concept of supporting
identified critical operations or core
business lines is the notion that a firm
would need to be able to execute its
resolution strategy. Accordingly, the
final guidance for firms that adopt an
SPOE strategy explicitly states that a
firm’s implementation plan to ensure
continuity of shared services should
include those services that are material
to the execution of the firm’s resolution
strategy.
Second, the proposed guidance for
firms that adopt an SPOE strategy stated
that a firm should demonstrate
capabilities for continued access to PCS
services essential to an orderly
resolution through a framework to
support such access and the provided
elements of such a framework. The
agencies note that prior instances of
resolution plan guidance contained
certain limitations on similar PCS
framework expectations,37 and the final
guidance adopts that language to clarify
the scope of said expectations.
Third, the proposed PCS guidance for
firms that adopt an SPOE strategy
contained several references to ‘‘various
currencies.’’ The agencies note that in
the finalization of the 2020 FBO
Guidance, the agencies revised similar
language in response to a comment
requesting that certain aspects of that
guidance be made consistent with
international expectations.38 The final
guidance is adopting the language from
the 2020 FBO Guidance for that same
reason.
Additionally, the agencies recognize
that firms anticipate relying on external
parties for the execution of some aspects
of the resolution strategy, and the
proposal included and the final
guidance maintains the expectation that
a firm identify and support the
continuity of outsourced services that
support critical operations or are
material to the execution of the
preferred resolution strategy. Such
outsourced services that firms may rely
on could be employing outside
bankruptcy counsel and consultants to
help prepare documents needed to file
for bankruptcy, and to represent the
firm during the course of the bankruptcy
proceedings. The agencies expect that
covered companies engage in advance
planning to help facilitate their ability
to complete all filings, motions,
supporting declarations and other
documents to prepare for and file an

G. Legal Entity Rationalization and
Separability
For domestic banking organizations
that adopt an SPOE resolution strategy,
the agencies proposed adopting legal
entity rationalization (LER) and
separability expectations from the 2019
U.S. GSIB Guidance. The LER
expectations explained that a firm’s
legal structure should support the firm’s
preferred resolution strategy, including
by: facilitating the recapitalization and
liquidity support of material entities;
facilitating the sale, transfer, or winddown of certain discrete operations;

37 2020
38 See

FBO Guidance at 85 FR 83572–73.
2020 FBO Guidance at 85 FR 83566.

orderly resolution in bankruptcy. In
recognition of this expectation, the final
guidance states that—regardless of
strategy—those professionals’ services
could be material to the execution of a
firm’s preferred resolution strategy and,
if so, should be accounted for in the
firm’s resolution plan. Accordingly, the
agencies expect that firms should
prepare during business-as-usual to
ensure they can complete and file all
documents needed to initiate their
preferred resolution strategy.
The other aspects of this section of the
guidance are being finalized as
proposed. The comment addressing
contract remediation correctly observes
that the FDI Act permits the FDIC as
receiver of a failed IDI to enforce
contracts with that IDI notwithstanding
any provisions in the contract
permitting termination due to
insolvency or appointment of the
receiver. However, it is advantageous for
contracts that support identified critical
operations or that are material to the
execution of the resolution strategy to
not purport to permit termination.
Counterparties may not be aware of the
receiver’s authority under the FDI Act to
enforce such agreements, potentially
requiring the receiver to seek authority
from a court to compel the
counterparty’s performance, which
could lead to interruption of identified
critical operations and capabilities
needed to execute the resolution
strategy. Further, counterparties located
overseas may not recognize the
authority afforded the receiver to
compel the performance of contracts.
The agencies recognize that contract
remediation is an ongoing process and
encourage firms to make such changes
proactively.
Regarding PCS activities, as discussed
elsewhere,39 the Agencies note that the
level of detail provided in a firm’s plan
should be both consistent and
commensurate with the firm’s risk and
activities.

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39 See

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adequately protecting the subsidiary
IDIs from risks arising from the
activities of any nonbank subsidiaries of
the firm; and minimizing complexity
that could impede an orderly resolution.
The separability expectations outlined
that a firm should identify discrete
operations that could be sold or
transferred in resolution, with the
objective of providing optionality in
resolution, including via a detailed
separability analysis that addresses
divestiture options, execution plans,
and impact assessments.
For domestic banking organizations
using an MPOE resolution strategy, the
agencies proposed LER and separability
expectations that are reduced as
compared to those contained in the
2019 U.S. GSIB Guidance. The LER
expectations clarified that the firm
should consider various factors and
describe in its plan how the legal entity
structure aligns core business lines and
any identified critical operations with
the firm’s material entities, as well as
any cases where a material entity IDI
relies on an affiliate that is not the IDI’s
subsidiary during resolution. The
separability expectations explained that
a firm should include options for the
sale, transfer, or disposal of significant
assets, portfolios, legal entities, or
business lines in resolution and provide
supporting analysis, including an
execution plan, identification of any
impediments and mitigants, a financial
impact assessment, and an identified
critical operation impact assessment.
The agencies received one comment
on the LER and separability guidance
for domestic banking organizations. The
commenter contended that separability
analysis is inappropriate for businesses
and legal entities that would be wound
down in resolution, as it may not be
feasible to sell or otherwise transfer
such businesses, and that separability
analysis would not enhance
resolvability. The commenter further
claimed that many elements of the
separability analysis may not be
appropriate for firms that are not active
in the investment banking space or lack
large mergers and acquisitions teams.
After consideration of the comment
received, the agencies are issuing legal
entity rationalization guidance for both
SPOE and MPOE firms. LER criteria
enhance an orderly resolution by
promoting in business-as-usual a
corporate structure that supports a
firm’s preferred resolution strategy. The
agencies are retaining these
expectations, in part, to encourage firms
to consider resolution implications of
changes to corporate structure,
including from future growth or mergers
and acquisitions. For firms with SPOE

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resolution strategies, the agencies
continue to encourage the firms to
develop and apply LER criteria to
facilitate the sale, transfer, or winddown of certain discrete operations
within a timeframe that would
meaningfully increase the likelihood of
orderly resolution. The agencies
continue to encourage firms using
MPOE resolution strategies to consider
potential sales, transfers, and winddowns during resolution as they
maintain their legal entity structures.
However, the separability section of
guidance is not needed at this time for
the specified firms due to their current
corporate structures and other
separability-related expectations. Most
of the specified firms have three or
fewer material entities, with the
overwhelming majority of their assets
concentrated in their IDIs. In addition,
the Rule requires firms to address the
feasibility and impact of sales or
divestitures and the final LER guidance
contains separability-related
expectations. The agencies may
consider the need for firm-specific
separability expectations in the future
for specified firms that substantially
increase their non-bank activities or
change in a way such that separability
becomes critical to their resolvability.
Finally, the agencies moved the
description of their expectation on
governance processes from the proposed
separability section to the LER section
of the final guidance text.

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H. Insured Depository Institution
Resolution
Background
In the proposal, the agencies provided
clarifying expectations as to how a firm
adopting an MPOE resolution strategy
with a material entity IDI should
explain how the IDI can be resolved
under the FDI Act in a manner that is
consistent with the overall objectives of
the resolution plan. In particular, the
proposed expectations for IDI resolution
were designed to support the resolution
plans’ effectiveness in substantially
mitigating the risk that the failure of the
specified firm would have serious
adverse effects on financial stability in
the United States, while also adhering to
the legal requirements of the FDI Act
without relying on the assumption that
the systemic risk exception will be
invoked in connection with the
resolution of the firm. For example, the
agencies proposed clarifying that if a
firm adopting an MPOE resolution
strategy selects an IDI resolution
strategy other than a payout liquidation,
the firm’s plan should provide
information supporting the feasibility of

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the firm’s selected strategy, although
such a feasibility analysis need not
consist of a full FDI Act least-cost
requirement analysis. The agencies
proposed that a firm could instead
provide a more limited analysis. The
proposal noted that the same
expectations would not be applicable to
firms adopting an SPOE resolution
strategy because the U.S. IDI
subsidiaries of such firms would not be
expected to enter resolution.
The agencies received a number of
comments on the proposed guidance
related to the resolution of a subsidiary
material entity U.S. IDI. Some
commenters requested additional clarity
on how the firm’s plan should address
the expectation that the plan include an
analysis of how the resolution strategy
could potentially meet the FDIC’s
statutory least-cost requirement. One
commenter suggested that the agencies
should require firms to develop
resolution strategies involving BDIs.
This commenter recommended that the
guidance address how firms could
describe and quantify the value of the
firm’s assets transferred to such a BDI,
and that the agencies should provide
guidance so that firms would address
how the resolution plan would
incorporate the value of the IDI’s assets
and liabilities, including its franchise
value, and how the preferred resolution
strategy would result in a least-costly
resolution. The commenter also
recommended that firms and regulators
reach agreement on certain assumptions
regarding valuations.
Another commenter argued that firms
adopting an MPOE strategy should not
be expected to demonstrate that their
preferred strategy would be consistent
with the FDIC’s statutory least-cost
requirement. This commenter stated
that efforts to conduct a hypothetical
least-cost requirement analysis, or a
proxy for that analysis, would be of no
or minimal value to the FDIC in an
actual resolution event. The commenter
claimed that it would not be possible to
conduct a least-cost test requirement
analysis in a resolution plan submission
in the absence of actual bids from actual
buyers. Instead, the commenter
recommended that the guidance provide
expectations for how firms selecting an
MPOE strategy could demonstrate their
valuation capabilities. The commenter
also suggested that because a least-cost
requirement analysis is not a component
of the Proposed IDI Rule, it also should
not be a component of the guidance.
This commenter requested sufficient
time to address any finalized guidance
that provides expectations for including
least-cost requirement analysis.

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Several commenters suggested that
the Proposed IDI Rule is a better forum
to address how the IDI subsidiary of a
specified firm selecting an MPOE
strategy can be resolved under the FDI
Act in a manner that is consistent with
the FDI Act. A commenter also
suggested that the agencies’
expectations for resolution plan
submissions under the Rule should
align with the requirements of the
FDIC’s IDI Rule plan submissions.
When an IDI fails and the FDIC is
appointed receiver, the FDIC generally
must use the resolution option for the
failed IDI that is least costly to the DIF
of all possible methods (the least-cost
requirement).40 A resolution plan that
contemplates the separate resolution of
a U.S. IDI that is a material entity and
the appointment of the FDIC as receiver
for that IDI should explain how the
resolution could be achieved in a
manner that adheres to applicable law,
including the FDI Act, and that would
achieve the overall objectives of the
resolution plan. Prior resolution plans
that have addressed the resolution of the
IDIs in MPOE strategies have sometimes
included resolution mechanics that are
not consistent with the FDI Act,
including inappropriate assumptions
that uninsured deposits could
automatically be transferred to a BDI.
Separate and distinct from the Rule,
the FDIC has a regulation, the IDI Rule,
requiring certain IDIs (covered IDIs or
CIDIs) to submit to the FDIC resolution
plans providing information about how
the CIDI can be resolved under the FDI
Act. Contemporaneous with publication
of the proposed guidance, the FDIC
published in the Federal Register the
Proposed IDI Rule, a proposed
rulemaking to amend and restate the IDI
Rule, which has since been finalized
and was published in the Federal
Register on July 9, 2024.
The IDI Rule and the Rule each have
different goals, and, accordingly, the
expected content of the respective
resolution plans is different. The
purpose of the IDI Rule is to ensure that
40 See 12 U.S.C. 1823(c)(4)(A). A deposit payout
and liquidation of the failed IDI’s assets (payout
liquidation) is the general baseline the FDIC uses in
a least-cost requirement determination. See 12
U.S.C. 1823(c)(4)(D). An exception to this
requirement exists when a determination is made
by the Secretary of the Treasury, in consultation
with the President and after a written
recommendation from two-thirds of the FDIC’s
Board of Directors and two-thirds of the Board, that
complying with the least-cost requirement would
have serious adverse effects on economic
conditions or financial stability and implementing
another resolution option would avoid or mitigate
such adverse effects. See 12 U.S.C. 1823(c)(4)(G). A
specified firm should not assume the use of this
systemic risk exception to the least-cost
requirement in its resolution plan.

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the FDIC has access to the information
it needs to resolve a CIDI efficiently in
the event of its failure, including an
understanding of the CIDI’s ability to
produce the information the FDIC
would need to conduct a least-cost
determination under a wide range of
circumstances.
The Rule serves a different purpose.
The Rule requires a covered company to
submit a resolution plan that would
allow rapid and orderly resolution of
the firm under the Bankruptcy Code in
the event of material financial distress
or failure. The regional bank failures in
March 2023 demonstrated that banking
organizations of size and complexity
similar to that of the specified firms—
or even smaller and less complex
banking organizations—can be
disruptive to U.S. financial stability. In
the case of Silicon Valley Bank and
Signature Bank, uninsured depositors
would have faced the potential for
significant losses had the least costly
approach to resolution, a payout
liquidation, been adopted. The potential
for contagion from the deposit runs at
the firms that failed, as well as related
potential for risks to the economy and
financial stability, led the Secretary of
the Treasury, in consultation with the
President and after a written
recommendation from the FDIC’s Board
of Directors and the Board, to invoke the
systemic risk exception to enable the
FDIC to resolve these institutions in a
way that would avoid or mitigate
serious adverse effects on economic
conditions or financial stability. Though
a specified firm would be conducting its
analysis without input in the form of
actual bids from potential buyers, the
agencies expect firms to use available
information to estimate the value of its
franchise for purposes of conducting the
limited least-cost analysis articulated in
the guidance.
If a firm’s resolution plan under the
Rule that includes an MPOE strategy
calls for resolving an IDI using a strategy
other than payout liquidation, the plan
should explain how the requirements of
the FDI Act could be met without
depending upon extraordinary
government support. Even though this
analysis is not binding in an actual
resolution scenario, an analysis showing
that the firm’s preferred resolution
strategy could satisfy requirements of
the FDI Act could help the firm
demonstrate that the resolution plan’s
preferred strategy could be executed in
a manner consistent with applicable
law. If a resolution plan does not
provide such an explanation, it may be
appropriate to conclude that the strategy
would not satisfy the FDI Act’s relevant
provisions, such as the least-cost

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requirement, which could represent a
weakness in the plan. As a general
matter, the agencies followed this
practice in reviewing previous full
resolution plan submissions.
Guidance. In response to commenters,
the agencies are providing additional
detail to help address commenters’
questions related to the FDI Act’s leastcost requirement and how it relates to
the expectations in this final guidance.
The final guidance does not express a
change in the agencies’ expectations.
Instead, the final guidance provides
more detail on approaches a firm can
use to explain how the resolution of its
IDI subsidiary can be achieved in a
manner that substantially mitigates the
risk that the firm’s failure would have
serious adverse effects on U.S. financial
stability while also complying with the
statutory and regulatory requirements
governing IDI resolution. The final
guidance lists a number of different
common strategies for resolving an IDI
and describes the kind of information
that a firm could provide to explain how
a resolution using one of the example
strategies could be consistent with the
least-cost requirement. The final
guidance also provides information
about calculating the value of an IDI’s
assets and its franchise value. Finally,
the final guidance explicitly notes that
the agencies are not expecting a firm to
provide a complete least-cost analysis.
Strategies for Resolving an IDI
Purchase and Assumption
Transaction. The FDIC typically seeks
to resolve a failed IDI by identifying,
before the IDI’s failure, one or more
potential acquirers so that as many of
the IDI’s assets and deposit liabilities as
possible can be sold to and assumed by
the acquirer(s) instead of remaining in
the receivership created on the failure
date.41 This transaction form, termed a
purchase and assumption or P&A
transaction, has often been the
resolution approach that is least costly
to the DIF, and is usually considered the
easiest for the FDIC to execute and the
least disruptive to the depositors of the
failed IDI—particularly in the case of
transactions involving the assumption
of all the failed IDI’s deposits by the
assuming institution (an all-deposit
transaction).
The limited size and operational
complexity present in most small-bank
failures have been significant factors in
allowing the FDIC to execute P&A
transactions with a single acquirer on
numerous occasions. Resolving an IDI
41 See generally https://www.fdic.gov/resources/
resolutions/bank-failures/ for background about the
resolution of IDIs by the FDIC.

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66397

via a P&A transaction over the closing
weekend, however, has not always been
available to the FDIC, particularly in
failures involving large IDIs. P&A
transactions require lead time to
identify potential buyers and allow due
diligence on, and an auction of, the
failing IDI’s assets and banking
business, also termed its franchise. The
acquiring banks must also have
sufficient excess capital to absorb the
failed IDI’s assets and deposit franchise,
sufficient expertise to manage business
integration, and the ability to comply
with several legal requirements. Larger
failed banks can pose significant, and
potentially systemic, challenges in
resolutions that make a P&A transaction
less viable. These challenges include: a
more limited pool of potential acquirers
as a failed IDI increases in size;
operational complexities that require
lengthy advance planning on the part of
the IDI and the FDIC; the development
of certain expertise; potential market
concentration and antitrust
considerations; and potentially the need
to maintain the continuity of activities
conducted in whole or in part in the IDI
that are critical to U.S. financial
stability.
Alternative Resolution Strategies. If
no P&A transaction that meets the leastcost requirement can be accomplished
at the time an IDI fails, the FDIC must
pursue an alternative resolution
strategy. The primary alternative
resolution strategies for a failed IDI are
(1) a payout liquidation, or (2)
utilization of a BDI.
Payout Liquidation. The FDIC
conducts payout liquidations by paying
insured deposits in cash or transferring
the insured deposits to an existing
institution or a new institution
organized by the FDIC to assume the
insured deposits (generally, a Deposit
Insurance National Bank or DINB). In
payout liquidations, the FDIC as
receiver retains substantially all of the
failed IDI’s assets for later sale, and the
franchise value of the failed IDI is lost.
A payout liquidation is often the most
costly and disruptive resolution strategy
because of this destruction of franchise
value and the FDIC’s direct payment of
insured deposits.
Bridge Depository Institution. If the
FDIC determines that temporarily
continuing the operations of the failed
IDI is less costly than a payout
liquidation, the FDIC may organize a
BDI to purchase certain assets and
assume certain liabilities of the failed
IDI.42 Generally, a BDI would continue
42 Before a BDI may be chartered, the chartering
conditions set forth in 12 U.S.C. 1821(n)(2) must

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the failed bank’s operations according to
business plans and budgets approved by
the FDIC and carried out by FDICselected BDI leadership. In addition to
providing depositors continued access
to deposits and banking services, the
BDI would conduct any necessary
restructuring required to rationalize the
failed IDI’s operations and maximize
value to be achieved in an eventual sale.
Subject to the least-cost requirement,
the initial structure of the BDI may be
based upon an all-deposit transaction, a
transaction in which the BDI assumes
only the insured deposits, or a
transaction in which the BDI assumes
all insured deposits and a portion of the
uninsured deposits. Once a BDI is
established, the FDIC seeks to stabilize
the institution while simultaneously
planning for the eventual exit and
termination of the BDI. In exiting and
terminating a BDI, the FDIC may merge
or consolidate the BDI with another
depository institution, issue and sell a
majority of the capital stock in the BDI,
or effect the assumption of the deposits
or acquisition of the assets of the BDI.43
While utilizing a BDI can avoid the
negative effects of a payout liquidation,
such as destruction of franchise value,
many of the same factors that challenge
the feasibility of a traditional P&A
transaction also complicate planning for
the termination of a BDI through a sale
of the whole entity or its constituent
parts.
Though one commenter suggested
that the guidance should require firms
to develop resolution strategies
involving BDIs, the agencies do not
maintain an expectation that firms will
develop resolution strategies involving
BDIs. The expectations provided in this
guidance are also intended to be helpful
to firms that have chosen to involve a
BDI in their resolution strategy.
Least-Cost Analysis for Resolution
Plans. The final guidance does not
include an expectation that firms
provide in their resolution plans a
complete least-cost analysis. Such an
analysis would, for example, include a
also be satisfied. For purposes of this guidance, if
the Plan provides appropriate analysis concerning
the feasibility of the BDI strategy, there is no
expectation that the resolution plan also
demonstrate separately that the conditions for
chartering the BDI have been satisfied.
43 12 U.S.C. 1821(n)(10).

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comparison of the preferred strategy for
resolving an IDI that is a material entity
against every other possible resolution
method. While a firm may choose to
provide a complete least-cost analysis,
this guidance discusses expectations
regarding a limited least-cost analysis
that would explain how the firm’s
preferred strategy is not more costly
than a payout liquidation and, if
applicable, an insured-only BDI.
One commenter suggested that the
agencies should provide guidance for
how firms should address the valuation
of an IDI’s assets and liabilities,
including its franchise value. In this
final guidance, the agencies are
providing additional explanation for
how firms can develop and support the
valuation of the IDI’s assets and
liabilities in an IDI resolution. This
guidance includes a description of how
firms can assess the franchise value of
a firm’s business.
Example. The following example
should be read in conjunction with
section VIII of the guidance text, Insured
Depository Institution Resolution. This
example is only intended to provide
firms with an illustration of the types of
considerations and calculations that
could be included in a firm’s analysis
explaining how its preferred strategy
would be less costly than a payout
liquidation and, if applicable, an
insured-only BDI. This example is not
intended to serve as a template for firms
or to provide guidelines for reasonable
valuations of a firm’s assets or
liabilities. The valuations described in
this example are intended to be
illustrative and are not guidance about
the likely values of a firm’s assets and
liabilities in an individual resolution
plan or in resolution.
Bank A has $500 billion in total
assets, consisting of $250 billion loans;
$75 billion cash and equivalents; $125
billion in investment securities; and
other assets totaling $50 billion. The
bank’s initial funding structure consists
of $400 billion in deposits; $25 billion
in various unsecured payables and debt;
$25 billion in secured funding; and $50
billion in capital instruments. For this
example, the bank assumes it would
encounter idiosyncratic events at a time
when severely adverse economic
conditions are present, and this
combination of events would cause the

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bank to be closed by the chartering
authority and the FDIC appointed as
receiver. The illustrative tables below
reflect values as of the appointment of
the FDIC as receiver.
The initial events combine to cause
immediate losses of $25 billion
recognized as direct operating charges
and $15 billion through write-downs/
provision expense for the loan portfolio,
and $60 billion of deposit runoff occurs.
• For purposes of conducting the
analysis, the firm’s management
assumes that additional value
diminution is present in the loan
portfolio. Accordingly, after thoroughly
analyzing the quality of its loan
portfolio and determining the potential
for additional credit losses, as well as
considering the market value of the loan
portfolio based upon the type of loans
it holds in comparison with comparable
sales transactions, and after further
considering sensitivity testing,
management supports an estimate near
$175 billion for the loan portfolio.
• In developing its Resolution Plan,
the firm’s management further supports
that $40 billion of additional deposit
runoff would occur in addition to the
initial $60 billion. At the time of failure,
Bank A’s remaining $300 billion of
deposits are 60 percent insured and 40
percent uninsured. The ratio of insured
deposits to uninsured deposits is used
to calculate the pro rata recovery of
depositors and the losses imposed on
the DIF as a result.44
• The deposit runoff is assumed to be
met by using $50 billion of cash and
selling $50 billion of investment
securities. The remaining $75 billion
investment portfolio is entirely invested
in short-term U.S. Treasury securities
with an estimated value of $70 billion.
• The other assets are implicated in
the initial idiosyncratic loss. These
other assets include fixed assets,
foreclosed property, intellectual
property, and miscellaneous items with
a market value of $25 billion.
• As shown in table 1, the Plan
provides an analysis of the payout
liquidation strategy. This strategy
includes an expected loss to the DIF of
$18 billion.
44 See

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TABLE 1—ILLUSTRATION OF BANK A PAYOUT LIQUIDATION—COST ESTIMATE
[Dollars in billions]
Liquidation market value

Payout liquidation liability claim and amount recovered

Category

Value

Category

Loans .............................................................
Securities .......................................................

$175
$70

Cash ..............................................................
Other ..............................................................

$25
$25

Total .......................................................

$295

Claim

Secured Claims ............................................
Deposits Insured ...........................................

$25
$180

Recovery/(loss)
$25/($0).
$162/($18).

FDIC incurs the loss for the insured deposits so that all insured deposits are
fully repaid.
Deposits Uninsured ......................................
Unsecured Claims/Debt ................................
Equity Holders ..............................................

$120
$25
........................

$108/($12).
$0/($25).
No recovery.

Loss to Deposit Insurance Fund (to make whole insured depositors) = $18 billion.45
Losses to uninsured depositors = $12 billion.

• However, the Plan also asserts and
supports that the payout liquidation
approach fails to reflect the franchise
value of the combined deposit and loan
relationships stemming from
considerations such as the low
administrative costs associated with
servicing large deposits, the elimination
of significant customer acquisition

costs, the stable fee income stream
associated with the accounts due to
barriers to entry for certain products,
and the importance and value of
integrating the loan and deposit
products.
• The Plan calculates, and provides
the analysis supporting the calculation,
that the economic benefit of packaging

these benefits together in an all-deposit
BDI is $20 billion, which is reflected as
a bid premium to liquidation pricing in
table 2.
• The result is that the all-deposit BDI
is less costly to the DIF than liquidation
because of the inclusion of the bid
premium.

TABLE 2—ILLUSTRATION OF BANK A PREFERRED STRATEGY—COST ESTIMATE
[Dollars in billions]
All deposit bridge market value
Category

All deposit bridge bank liability claim and amount
recovered
Value

Category

Loans .............................................................
Securities .......................................................

$175
$70

Cash ..............................................................
Other ..............................................................

$25
$25

Sub Total .......................................................
Bid Premium ..................................................
Total .......................................................

$295
$20
$315

Claim

Secured Claims ............................................
Deposits Insured ...........................................

$25
$180

Recovery/(loss)
$25/($0).
$174/($6).

FDIC incurs the loss for the insured deposits so that all insured deposits are
fully repaid.
Deposits Uninsured ......................................
Unsecured Claims/Debt ................................
Equity Holders ..............................................

$120
$25
........................

$116/($4).*
$0/($25).
No recovery.

Loss to Deposit Insurance Fund (to make whole insured and uninsured depositors) = $10 billion, which is less than the payout liquidation
loss.46
* Losses to uninsured depositors total $4 billion and are absorbed by the DIF.

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I. Derivatives and Trading Activities
The agencies requested comment on
whether to provide derivatives and
trading activities guidance for specified
firms that adopt an SPOE or MPOE
resolution strategy. Some commenters
argued that no derivatives and trading
guidance is needed for domestic
triennial full filers because they have
limited derivatives and trading
portfolios, particularly relative to the
U.S. GSIB banking organizations
covered by such guidance. These
45 Calculation: (1) $295 billion asset value less
secured claim of $25 billion = $270 billion available
to depositors and junior claims; (2) $270 billion
available spread pro-rata across $300 billion
depositor class; 60 percent insured deposits and 40
percent uninsured deposits; (3) $270 billion × .6 =

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commenters also noted that not all of
these biennial filers, which are Category
I firms, are subject to this type of
guidance. Other commenters supported
providing such guidance to domestic
triennial full filers, despite observing
that these firms engage in less activity
than the biennial filers. One commenter
cautioned that derivatives activities for
domestic triennial full filers may
increase in the future and proposed the
inclusion of an orderly-wind-down
analysis for firms with net derivatives
exceeding a given threshold. Another

commenter recommended that the
guidance include expectations for: roles
and responsibilities in derivatives
unwind, plan reporting regarding
derivatives exposures, plan risk
assessments in cross-border activity,
barriers to swift unwind of derivatives
activities booked outside the United
States, and capabilities to generate
detailed derivative reports. This
commenter also argued that firms
should specify plans to wind-down
between affiliates and external

$162 billion paid to insured depositors; $270 billion
× .4 = $108 billion paid to uninsured depositors.
46 Calculation: (1) $315 billion asset value less
secured claim of $25 billion = $290 billion available
to depositors and junior claims; (2) $290 billion

available spread pro-rata across $300 billion
depositor class; 60 percent insured deposits and 40
percent uninsured deposits; (3) $290 billion × .6 =
$174 billion paid to insured depositors; $290 billion
× .4 = $116 billion paid to uninsured depositors.

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counterparties, as well as describe
potential sale of some trading positions.
After reviewing the comments and
considering the scope of derivatives and
trading activities of domestic Category I,
II, and III banking organizations,47 the
agencies determined that the banking
organizations that would be specified
firms have limited derivatives and
trading operations compared to the
subset of biennial filers that are the
subject of derivatives and trading
guidance. The agencies also note that
the Rule includes certain requirements
regarding derivatives and trading
activities with which all covered
companies—including domestic
triennial full filers—must comply, as
well as the overall requirement to
provide a strategic analysis describing
the covered company’s plan for orderly
resolution.48 The agencies believe that
for this set of covered companies, given
their current activities, the topic of
derivatives and trading activities is
sufficiently addressed by the Rule. The
agencies are therefore finalizing the
guidance without including
expectations on derivatives and trading
activity for the specified firms.
The agencies also recognize that
derivatives activity or risk for domestic
triennial full filers may change in the
future. The agencies may consider the
need for firm-specific derivatives and
trading expectations in the future for
specified firms that substantially
increase their derivatives and trading
activities or change in a way such that
having a strategy to wind-down their
derivatives portfolios is critical to their
resolvability.

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J. Format and Structure of Plans;
Assumptions
This section of the proposal described
the agencies’ preferred presentation
regarding the format, assumptions, and
structure of resolution plans. Under the
proposal, plans would have been
expected to contain an executive
summary, a narrative of the firm’s
resolution strategy, relevant technical
appendices, and a public section as
detailed in the Rule. The proposed
format, structure, and assumptions were
generally similar to those in the 2019
U.S. GSIB Guidance, except that the
47 See FR Y–15 Systemic Risk Report, 2nd quarter
2023 data. Publicly available at the National
Information Center, https://www.ffiec.gov/NPW. See
also Quarterly Report on Bank Trading and
Derivatives Activities—Third Quarter 2023.
Publicly available at https://www.occ.gov/
publications-and-resources/publications/quarterlyreport-on-bank-trading-and-derivatives-activities/
index-quarterly-report-on-bank-trading-andderivatives-activities.html.
48 See 12 CFR 243.2 and 381.2; 12 CFR 243.5(c)
and (e)(6)–(7), and 381.5(c) and (e)(6)–(7).

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proposed guidance reflected the
expectations that (a) a firm should
support any assumptions that it will
have access to the Discount Window
and/or other borrowings during the
period immediately prior to entering
bankruptcy and clarified expectations
around such assumptions, and (b) a firm
should not assume the use of the
systemic risk exception to the least-cost
test in the event of a failure of an IDI
requiring resolution under the FDI Act.
In addition, for firms that adopt an
MPOE resolution strategy, the proposal
included the expectation that a plan
should demonstrate and describe how
the failure event(s) results in material
financial distress, including
consideration of the likelihood of the
diminution the firm’s liquidity and
capital levels prior to bankruptcy. The
proposal also included several questions
about assumptions and whether to
include answers to frequently asked
questions.
The agencies received one comment
in response to a question posed
regarding assumptions related to
lending facilities, including the
Discount Window. The commenter
supported the proposed assumptions
guidance regarding these facilities and
recommended that the agencies
consider providing additional guidance
on assumptions related to the amount,
timing, and limitations of liquidity that
might become available from these
sources. However, the additional
guidance requested by the commenter is
unnecessary, and the agencies are
finalizing this section of the guidance as
proposed with one clarification.
Specifically, the proposed guidance
regarding the relevant assumptions
already includes references to timing
and limitations of liquidity
commensurate with the activities of
firms subject to the guidance.
As a clarification, the agencies have
added a reference to Federal Home Loan
Banks (FHLBs) as a type of borrowing
for which firms should provide support
in their resolution plans if they assume
access during the period immediately
prior to entering bankruptcy. The
agencies’ experiences in 2023 showed
that many IDIs depend heavily on FHLB
funding in times of stress and,
accordingly, the agencies expect firms to
be prepared to support any assumptions
around such reliance for resolution
planning purposes.
The final guidance also includes an
expectation contained in the 2019 U.S.
GSIB Guidance and the 2020 FBO
Guidance regarding the parameters of
economic forecasting in a resolution
plan submission. Those guidance
documents stated that a resolution plan

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should assume the Dodd-Frank Act
Stress Test (DFAST) severely adverse
scenario for the first quarter of the
calendar year in which a resolution plan
is submitted is the domestic and
international economic environment at
the time of the firm’s failure and
throughout the resolution process.49
While this assumption is similar to a
provision in the Rule,50 the agencies
believe it is important to provide
guidance to firms about the timing of
the required assumption in the Rule.
The Board provides DFAST scenario
information to the specified firms
through the Board’s public website.51
The agencies also received a comment
recommending that more of firms’
resolution plans be disclosed publicly to
promote market discipline and
specifically asking that the public
portion of resolution plans describe
potential acquirers of operations in the
event of resolution. The Rule establishes
at a high-level the required content of
the public section of a resolution plan,52
and this final guidance clarifies the
agencies’ expectations with respect to
that section. The agencies are mindful
that the public disclosure of resolution
plans, which may contain private
commercial information, has both
benefits and drawbacks, and the
agencies believe that, at the moment, the
Rule—revisions to which are outside the
scope of this guidance—and the final
guidance appropriately balance
transparency with confidentiality.
The agencies are otherwise finalizing
this section of the guidance as
proposed.53 The agencies did not
receive any comments in response to the
proposal’s request for comments about
answers to frequently asked questions,
and the agencies have not included
those prior answers to frequently asked
questions because these prior answers
were requested by and prepared for a
different set of firms.
K. Additional Comments
Differentiating Resolution Plan
Guidance
The agencies received several general
comments about whether the
expectations in the proposal were
suitably modified from expectations
49 2019 U.S. GSIB Guidance at 84 FR 1459; 2020
FBO Guidance at 85 FR 83578.
50 12 CFR 243.4(h)(1) and 381.4(h)(1).
51 https://www.federalreserve.gov/publications/
dodd-frank-act-stress-test-publications.htm.
52 12 CFR 243.11(c) and 381.11(c).
53 The agencies also are clarifying one expectation
in the Financial Statements and Projections
subsection of the Format and Structure of Plans;
Assumptions section of the guidance that could be
construed to impose a requirement on the specified
firms.

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included in past resolution plan
guidance and whether the proposal
appropriately distinguished between
different types of triennial full filers.
Several commenters contended that the
proposed guidance did not sufficiently
differentiate expectations among firms
subject to resolution planning guidance.
One commenter argued that section 165
of the Dodd-Frank Act requires the
agencies to differentiate the content of
the resolution planning guidance; the
proposal was too similar to the 2019
U.S. GSIB Guidance; and expectations
for the specified firms should be further
differentiated based on size, risk, and
other factors. Another commenter
argued that the proposed guidance
favors the MPOE resolution strategy by
including fewer expectations for firms
that adopt that strategy and
recommended that final guidance for
firms adopting an MPOE resolution
strategy should be more aligned with
guidance for resolution plan filers with
an SPOE resolution strategy.
While the differentiation requirement
in section 165 of the Dodd-Frank Act
does not apply to this non-binding
resolution plan guidance, the guidance
differentiates among covered
companies, taking into consideration
their size, complexity, and other riskrelated factors; their resolution strategy,
whether SPOE or MPOE; and whether
they are domestic or foreign-based.
The thresholds and risk-based
indicators that form the basis of the riskbased category framework used by the
Rule are designed to take into account
an individual firm’s particular activities
and organizational footprint that may
present significant challenges to an
orderly resolution.54 The Rule, using
those categories, defines triennial full
filers as one cohort because the failure
of a Category II or III banking
organization could pose a threat to U.S.
financial stability. Banking
organizations in these two categories
often have similar characteristics, such
as organizational structures, and similar
resolution strategies that benefit from
similar resolution guidance.
Accordingly, the agencies believe the
guidance is equally appropriate for
domestic Category II and III banking
organizations. In addition, as discussed
above, the regional bank failures in
March 2023 demonstrated that the
failure of banking organizations with
$100 billion to $250 billion in total
consolidated assets can be disruptive to
U.S. financial stability. For these
reasons, providing the guidance to
domestic triennial full filers in that asset
54 See 2019 Federal Register Rule Publication at
84 FR 59197–201.

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range is appropriate to prevent or
mitigate risks to the financial stability of
the United States.
Guidance for specified firms that
adopt an SPOE resolution strategy is
differentiated relative to guidance for
Category I banking organizations (i.e.,
the 2019 U.S. GSIB Guidance), notably
with the absence of derivatives and
trading expectations, which are
applicable to most of the U.S. GSIBs,
and other operational guidance as well
as reduced separability expectations.
Other aspects of the SPOE guidance are
appropriately similar to the 2019 U.S.
GSIB Guidance because the successful
execution of an SPOE resolution
strategy benefits from the capabilities
discussed in the guidance. The guidance
for firms that adopt an MPOE resolution
strategy includes substantially simpler
expectations, relative to SPOE guidance
and the 2019 U.S. GSIB Guidance, in the
areas of capital, liquidity, governance
mechanisms, operational, legal entity
rationalization and separability,
derivatives and trading expectations,
and PCS. Having simpler expectations
relative to SPOE guidance does not
necessarily mean a firm adopting an
MPOE strategy will encounter fewer
challenges developing its resolution
plan; regardless of the strategy chosen,
the firm is responsible for providing
adequate information and analysis to
demonstrate its plan will facilitate an
orderly resolution. Each firm remains
free to choose the resolution strategy it
believes would most effectively
facilitate an orderly resolution, and the
agencies are not suggesting that any firm
change its resolution strategy, nor do the
agencies identify a preferred strategy for
a specific firm or set of firms.55
Finally, resolution plan guidance for
Category II and III banking organizations
is adapted to whether a covered
company is based in the United States
or in a foreign jurisdiction, with
dedicated guidance documents for each
type of firm. The Rule differentiates
between banking organizations based on
home jurisdiction,56 and whether a
banking organization is based in the
United States can significantly impact
its resolution strategy, resolution
capabilities, and resolution planning.
Accordingly, expectations for domestic
and foreign-based triennial full filers are
differentiated in the areas of capital,
liquidity, governance mechanisms,
55 See infra section I.A, Resolution Plan Strategy,
of this document for further discussion about why
the agencies are differentiating expectations
depending on whether a firm adopts an SPOE or
MPOE resolution strategy.
56 See 12 CFR 243.5(a) and 381.5(a).

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shared services, separability, branches,
and group-wide resolution plans.
Comments About Resolution Planning
and the Proposal
The agencies received several general
comments about resolution planning
guidance. The agencies have considered
these commenters’ input but have made
no modifications to the final guidance.
One commenter expressed support for
the proposed guidance, in part, because
it reaffirms that bankruptcy is the
preferred resolution strategy and would
improve the quality of resolution plan
submissions through enhanced
information and assumptions, better
enabling the resolution of a specified
firm in an orderly manner. Another
commenter praised the agencies’
proposal for providing needed clarity
and transparency on expectations for
specified firms’ resolution plans, and for
making several improvements that will
improve specified firms’ resolution
plans.
Another commenter recommended
that the agencies adopt the content of
the guidance in the form of a legally
binding and enforceable rule, in part
due to the size and scope of specified
firms, the importance of resolution
planning, and the financial stability
implications involved. This commenter
also suggested that the large bank
failures in 2023 demonstrated the need
for improvement in banking
organizations’ resolution planning and
the agencies’ process for assessing these
plans.
Resolution planning is important to
U.S. financial stability; however, the
agencies have not made changes to the
guidance in response to these
comments. The Rule, which is legally
enforceable, identifies the specific
topics that must be addressed in
resolution plans. In contrast, resolution
plan guidance outlines the agencies’
supervisory expectations and priorities
and articulates the agencies’ general
views regarding appropriate resolution
planning practices for the specified
firms. The final guidance provides
examples of resolution plan content and
capabilities that the agencies generally
consider consistent with effective
resolution planning. This approach is
consistent with resolution planning
guidance provided to other covered
companies in the past, including
guidance for Category I banking
organizations and certain foreign
Category II banking organizations.
A commenter argued that the agencies
should allow for an iterative process for
domestic triennial full filers to develop
their strategies and capabilities, similar
to the gradual maturation of Category I

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banking organizations’ resolution plans.
This commenter also argued the
agencies should provide more than one
year for firms to incorporate the final
guidance into their next resolution plan
submissions and that the guidance
should not be the basis for a deficiency.
By statute and under the Rule, each
resolution plan filer must submit a plan
for orderly resolution under the
Bankruptcy Code, and the agencies must
assess the credibility of each plan. Each
firm remains free to choose the
resolution strategy it believes would
most effectively facilitate an orderly
resolution and the agencies are not
suggesting that any firm change its
resolution strategy, nor do the agencies
identify a preferred strategy for a
specific firm or set of firms. The
standard of review for a resolution plan
submission of a firm that transitions to
a new strategy is the same as for any
firm subject to the Rule. The agencies
stated in the preamble to the 2019
revisions to the Rule that they would
endeavor to finalize guidance a year in
advance of the next applicable
resolution plan submission date, and
the agencies are extending the next
resolution plan submission deadline for
these firms to provide at least one year
advanced notice of general guidance.57
The agencies also reaffirm that the
guidance does not have the force and
effect of law, and the agencies do not
take enforcement actions or issue
findings based on resolution planning
guidance.
Comments Outside the Scope of
Proposal
The agencies received several
comments outside the scope of the
proposed guidance. One commenter
urged the agencies to shorten the length
between resolution plan submissions
under the Rule, from three to two years,
and evaluate key aspects of plans
annually. This commenter also
recommended the agencies create an
independent committee to advise the
agencies on resolution planning matters
as well as require large banking
organizations to hold more capital
generally. Another commenter argued
that any LTD requirements should
reflect a banking organization’s
preferred resolution strategy and not
push a banking organization to adopt a
particular strategy while another
commenter recommended finalizing the
LTD proposal as proposed. A
commenter also encouraged the FDIC to
provide banking organizations at least
one year to comply with any final IDI
57 See 2019 Federal Register Publication at 84 FR
59204.

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Rule. Another commenter also
recommended that the agencies promote
resolvability by requiring large
corporations to hold term deposits at the
specified firms. In addition, another
commenter suggested including in the
final guidance expectations related to
green financing. The agencies have not
made any changes to the guidance to
address these comments.
IV. Paperwork Reduction Act
Certain provisions of the final
guidance contain ‘‘collections of
information’’ within the meaning of the
Paperwork Reduction Act (PRA) of 1995
(44 U.S.C. 3501–3521). In accordance
with the requirements of the PRA, the
agencies may not conduct or sponsor,
and the respondent is not required to
respond to, an information collection
unless it displays a currently valid
Office of Management and Budget
(OMB) control number. The agencies
have requested and OMB has assigned
to the agencies the respective control
numbers shown. The information
collections contained in the final
guidance have been submitted to OMB
for review and approval by the FDIC
under section 3507(d) of the PRA (44
U.S.C. 3507(d)) and section 1320.11 of
OMB’s implementing regulations (5 CFR
part 1320). The Board reviewed the final
guidance under the authority delegated
to the Board by OMB and has approved
these collections of information.
The agencies did not receive any
comments related to the PRA.
The agencies have a continuing
interest in the public’s opinions of
information collections. At any time,
commenters may submit comments
regarding the burden estimate, or any
other aspect of this collection of
information, including suggestions for
reducing the burden, to the addresses
listed in the ADDRESSES caption in the
proposed guidance notice. All
comments will become a matter of
public record. Written comments and
recommendations for these information
collections also should be sent within
30 days of publication of this document
to www.reginfo.gov/public/do/
PRAMain. Find this particular
information collection by selecting
‘‘Currently under 30-day Review—Open
for Public Comments’’ or by using the
search function.
Collection title: Board: Reporting
Requirements Associated with
Regulation QQ.
FDIC: Reporting Requirements
Associated with Resolution Planning.
OMB control number: Board 7100–
0346; FDIC 3064–0210.
Frequency: Triennial, Biennial, and
on occasion.

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Respondents: Bank holding
companies (including any foreign bank
or company that is, or is treated as, a
bank holding company under section
8(a) of the International Banking Act of
1978 and meets the relevant total
consolidated assets threshold) with total
consolidated assets of $250 billion or
more, a bank holding companies with
$100 billion or more in total
consolidated assets with certain
characteristics, and nonbank financial
firms designated by the Financial
Stability Oversight Council for
supervision by the Board.
Current actions: The final guidance
modifies certain provisions of the
proposed guidance. For domestic firms,
the final guidance eliminates
expectations related to separability,
reducing the average burden hours per
response by 3,000 for domestic firms
using an SPOE strategy and 975 for
domestic firms using an MPOE strategy.
The final guidance also clarifies
expectations around operational shared
services for firms using an SPOE
resolution strategy and around the IDI
Resolution Plan/Least Cost Test for all
firms. Regarding operational shared
services, the guidance clarifies that a
firm’s implementation plan to ensure
continuity of shared services should
include those that are material to the
execution of the resolution strategy,
such as reliance on outside bankruptcy
counsel and consultants. Regarding the
FDI Act’s least-cost requirement and
how it relates to expectations around IDI
resolution, the agencies provided
additional detail on how firms can
develop and support the valuation of an
IDI’s assets and liabilities in an IDI
resolution. The agencies do not
anticipate these clarifications impacting
the burden estimates.
Historically, the Board and the FDIC
have split the respondents for purposes
of PRA clearances. As such, the agencies
will split the change in burden as well.
As a result of this split and the final
revisions, there is a proposed net
increase in the overall estimated burden
hours of 14,922 hours for the Board and
14,304 hours for the FDIC. Therefore,
the total Board estimated burden for its
entire information collection would be
216,129 hours and the total FDIC
estimated burden would be 210,844
hours.
The following table presents only the
change in the estimated burden hours,
as amended by the final guidance,
broken out by agency. The table does
not include a discussion of the
remaining estimated burden hours,

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which remain unchanged.58 As shown
in the table, the triennial full filers’
resolution plan submissions would be

estimated more granularly according to
SPOE and MPOE resolution strategies.

Estimated
number of
respondents

FR QQ

Estimated
average
hours per
response

Estimated
annual
frequency

Estimated
annual
burden hours

Board Burdens
Current
Triennial Full:
Complex Foreign ...............................................................................
Foreign and Domestic .......................................................................

1
7

1
1

9,777
4,667

9,777
32,669

Current Total ..............................................................................
Final
Triennial Full:
FBO SPOE * ......................................................................................
FBO MPOE .......................................................................................
Domestic MPOE ................................................................................

........................

........................

........................

42,446

2
3
3

1
1
1

11,848
5,939
5,285

23,696
17,817
15,855

Final Total ..................................................................................

........................

........................

........................

57,368

1
6

1
1

9,777
4,667

9,777
28,002

Current Total ..............................................................................
Final
Triennial Full:
FBO SPOE ........................................................................................
FBO MPOE .......................................................................................
Domestic MPOE ................................................................................

........................

........................

........................

37,779

2
3
2

1
1
1

11,848
5,939
5,285

23,696
17,817
10,570

Final Total ..................................................................................

........................

........................

........................

52,083

FDIC Burdens
Current
Triennial Full:
Complex Foreign ...............................................................................
Foreign and Domestic .......................................................................

* There are currently no domestic triennial full filers utilizing an SPOE strategy. Estimated hours per response for a domestic SPOE triennial
full filer would be 10,535 hours.

V. Text of the Final Guidance
Guidance for Resolution Plan
Submissions of Domestic Triennial Full
Filers
I. Introduction

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Section 165(d) of the Dodd-Frank
Wall Street Reform and Consumer
Protection Act (12 U.S.C. 5365(d))
requires certain financial companies to
report periodically to the Board of
Governors of the Federal Reserve
System (the Board) and the Federal
Deposit Insurance Corporation (the
FDIC) (together, the agencies) their
plans for rapid and orderly resolution in
the event of material financial distress
or failure. On November 1, 2011, the
agencies promulgated a joint rule
58 In addition to the revisions to the estimations
for triennial full filers, the agencies have revised the
estimation for biennial filers from 40,115 hours per
response to 39,550 hours per response to align with
burden estimation methodology with what was
used for triennial full filers under the final
guidance. Specifically, the agencies removed a
component for a biennial filer’s analysis of its
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implementing the provisions of Section
165(d).1 Subsequently, in November
2019, the agencies finalized
amendments to the joint rule addressing
amendments to the Dodd-Frank Act
made by the Economic Growth,
Regulatory Relief, and Consumer
Protection Act and improving certain
aspects of the joint rule based on the
agencies’ experience implementing the
joint rule since its adoption.2 Financial
companies meeting criteria set out in
the Rule must file a resolution plan
(Plan) according to the schedule
specified in the Rule.
This document is intended to provide
guidance to certain domestic financial
companies required to submit Plans to
assist their further development of a
Plan for their 2025 and subsequent Plan

submissions. Specifically, the guidance
applies to any domestic covered
company that is a triennial full filer
under the Rule 3 because it is subject to
Category II or III standards in
accordance with the Board’s tailoring
rule (specified firms or firms).4 The Plan
for a specified firm would address the
subsidiaries and operations that are
domiciled in the United States as well
as the foreign subsidiaries, offices, and
operations of the covered company.
The document does not have the force
and effect of law.5 Rather, it describes
the agencies’ expectations and priorities
regarding the specified firms’ Plans and
the agencies’ general views regarding
specific areas where additional detail
should be provided and where certain
capabilities or optionality should be

targeted and full resolution plans, because this
critical operations analysis is integrated in the
preparation of such plans.
1 Resolution Plans Required, 76 FR 67323 (Nov.
1, 2011).
2 Resolution Plans Required, 84 FR 59194 (Nov.
1, 2019). The amendments became effective
December 31, 2019. The ‘‘Rule’’ means the joint rule

as amended in 2019. Terms not defined herein have
the meanings set forth in the Rule.
3 See 12 CFR 243.4(b)(1) and 381.4(b)(1).
4 Prudential Standards for Large Bank Holding
Companies, Savings and Loan Holding Companies,
and Foreign Banking Organizations, 84 FR 59032
(Nov. 1, 2019).
5 See 12 CFR 262.7 and appendix A to 12 CFR
part 262; 12 CFR part 302.

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developed and maintained to
demonstrate that each firm has
considered fully, and is able to mitigate,
obstacles to the successful
implementation of their resolution
strategy.
When a domestic banking
organization first becomes a specified
firm,6 this document will apply to the
firm’s next resolution plan submission
that is due at least 12 months after the
date the firm becomes a specified firm.
If a specified firm ceases to be subject
to Category II or III standards, it will no
longer be a specified firm, and this
document would no longer apply to that
firm.
In general, this document is organized
around a number of key challenges in
resolution (capital; liquidity;
governance mechanisms; operational;
legal entity rationalization; and insured
depository institution resolution (IDI), if
applicable) that apply across resolution
plans, depending on their strategy.
Additional challenges or obstacles may
arise based on a firm’s particular
structure, operations, or resolution
strategy. Each firm is expected to
satisfactorily address these
vulnerabilities in its Plan. In addition,
each topic of this guidance is separated
into expectations for a specified firm
that adopts a single point of entry
(SPOE) resolution strategy for its Plan
and expectations for a specified firm
that adopts a multiple point of entry
(MPOE) resolution strategy for its Plan.
Under the Rule, the agencies will
review a Plan to determine if it
satisfactorily addresses key potential
challenges, including those specified
below. If the agencies jointly decide that
an aspect of a Plan presents a weakness
that individually or in conjunction with
other aspects could undermine the
feasibility of the Plan, the agencies may
determine jointly that the Plan is not
credible or would not facilitate an
orderly resolution under the U.S.
Bankruptcy Code. The agencies may not
take enforcement actions or issue
findings based on this guidance.

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II. Capital
SPOE
The firm should have the capital
capabilities necessary to execute its
resolution strategy, including the
modeling and estimation process
described below.
Resolution Capital Adequacy and
Positioning (RCAP). In order to help
ensure that a firm’s material entities 7
6 See

12 CFR 252.5(c)–(d).
terms ‘‘material entities,’’ ‘‘identified
critical operations,’’ and ‘‘core business lines’’ have
the same meaning as in the Rule.
7 The

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could operate while the parent company
is in bankruptcy, the firm should have
an adequate amount of loss-absorbing
capacity to recapitalize those material
entities. Thus, a firm should have
outstanding a minimum amount of lossabsorbing capacity, including long-term
debt, to help ensure that the firm has
adequate capacity to meet that need at
a consolidated level (external LAC). 8
A firm’s external LAC should be
complemented by appropriate
positioning of loss-absorbing capacity
within the firm (i.e., internal LAC),
consistent with any applicable rules
requiring prepositioned resources at
IDIs in the form of long-term debt. After
adhering to any requirements related to
prepositioning long-term debt at IDIs,
the positioning of a firm’s remaining
resources should balance the certainty
associated with pre-positioning
resources directly at material entities
with the flexibility provided by holding
recapitalization resources at the parent
(contributable resources) to meet
unanticipated losses at material entities.
That balance should take account of
both pre-positioning at material entities
and holding resources at the parent, and
the obstacles associated with each. With
respect to material entities that are not
U.S. IDIs subject to pre-positioned longterm debt requirements, the firm should
not rely exclusively on either full prepositioning or parent contributable
resources to recapitalize such entities.
The Plan should describe the
positioning of resources within the firm,
along with analysis supporting such
positioning.
Finally, to the extent that prepositioned resources at a material entity
are in the form of intercompany debt
and there are one or more entities
between that material entity and the
parent, the firm should structure the
instruments so as to ensure that the
material entity can be recapitalized.
Resolution Capital Execution Need
(RCEN). To the extent necessitated by
the firm’s resolution strategy, material
entities need to be recapitalized to a
level that allows them to operate or be
wound down in an orderly manner
following the parent company’s
bankruptcy filing. The firm should have
a methodology for periodically
estimating the amount of capital that
8 Total Loss-Absorbing Capacity, Long-Term Debt,
and Clean Holding Company Requirements for
Systemically Important U.S. Bank Holding
Companies and Intermediate Holding Companies of
Systemically Important Foreign Banking
Organizations, 82 FR 8266 (Jan. 24, 2017); LongTerm Debt Requirements for Large Bank Holding
Companies, Certain Intermediate Holding
Companies of Foreign Banking Organizations, and
Large Insured Depository Institutions, 88 FR 64524
(Sept. 19, 2023).

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may be needed to support each material
entity after the bankruptcy filing
(RCEN). The firm’s positioning of
resources should be able to support the
RCEN estimates. In addition, the RCEN
estimates should be incorporated into
the firm’s governance framework to
ensure that the parent company files for
bankruptcy at a time that enables
execution of the preferred strategy.
The firm’s RCEN methodology should
use conservative forecasts for losses and
risk-weighted assets and incorporate
estimates of potential additional capital
needs through the resolution period,9
consistent with the firm’s resolution
strategy. The RCEN methodology should
be calibrated such that recapitalized
material entities will have sufficient
capital to maintain market confidence as
required under the preferred resolution
strategy. Capital levels should meet or
exceed all applicable regulatory capital
requirements for ‘‘well-capitalized’’
status and meet estimated additional
capital needs throughout resolution.
Material entities that are not subject to
capital requirements may be considered
sufficiently recapitalized when they
have achieved capital levels typically
required to obtain an investment-grade
credit rating or, if the entity is not rated,
an equivalent level of financial
soundness. Finally, the methodology
should be independently reviewed,
consistent with the firm’s corporate
governance processes and controls for
the use of models and methodologies.
MPOE
N/A.
III. Liquidity
SPOE
The firm should have the liquidity
capabilities necessary to execute its
preferred resolution strategy. For
resolution purposes, these capabilities
should include having an appropriate
model and process for estimating and
maintaining sufficient liquidity at or
readily available to material entities and
a methodology for estimating the
liquidity needed to successfully execute
the resolution strategy, as described
below.
Resolution Liquidity Adequacy and
Positioning (RLAP). With respect to
RLAP, the firm should be able to
measure the stand-alone liquidity
position of each material entity
(including material entities that are nonU.S. branches)—i.e., the high-quality
liquid assets (HQLA) at the material
9 The resolution period begins immediately after
the parent company bankruptcy filing and extends
through the completion of the preferred resolution
strategy.

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entity less net outflows to third parties
and affiliates—and ensure that liquidity
is readily available to meet any deficits.
The RLAP model should cover a period
of at least 30 days and reflect the
idiosyncratic liquidity profile and risk
of the firm. The model should balance
the reduction in frictions associated
with holding liquidity directly at
material entities with the flexibility
provided by holding HQLA at the parent
available to meet unanticipated
outflows at material entities. Thus, the
firm should not rely exclusively on
either full pre-positioning or an
expected contribution of liquid
resources from the parent. The model 10
should ensure that the parent holding
company holds sufficient HQLA
(inclusive of its deposits at the U.S.
branch of the lead bank subsidiary) to
cover the sum of all stand-alone
material entity net liquidity deficits.
The stand-alone net liquidity position of
each material entity (HQLA less net
outflows) should be measured using the
firm’s internal liquidity stress test
assumptions and should treat interaffiliate exposures in the same manner
as third-party exposures. For example,
an overnight unsecured exposure to an
affiliate should be assumed to mature.
Finally, the firm should not assume that
a net liquidity surplus at one material
entity could be moved to meet net
liquidity deficits at other material
entities or to augment parent resources.
Additionally, the RLAP methodology
should take into account: (A) the daily
contractual mismatches between
inflows and outflows; (B) the daily
flows from movement of cash and
collateral for all inter-affiliate
transactions; and (C) the daily stressed
liquidity flows and trapped liquidity as
a result of actions taken by clients,
counterparties, key financial market
utilities (FMUs), and foreign
supervisors, among others.
Resolution Liquidity Execution Need
(RLEN). The firm should have a
methodology for estimating the liquidity
needed after the parent’s bankruptcy
filing to stabilize the surviving material
entities and to allow those entities to
operate post-filing. The RLEN estimate
should be incorporated into the firm’s
governance framework to ensure that
the firm files for bankruptcy in a timely
way, i.e., prior to the firm’s HQLA
falling below the RLEN estimate.
The firm’s RLEN methodology should:
10 ‘‘Model’’ refers to the set of calculations
estimating the net liquidity surplus/deficit at each
legal entity and for the firm in aggregate based on
assumptions regarding available liquidity, e.g.,
HQLA and third-party and interaffiliate net
outflows.

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(A) Estimate the minimum operating
liquidity (MOL) needed at each material
entity to ensure those entities could
continue to operate post-parent’s
bankruptcy filing and/or to support a
wind-down strategy;
(B) Provide daily cash flow forecasts
by material entity to support estimation
of peak funding needs to stabilize each
entity under resolution;
(C) Provide a comprehensive breakout
of all inter-affiliate transactions and
arrangements that could impact the
MOL or peak funding needs estimates;
and
(D) Estimate the minimum amount of
liquidity required at each material entity
to meet the MOL and peak needs noted
above, which would inform the firm’s
board(s) of directors of when they need
to take resolution-related actions.
The MOL estimates should capture
material entities’ intraday liquidity
requirements, operating expenses,
working capital needs, and inter-affiliate
funding frictions to ensure that material
entities could operate without
disruption during the resolution. The
peak funding needs estimates should be
projected for each material entity and
cover the length of time the firm expects
it would take to stabilize that material
entity. Inter-affiliate funding frictions
should be taken into account in the
estimation process.
The firm’s forecasts of MOL and peak
funding needs should ensure that
material entities could operate through
resolution consistent with regulatory
requirements, market expectations, and
the firm’s post-failure strategy. These
forecasts should inform the RLEN
estimate, i.e., the minimum amount of
HQLA required to facilitate the
execution of the firm’s strategy. The
RLEN estimate should be tied to the
firm’s governance mechanisms and be
incorporated into the playbooks as
discussed below to assist the board of
directors in taking timely resolutionrelated actions.
MPOE
The firm should have the liquidity
capabilities necessary to execute its
preferred resolution strategy. A Plan
with an MPOE resolution strategy
should include analysis and projections
of a range of liquidity needs during
resolution, including intraday; reflect
likely failure and resolution scenarios;
and consider the guidance on
assumptions provided in Section VIII,
Format and Structure of Plans;
Assumptions.

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IV. Governance Mechanisms
SPOE
Playbooks and Triggers. A firm
should identify the governance
mechanisms that would ensure
execution of required board actions at
the appropriate time (as anticipated
under the firm’s preferred strategy) and
include pre-action triggers and existing
agreements for such actions.
Governance playbooks should detail the
board and senior management actions
necessary to facilitate the firm’s
preferred strategy and to mitigate
vulnerabilities, and should incorporate
the triggers identified below. The
governance playbooks should also
include a discussion of:
(A) The firm’s proposed
communications strategy, both internal
and external; 11
(B) The boards of directors’ fiduciary
responsibilities and how planned
actions would be consistent with such
responsibilities applicable at the time
actions are expected to be taken;
(C) Potential conflicts of interest,
including interlocking boards of
directors; and
(D) Any employee retention policy.
All responsible parties and timeframes
for action should be identified.
Governance playbooks should be
updated periodically for all entities
whose boards of directors would need to
act in advance of the commencement of
resolution proceedings under the firm’s
preferred strategy.
The firm should demonstrate that key
actions will be taken at the appropriate
time in order to mitigate financial,
operational, legal, and regulatory
vulnerabilities. To ensure that these
actions will occur, the firm should
establish clearly identified triggers
linked to specific actions for:
(A) The escalation of information to
senior management and the board(s) to
potentially take the corresponding
actions at each stage of distress leading
eventually to the decision to file for
bankruptcy;
(B) Successful recapitalization of
subsidiaries prior to the parent’s filing
for bankruptcy and funding of such
entities during the parent company’s
bankruptcy to the extent the preferred
strategy relies on such actions or
support; and
11 External communications include those with
U.S. and foreign authorities and other external
stakeholders, such as large depositors and
shareholders.

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(C) The timely execution of a
bankruptcy filing and related pre-filing
actions.12
These triggers should be based, at a
minimum, on capital, liquidity, and
market metrics, and should incorporate
the firm’s methodologies for forecasting
the liquidity and capital needed to
operate as required by the preferred
strategy following a parent company’s
bankruptcy filing. Additionally, the
triggers and related actions should be
specific.
Triggers linked to firm actions as
contemplated by the firm’s preferred
strategy should identify when and
under what conditions the firm,
including the parent company and its
material entities, would transition from
business-as-usual (BAU) conditions to a
stress period and from a stress period to
the recapitalization/resolution periods.
Corresponding escalation procedures,
actions, and timeframes should be
constructed so that breach of the triggers
will allow prerequisite actions to be
completed. For example, breach of the
triggers needs to occur early enough to
ensure that resources are available and
can be downstreamed, if anticipated by
the firm’s strategy, and with adequate
time for the preparation of the
bankruptcy petition and first-day
motions, necessary stakeholder
communications, and requisite board
actions. Triggers identifying the onset of
stress and recapitalization/resolution
periods, and the associated escalation
procedures and actions, should be
discussed directly in the governance
playbooks.
Pre-Bankruptcy Parent Support. The
Plan should include a detailed legal
analysis of the potential state law and
bankruptcy law challenges and
mitigants to planned provision of
capital and liquidity to the subsidiaries
prior to the parent’s bankruptcy filing
(Support). Specifically, the analysis
should identify potential legal obstacles
and explain how the firm would seek to
ensure that Support would be provided
as planned. Legal obstacles include
claims of fraudulent transfer,
preference, breach of fiduciary duty,
and any other applicable legal theory
identified by the firm. The analysis also
should include related claims that may
prevent or delay an effective
recapitalization, such as equitable
claims to enjoin the transfer (e.g.,
imposition of a constructive trust by the
court). The analysis should apply the
actions contemplated in the Plan
regarding each element of the claim, the

anticipated timing for commencement
and resolution of the claims, and the
extent to which adjudication of such
claim could affect execution of the
firm’s preferred resolution strategy.
The analysis should include mitigants
to the potential challenges to the
planned Support. The Plan should
identify the mitigant(s) to such
challenges that the firm considers most
effective. In identifying appropriate
mitigants, the firm should consider the
effectiveness of a contractually binding
mechanism (CBM), pre-positioning of
financial resources in material entities,
and the creation of an intermediate
holding company. Moreover, if the Plan
includes a CBM, the firm should
consider whether it is appropriate that
the CBM should have the following:
(A) Clearly defined triggers;
(B) Triggers that are synchronized to
the firm’s liquidity and capital
methodologies;
(C) Perfected security interests in
specified collateral sufficient to fully
secure all Support obligations on a
continuous basis (including
mechanisms for adjusting the amount of
collateral as the value of obligations
under the agreement or collateral assets
fluctuates); and
(D) Liquidated damages provisions or
other features designed to make the
CBM more enforceable.
The firm also should consider related
actions or agreements that may enhance
the effectiveness of a CBM. A copy of
any agreement and documents
referenced therein (e.g., evidence of
security interest perfection) should be
included in the Plan.
The governance playbooks included
in the Plan should incorporate any
developments from the firm’s analysis
of potential legal challenges regarding
the Support, including any Support
approach(es) the firm has implemented.
If the firm analyzed and addressed an
issue noted in this section in a prior
plan submission, the Plan may
reproduce that analysis and arguments
and should build upon it to at least the
extent described above, including
ensuring that, as with all other aspects
of the Plan, it remains accurate and up
to date. In preparing the analysis of
these issues, firms may consult with law
firms and other experts on these
matters. The agencies do not object to
appropriate collaboration between
firms, including through trade
organizations and with the academic
community, to develop analysis of
common legal challenges and available
mitigants.

12 Key pre-filing actions include the preparation
of any emergency motion required to be decided on
the first day of the firm’s bankruptcy.

MPOE
N/A.

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V. Operational
SPOE
Payment, Clearing, and Settlement
Activities Framework. Maintaining
continuity of payment, clearing, and
settlement (PCS) services is critical for
the orderly resolution of firms that are
either users or providers,13 or both, of
PCS services. A firm should
demonstrate capabilities for continued
access to PCS services essential to an
orderly resolution through a framework
to support such access by:
• Identifying clients,14 FMUs, and
agent banks as key from the firm’s
perspective for the firm’s material
entities, identified critical operations,
and core business lines, using both
quantitative (volume and value) 15 and
qualitative criteria;
• Mapping material entities,
identified critical operations, core
business lines, and key clients to both
key FMUs and key agent banks; and
• Developing a playbook for each key
FMU and key agent bank essential to an
orderly resolution under its preferred
resolution strategy that reflects the
firm’s role(s) as a user and/or provider
of PCS services.
The framework should address direct
relationships (e.g., a firm’s direct
membership in an FMU, a firm’s
provision of clients with PCS services
through its own operations, or a firm’s
contractual relationship with an agent
bank) and indirect relationships (e.g., a
firm’s provision of clients with access to
the relevant FMU or agent bank through
the firm’s membership in or relationship
with that FMU or agent bank).
Playbooks for Continued Access to
PCS Services. The firm is expected to
provide a playbook for each key FMU
and key agent bank that addresses
13 A firm is a user of PCS services if it accesses
PCS services through an agent bank or it uses the
services of a financial market utility (FMU) through
its membership in that FMU or through an agent
bank. A firm is a provider of PCS services if it
provides PCS services to clients as an agent bank
or it provides clients with access to an FMU or
agent bank through the firm’s membership in or
relationship with that service provider. A firm is
also a provider if it provides clients with PCS
services through the firm’s own operations (e.g.,
payment services or custody services).
14 For purposes of this section, a client is an
individual or entity, including affiliates of the firm,
to whom the firm provides PCS services and any
related credit or liquidity offered in connection
with those services.
15 In identifying entities as key, examples of
quantitative criteria may include: for a client,
transaction volume/value, market value of
exposures, assets under custody, usage of PCS
services, and any extension of related intraday
credit or liquidity; for an FMU, the aggregate
volumes and values of all transactions processed
through such FMU; and for an agent bank, assets
under custody, the value of cash and securities
settled, and extensions of intraday credit.

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considerations that would assist the
firm and its key clients in maintaining
continued access to PCS services in the
period leading up to and including the
firm’s resolution. Each playbook should
provide analysis of the financial and
operational impact to the firm’s material
entities and key clients due to adverse
actions that may be taken by a key FMU
or a key agent bank and contingency
actions that may be taken by the firm.
Each playbook also should discuss any
possible alternative arrangements that
would allow continued access to PCS
services for the firm’s material entities,
identified critical operations and core
business lines, and key clients, while
the firm is in resolution. The firm is not
expected to incorporate a scenario in
which it loses key FMU or key agent
bank access into its preferred resolution
strategy or its RLEN and RCEN
estimates. The firm should continue to
engage with key FMUs, key agent banks,
and key clients, and playbooks should
reflect any feedback received during
such ongoing outreach.
Content Related to Users of PCS
Services. Individual key FMU and key
agent bank playbooks should include:
• Description of the firm’s
relationship as a user with the key FMU
or key agent bank and the identification
and mapping of PCS services to material
entities, identified critical operations,
and core business lines that use those
PCS services;
• Discussion of the potential range of
adverse actions that may be taken by
that key FMU or key agent bank when
the firm is in resolution,16 the
operational and financial impact of such
actions on each material entity, and
contingency arrangements that may be
initiated by the firm in response to
potential adverse actions by the key
FMU or key agent bank; and
• Discussion of PCS-related liquidity
sources and uses in BAU, in stress, and
in the resolution period, presented by
currency type (with U.S. dollar
equivalent) and by material entity.
Æ PCS Liquidity Sources: These may
include the amounts of intraday
extensions of credit, liquidity buffer,
inflows from FMU participants, and key
client prefunded amounts in BAU, in
stress, and in the resolution period. The
playbook also should describe intraday
credit arrangements (e.g., facilities of the
key FMU, key agent bank, or a central
bank) and any similar custodial
arrangements that allow ready access to
a firm’s funds for PCS-related key FMU
16 Examples of potential adverse actions may
include increased collateral and margin
requirements and enhanced reporting and
monitoring.

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and key agent bank obligations
(including margin requirements) in all
currencies relevant to the firm’s
participation, including placements of
firm liquidity at central banks, key
FMUs, and key agent banks.
Æ PCS Liquidity Uses: These may
include firm and key client margin and
prefunding and intraday extensions of
credit, including incremental amounts
required during resolution.
Æ Intraday Liquidity Inflows and
Outflows: The playbook should describe
the firm’s ability to control intraday
liquidity inflows and outflows and to
identify and prioritize time-specific
payments. The playbook also should
describe any account features that might
restrict the firm’s ready access to its
liquidity sources.
Content Related to Providers of PCS
Services.17 Individual key FMU and key
agent bank playbooks should include:
• Identification and mapping of PCS
services to the material entities,
identified critical operations, and core
business lines that provide those PCS
services, and a description of the scale
and the way in which each provides
PCS services;
• Identification and mapping of PCS
services to key clients to whom the firm
provides such PCS services and any
related credit or liquidity offered in
connection with such services;
• Discussion of the potential range of
firm contingency arrangements available
to minimize disruption to the provision
of PCS services to its key clients,
including the viability of transferring
key client activity and any related
assets, as well as any alternative
arrangements that would allow the
firm’s key clients continued access to
PCS services if the firm could no longer
provide such access (e.g., due to the
firm’s loss of key FMU or key agent
bank access), and the financial and
operational impacts of such
arrangements from the firm’s
perspective;
• Descriptions of the range of
contingency actions that the firm may
take concerning its provision of intraday
credit to key clients, including analysis
quantifying the potential liquidity the
firm could generate by taking such
actions in stress and in the resolution
period, such as: (i) requiring key clients
to designate or appropriately pre17 Where a firm is a provider of PCS services
through the firm’s own operations, the firm is
expected to produce a playbook for the material
entities that provide those services, addressing each
of the items described under ‘‘Content Related to
Providers of PCS Services,’’ which include
contingency arrangements to permit the firm’s key
clients to maintain continued access to PCS
services.

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position liquidity, including through
prefunding of settlement activity, for
PCS-related key FMU and key agent
bank obligations at specific material
entities of the firm (e.g., direct members
of key FMUs) or any similar custodial
arrangements that allow ready access to
key clients’ funds for such obligations in
all relevant currencies of key clients of
the firm’s operations; (ii) delaying or
restricting key client PCS activity; and
(iii) restricting, imposing conditions
upon (e.g., requiring collateral), or
eliminating the provision of intraday
credit or liquidity to key clients; and
• Descriptions of how the firm will
communicate to its key clients the
potential impacts of implementation of
any identified contingency
arrangements or alternatives, including
a description of the firm’s methodology
for determining whether any additional
communication should be provided to
some or all key clients (e.g., due to the
key client’s BAU usage of that access
and/or related intraday credit or
liquidity), and the expected timing and
form of such communication.
Capabilities. The firm is expected to
have and describe capabilities to
understand, for each material entity, the
obligations and exposures associated
with PCS activities, including
contractual obligations and
commitments. The firm should be able
to:
• Track the following items by: (i)
material entity; and (ii) with respect to
customers, counterparties, and agents
and service providers, location and
jurisdiction:
Æ PCS activities, with each activity
mapped to the relevant material entities,
identified critical operations, and core
business lines; 18
Æ Customers and counterparties for
PCS activities, including values and
volumes of various transaction types, as
well as used and unused capacity for all
lines of credit; 19
Æ Exposures to and volumes
transacted with FMUs, nostro agents,
and custodians; and 20
Æ Services provided and service level
agreements, as applicable, for other
current agents and service providers
(internal and external).21
• Assess the potential effects of
adverse actions by FMUs, nostro agents,
custodians, and other agents and service
providers, including suspension or
termination of membership or services,
on the firm’s operations and customers
18 12

CFR 243.5(e)(12) and 381.5(e)(12).

19 Id.
20 12
21 12

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CFR 252.34(h).
CFR 243.5(f)(l)(i) and 381.5(f)(1)(i).

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and counterparties of those
operations; 22
• Develop contingency arrangements
in the event of such adverse actions; 23
and
• Quantify the liquidity needs and
operational capacity required to meet all
PCS obligations, including any change
in demand for and sources of liquidity
needed to meet such obligations.
Managing, Identifying, and Valuing
Collateral. The firm is expected to have
and describe its capabilities to manage,
identify, and value the collateral that it
receives from and posts to external
parties and affiliates. Specifically, the
firm should:
• Be able to query and provide
aggregate statistics for all qualified
financial contracts concerning crossdefault clauses, downgrade triggers, and
other key collateral-related contract
terms—not just those terms that may be
impacted in an adverse economic
environment—across contract types,
business lines, legal entities, and
jurisdictions;
• Be able to track both collateral
sources (i.e., counterparties that have
pledged collateral) and uses (i.e.,
counterparties to whom collateral has
been pledged) at the CUSIP level on at
least a t+1 basis;
• Have robust risk measurements for
cross-entity and cross-contract netting,
including consideration of where
collateral is held and pledged;
• Be able to identify CUSIP and asset
class level information on collateral
pledged to specific central
counterparties by legal entity on at least
a t+1 basis;
• Be able to track and report on interbranch collateral pledged and received
on at least a t+1 basis and have clear
policies explaining the rationale for
such inter-branch pledges, including
any regulatory considerations; and
• Have a comprehensive collateral
management policy that outlines how
the firm as a whole approaches
collateral and serves as a single source
for governance.24
Management Information Systems.
The firm should have the management
information systems (MIS) capabilities
to readily produce data on a legal entity
basis and have controls to ensure data
integrity and reliability. The firm also
should perform a detailed analysis of
the specific types of financial and risk
data that would be required to execute
the preferred resolution strategy and
22 12

CFR 252.34(f).

23 Id.
24 The policy may reference subsidiary or related
policies already in place, as implementation may
differ based on business line or other factors.

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how frequently the firm would need to
produce the information, with the
appropriate level of granularity. The
firm should have the capabilities to
produce the following types of
information, as applicable, in a timely
manner and describe these capabilities
in the Plan:
• Financial statements for each
material entity (at least monthly);
• External and inter-affiliate credit
exposures, both on- and off-balance
sheet, by type of exposure, counterparty,
maturity, and gross payable and
receivable;
• Gross and net risk positions with
internal and external counterparties;
• Guarantees, cross holdings,
financial commitments and other
transactions between material entities;
• Data to facilitate third-party
valuation of assets and businesses,
including risk metrics;
• Key third-party contracts, including
the provider, provider’s location,
service(s) provided, legal entities that
are a party to or a beneficiary of the
contract, and key contractual rights (for
example, termination and change in
control clauses);
• Legal agreement information,
including parties to the agreement and
key terms and interdependencies (for
example, change in control,
collateralization, governing law,
termination events, guarantees, and
cross-default provisions);
• Service level agreements between
affiliates, including the service(s)
provided, the legal entity providing the
service, legal entities receiving the
service, and any termination/
transferability provisions;
• Licenses and memberships to all
exchanges and value transfer networks,
including FMUs;
• Key management and support
personnel, including dual-hatted
employees, and any associated retention
agreements;
• Agreements and other legal
documents related to property,
including facilities, technology systems,
software, and intellectual property
rights. The information should include
ownership, physical location, where the
property is managed and names of legal
entities and lines of business that the
property supports; and
• Updated legal records for domestic
and foreign entities, including entity
type and purpose (for example, holding
company, bank, broker dealer, and
service entity), jurisdiction(s),
ownership, and regulator(s).
Shared and Outsourced Services. The
firm should maintain a fully actionable
implementation plan to ensure the
continuity of shared services that

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support identified critical operations or
core business lines, or are material to
the execution of the resolution strategy,
and robust arrangements to support the
continuity of shared and outsourced
services, including, without limitation,
appropriate plans to retain key
personnel relevant to the execution of
the firm’s strategy. For example,
specified firms should evaluate internal
and external dependencies and develop
documented strategies and contingency
arrangements for the continuity or
replacement of the shared and
outsourced services that are necessary to
maintain identified critical operations
or core business lines, or are material to
the execution of the resolution strategy.
Examples may include personnel,
facilities, systems, data warehouses,
intellectual property, and counsel and
consultants involved in the preparation
for and filing of bankruptcy. Specified
firms also should maintain current cost
estimates for implementing such
strategies and contingency
arrangements.
The firm should (A) maintain an
identification of all shared services that
support identified critical operations or
core business lines, or are material to
the execution of the resolution
strategy; 25 (B) maintain a mapping of
how/where these services support its
core business lines and identified
critical operations; (C) incorporate such
mapping into legal entity rationalization
criteria and implementation efforts; and
(D) mitigate identified continuity risks
through establishment of service-level
agreements (SLAs) for all shared
services that support identified critical
operations or core business lines, or are
material to the execution of the
resolution strategy.
SLAs should fully describe the
services provided, reflect pricing
considerations on an arm’s-length basis
where appropriate, and incorporate
appropriate terms and conditions to (A)
prevent automatic termination upon
certain resolution-related events and (B)
achieve continued provision of such
services during resolution. The firm
should also store SLAs in a central
repository or repositories in a searchable
format, develop and document
contingency strategies and arrangements
for replacement of critical shared
services, and complete re-alignment or
restructuring of activities within its
corporate structure. In addition, the firm
should ensure the financial resilience of
internal shared service providers by
maintaining working capital for six
months (or through the period of
25 This should be interpreted to include data
access and intellectual property rights.

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stabilization as required in the firm’s
preferred strategy) in such entities
sufficient to cover contract costs,
consistent with the preferred resolution
strategy.
The firm should identify all critical
service providers and outsourced
services that support identified critical
operations or core business lines, or are
material to the execution of the
resolution strategy, and identify any that
could not be promptly substituted. The
firm should (A) evaluate the agreements
governing these services to determine
whether there are any that could be
terminated upon commencement of any
resolution despite continued
performance, and (B) update contracts
to incorporate appropriate terms and
conditions to prevent automatic
termination upon commencement of
any resolution proceeding and facilitate
continued provision of such services.
Relying on entities projected to survive
during resolution to avoid contract
termination is insufficient to ensure
continuity. In the Plan, the firm should
document the amendment of any such
agreements governing these services.
Qualified Financial Contracts. The
Plan should reflect how the early
termination of qualified financial
contracts triggered by the parent
company’s bankruptcy filing could
impact the resolution of the firm’s
operations, including potential
termination of any contracts that are not
subject to statutory, contractual or
regulatory stays of direct default or
cross-default rights. A Plan should
explain and support the firm’s strategy
for addressing the potential disruptive
effects in resolution of early termination
provisions and cross-default rights in
existing qualified financial contracts at
both the parent company and material
entity subsidiaries. This discussion
should address, to the extent relevant
for the firm, qualified financial contracts
that include limitations of standard
contractual direct default and cross
default rights by agreement of the
parties.

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MPOE
Payment, Clearing, and Settlement
Activities Capabilities. The firm is
expected to have and describe
capabilities to understand, for each
material entity, the obligations and
exposures associated with PCS
activities, including contractual
obligations and commitments. For
example, firms should be able to:
• As users of PCS services:
Æ Track the following items by: (i)
material entity; and (ii) with respect to
customers, counterparties, and agents

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and service providers, location and
jurisdiction:
D PCS activities, with each activity
mapped to the relevant material entities,
identified critical operations, and core
business lines;
D Customers and counterparties for
PCS activities, including values and
volumes of various transaction types, as
well as used and unused capacity for all
lines of credit;
D Exposures to and volumes
transacted with FMUs, nostro agents,
and custodians; and
D Services provided and service level
agreements, as applicable, for other
current agents and service providers
(internal and external).
Æ Assess the potential effects of
adverse actions by FMUs, nostro agents,
custodians, and other agents and service
providers, including suspension or
termination of membership or services,
on the firm’s operations and customers
and counterparties of those operations;
Æ Develop contingency arrangements
in the event of such adverse actions; and
Æ Quantify the liquidity needs and
operational capacity required to meet all
PCS obligations, including intraday
requirements.
• As providers of PCS services:
Æ Identify their PCS clients and the
services they provide to these clients,
including volumes and values of
transactions;
Æ Quantify and explain time-sensitive
payments; and
Æ Quantify and explain intraday
credit provided.
Managing, Identifying and Valuing
Collateral. The firm is expected to have
and describe its capabilities to manage,
identify and value the collateral that it
receives from and posts to external
parties and affiliates, including tracking
collateral received, pledged, and
available at the CUSIP level and
measuring exposures.
Management Information Systems.
The firm should have the management
information systems (MIS) capabilities
to readily produce data on a legal entity
basis and have controls to ensure data
integrity and reliability. The firm also
should perform a detailed analysis of
the specific types of financial and risk
data that would be required to execute
the preferred resolution strategy. The
firm should have the capabilities to
produce the following types of
information, as applicable, in a timely
manner and describe these capabilities
in the Plan:
• Financial statements for each
material entity (at least monthly);
• External and inter-affiliate credit
exposures, both on- and off-balance
sheet, by type of exposure, counterparty,

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maturity, and gross payable and
receivable;
• Gross and net risk positions with
internal and external counterparties;
• Guarantees, cross holdings,
financial commitments and other
transactions between material entities;
• Data to facilitate third-party
valuation of assets and businesses,
including risk metrics;
• Key third-party contracts, including
the provider, provider’s location,
service(s) provided, legal entities that
are a party to or a beneficiary of the
contract, and key contractual rights (for
example, termination and change in
control clauses);
• Legal agreement information,
including parties to the agreement and
key terms and interdependencies (for
example, change in control,
collateralization, governing law,
termination events, guarantees, and
cross-default provisions);
• Service level agreements between
affiliates, including the service(s)
provided, the legal entity providing the
service, legal entities receiving the
service, and any termination/
transferability provisions;
• Licenses and memberships to all
exchanges and value transfer networks,
including FMUs;
• Key management and support
personnel, including dual-hatted
employees, and any associated retention
agreements;
• Agreements and other legal
documents related to property,
including facilities, technology systems,
software, and intellectual property
rights. The information should include
ownership, physical location, where the
property is managed and names of legal
entities and lines of business that the
property supports; and
• Updated legal records for domestic
and foreign entities, including entity
type and purpose (for example, holding
company, bank, broker dealer, and
service entity), jurisdiction(s),
ownership, and regulator(s).
Shared and Outsourced Services. The
firm should maintain robust
arrangements to support the continuity
of shared and outsourced services that
support any identified critical
operations or are material to the
execution of the resolution strategy,
including appropriate plans to retain
key personnel relevant to the execution
of the firm’s strategy. For example,
specified firms should evaluate internal
and external dependencies and develop
documented strategies and contingency
arrangements for the continuity or
replacement of the shared and
outsourced services that are necessary to
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or are material to the execution of the
resolution strategy. Examples may
include personnel, facilities, systems,
data warehouses, intellectual property,
and counsel and consultants involved in
the preparation for and filing of
bankruptcy. Specified firms also should
maintain current cost estimates for
implementing such strategies and
contingency arrangements.
The firm should: (A) maintain an
identification of all shared services that
support identified critical operations or
are material to the execution of the
resolution strategy; and (B) mitigate
identified continuity risks through
establishment of SLAs for all shared
services supporting identified critical
operations or are material to the
execution of the resolution strategy.
SLAs should fully describe the services
provided and incorporate appropriate
terms and conditions to: (A) prevent
automatic termination upon certain
resolution-related events; and (B)
achieve continued provision of such
services during resolution.
The firm should identify all critical
service providers and outsourced
services that support identified critical
operations or are material to the
execution of the resolution strategy. Any
of these services that cannot be
promptly substituted should be
identified in a firm’s Plan. The firm
should: (A) evaluate the agreements
governing these services to determine
whether there are any that could be
terminated upon commencement of any
resolution despite continued
performance; and (B) update contracts
to incorporate appropriate terms and
conditions to prevent automatic
termination upon commencement of
any resolution proceeding and facilitate
continued provision of such services.
Relying on entities projected to survive
during resolution to avoid contract
termination is insufficient to ensure
continuity. In the Plan, the firm should
document the amendment of any such
agreements governing these services.

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VI. Legal Entity Rationalization
SPOE
Legal Entity Rationalization Criteria
(LER Criteria). A firm should develop
and implement legal entity
rationalization criteria that support the
firm’s preferred resolution strategy and
minimize risk to U.S. financial stability
in the event of the firm’s resolution. LER
Criteria should consider the best
alignment of legal entities and business
lines to improve the firm’s resolvability
under different market conditions. LER
Criteria should govern the firm’s
corporate structure and arrangements

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between legal entities in a way that
facilitates the firm’s resolvability as its
activities, technology, business models,
or geographic footprint change over
time. Specifically, application of the
criteria should:
(A) Facilitate the recapitalization and
liquidity support of material entities, as
required by the firm’s resolution
strategy. Such criteria should include
clean lines of ownership, minimal use
of multiple intermediate holding
companies, and clean funding pathways
between the parent and material
operating entities;
(B) Facilitate the sale, transfer, or
wind-down of certain discrete
operations within a timeframe that
would meaningfully increase the
likelihood of an orderly resolution of
the firm, including provisions for the
continuity of associated services and
mitigation of financial, operational, and
legal challenges to separation and
disposition;
(C) Adequately protect the subsidiary
IDIs from risks arising from the
activities of any nonbank subsidiaries of
the firm (other than those that are
subsidiaries of an IDI); and
(D) Minimize complexity that could
impede an orderly resolution and
minimize redundant and dormant
entities.
These criteria should be built into the
firm’s ongoing process for creating,
maintaining, and optimizing its
structure and operations on a
continuous basis.
Finally, the Plan should include a
description of the firm’s legal entity
rationalization governance process.
MPOE
Legal Entity Structure. A firm should
maintain a legal entity structure that
supports the firm’s preferred resolution
strategy and minimizes risk to U.S.
financial stability in the event of the
firm’s failure. The firm should consider
factors such as business activities;
banking group structures and booking
models and practices; and potential
sales, transfers, or wind-downs during
resolution. The Plan should describe
how the firm’s legal entity structure
aligns core business lines and any
identified critical operations with the
firm’s material entities to support the
firm’s resolution strategy. To the extent
a material entity IDI relies upon an
affiliate that is not the IDI’s subsidiary
during resolution, including for the
provision of shared services, the firm
should discuss its rationale for the legal
entity structure and associated
resolution risks and potential mitigants.
The firm’s corporate structure and
arrangements among legal entities

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should be considered and maintained in
a way that facilitates the firm’s
resolvability as its activities, technology,
business models, or geographic footprint
change over time.
VII. Insured Depository Institution
Resolution
MPOE
Least-cost requirement analysis. If the
Plan includes a strategy that
contemplates the separate resolution of
a U.S. IDI that is a material entity, the
Plan should explain how the resolution
could be achieved in a manner that is
consistent with the overall objective of
the Plan to substantially mitigate the
risk that the failure of the specified firm
would have serious adverse effects on
financial stability in the United States
while also complying with the statutory
and regulatory requirements governing
IDI resolution.
This explanation does not include an
expectation that firms provide a
complete least-cost analysis. A complete
least-cost analysis would, for example,
include a comparison of the preferred
strategy for resolving an IDI that is a
material entity against every other
possible resolution method available for
that IDI.
To explain how a firm’s preferred
strategy could potentially enable the
FDIC to resolve the failed bank in a
manner consistent with the FDIC’s
statutory least-cost requirement, the
firm could instead compare the
estimated costs to the DIF of the firm’s
preferred resolution strategy to a payout
liquidation and, for strategies involving
a BDI, explain how the inclusion or
exclusion of uninsured deposits within
the BDI would impact the estimated
overall costs to the DIF.
Firms should address the following
matters as applicable to their strategy:
• Payout Liquidation: If the Plan
envisions a payout liquidation for the
IDI, with or without use of a Deposit
Insurance National Bank or a paying
agent, the Plan should explain how the
deposit payout and asset liquidation
process would be executed in a manner
that substantially mitigates the risk of
serious adverse effects on U.S. financial
stability.
• P&A Transaction: If the Plan
assumes a weekend P&A strategy, the
plan should first demonstrate the ready
availability of this option under severely
adverse economic scenario, assuming
that markets are functioning and
competitors are in a position to take on
business. The Plan may demonstrate a
weekend P&A strategy is available by
discussing evidence of several potential
buyers supported by information

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indicating that these potential buyers
could reasonably be expected to have
sufficient financial resources to
complete the transaction in a severely
adverse scenario and the expertise to
incorporate the business of the failed
bank. The plan should also address how
such a merger can be completed with
these potential acquirers considering
any applicable approvals that would be
required for the proposed transaction.
Additionally, a P&A strategy should
explain how it either (1) results in no
loss to the DIF or (2) despite its resulting
in a loss to the DIF, the loss is less than
would be incurred through a payout
liquidation.
• All-Deposit BDI: If the Plan
contemplates a strategy involving an alldeposit BDI, the Plan should include an
analysis that shows that the incremental
estimated cost to the DIF of transferring
all uninsured deposits to the BDI is
offset by the preservation of franchise
value and other benefits connected to
the uninsured deposits (such as the
franchise value derived from retaining
full banking relationships).
• BDI with Partial Uninsured Deposit
Transfers: A Plan may demonstrate the
feasibility of a strategy involving a BDI
that assumes (1) all insured deposits or
(2) only a portion of uninsured deposits
(e.g. an advance dividend to uninsured
depositors for a portion of their deposit
claim) by showing that the incremental
estimated cost to the DIF of transferring
the portion of uninsured deposits to the
BDI is offset by the preservation of
franchise value connected to those
uninsured deposits (such as the
franchise value derived from retaining
full banking relationships).
In all cases, the Plan should discuss
how the implementation of the Plan’s
resolution strategy, including the impact
on any depositors whose accounts are
not transferred in whole or in part to a
BDI, would not be likely to create the
risk of serious adverse effects on U.S.
financial stability.
Valuation. Regardless of the strategy
chosen, the Plan should demonstrate
reasonable and well-supported
assumptions that support the valuation
of the failed IDI’s assets and business
franchise under the firm’s preferred
strategy that are drawn from comparable
transactions or other inputs observable
in the marketplace. A firm’s franchise
value is generally understood to be the
value of the bank as an operating
company relative to the value of the
firm’s individual assets minus its
liabilities. In assessing the franchise
value of the firm’s business, the Plan
could provide support through relevant
inputs such as the revenue generated by
the account relationships; the

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efficiencies in administrative costs
associated with servicing large deposits/
large relationships; the elimination of
barriers to entry or the reduction in
customer acquisition costs; growth
history and prospects for the products
or business activity; market trading or
sales multiples; or any other factors the
firm believes appropriate. Asset values
should be representative of the bank’s
asset mix under the appropriate
economic conditions and of sufficient
distress as to result in failure.
Exit from BDI. A Plan should include
a discussion of the eventual exit from
the BDI. A Plan could support the
feasibility of an exit strategy by, for
example, describing an actionable
process, based on historical precedent
or otherwise supportable projections,
that winds down certain businesses,
includes the sale of assets and the
transfer of deposits to one or multiple
acquirers, or culminates in a capital
markets transaction, such as an initial
public offering or a private placement of
securities.
VIII. Format and Structure of Plans;
Assumptions
SPOE & MPOE
Format of Plan
Executive Summary. The Plan should
contain an executive summary
consistent with the Rule, which must
include, among other things, a concise
description of the key elements of the
firm’s strategy for an orderly resolution.
In addition, the executive summary
should include a discussion of the
firm’s assessment of any impediments to
the firm’s resolution strategy and its
execution, as well as the steps it has
taken to address any identified
impediments.
Narrative. The Plan should include a
strategic analysis consistent with the
Rule. This analysis should take the form
of a concise narrative that enhances the
readability and understanding of the
firm’s discussion of its strategy for an
orderly resolution in bankruptcy or
other applicable insolvency regimes
(Narrative).
Appendices. The Plan should contain
a sufficient level of detail and analysis
to substantiate and support the strategy
described in the Narrative. Such detail
and analysis should be included in
appendices that are distinct from and
clearly referenced in the related parts of
the Narrative (Appendices).
Public Section. The Plan must be
divided into a public section and a
confidential section consistent with the
requirements of the Rule.
Other Informational Requirements.
The Plan must comply with all other

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informational requirements of the Rule.
The firm may incorporate by reference
previously submitted information as
provided in the Rule.
Guidance Regarding Assumptions
1. The Plan should be based on the
current state of the applicable legal and
policy frameworks. Pending legislation
or regulatory actions may be discussed
as additional considerations.
2. The firm must submit a Plan that
does not rely on the provision of
extraordinary support by the United
States or any other government to the
firm or its subsidiaries to prevent the
failure of the firm.26 The firm should
not submit a Plan that assumes the use
of the systemic risk exception to the
least-cost test in the event of a failure of
an IDI requiring resolution under the
FDI Act.
3. The firm should not assume that it
will be able to sell identified critical
operations or core business lines, or that
unsecured funding will be available
immediately prior to filing for
bankruptcy.
4. The Plan should assume the DoddFrank Act Stress Test (DFAST) severely
adverse scenario for the first quarter of
the calendar year in which the Plan is
submitted is the domestic and
international economic environment at
the time of the firm’s failure and
throughout the resolution process.
5. The resolution strategy may be
based on an idiosyncratic event or
action, including a series of
compounding events. The firm should
justify use of that assumption,
consistent with the conditions of the
economic scenario.
6. Within the context of the applicable
idiosyncratic scenario, markets are
functioning and competitors are in a
position to take on business. If a firm’s
Plan assumes the sale of assets, the firm
should take into account all issues
surrounding its ability to sell in market
conditions present in the applicable
economic condition at the time of sale
(i.e., the firm should take into
consideration the size and scale of its
operations as well as issues of
separation and transfer.).
7. For a firm that adopts an MPOE
resolution strategy, the Plan should
demonstrate and describe how the
failure event(s) results in material
financial distress.27 In particular, the
Plan should consider the likelihood that
there would be a diminution of the
firm’s liquidity buffer in the stress
26 12

CFR 243.4(h)(2) and 381.4(h)(2).
Section 11(c)(5) of the FDI Act, codified at
11 U.S.C. 1821(c)(5), which details grounds for
appointing the FDIC as conservator or receiver of
an IDI.
27 See

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period prior to filing for bankruptcy
from high unexpected outflows of
deposits and increased liquidity
requirements from counterparties.
Though the immediate failure event
may be liquidity-related and associated
with a lack of market confidence in the
financial condition of the covered
company or its material legal entity
subsidiaries prior to the final
recognition of losses, the demonstration
and description of material financial
distress may also include depletion of
capital. Therefore, the Plan should also
consider the likelihood of the depletion
of capital.
8. The firm should not assume any
waivers of section 23A or 23B of the
Federal Reserve Act in connection with
the actions proposed to be taken prior
to or in resolution.
9. The Plan should support any
assumptions that the firm will have
access to the Discount Window and/or
other borrowings during the period
immediately prior to entering
bankruptcy. To the extent the firm
assumes use of the Discount Window,
Federal Home Loan Banks, and/or other
borrowings, the Plan should support
that assumption with a discussion of the
operational testing conducted to
facilitate access in a stress environment,
placement of collateral, and the amount
of funding accessible to the firm. The
firm may assume that its depository
institutions will have access to the
Discount Window only for a few days
after the point of failure to facilitate
orderly resolution. However, the firm
should not assume its subsidiary
depository institutions will have access
to the Discount Window while critically
undercapitalized, in FDIC receivership,
or operating as a bridge bank, nor
should it assume any lending from a
Federal Reserve credit facility to a nonbank affiliate.
Financial Statements and Projections.
The Plan should include the actual
balance sheet for each material entity
and the consolidating balance sheet
adjustments between material entities as
well as pro forma balance sheets for
each material entity at the point of
failure and at key junctures in the
execution of the resolution strategy. It
should also include statements of
projected sources and uses of funds for
the interim periods. The pro forma
financial statements and accompanying
notes in the Plan should clearly
evidence the failure trigger event; the
Plan’s assumptions; and any
transactions that are critical to the
execution of the Plan’s preferred
strategy, such as recapitalizations, the
creation of new legal entities, transfers
of assets, and asset sales and unwinds.

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Material Entities. Material entities
should encompass those entities,
including foreign offices and branches,
which are significant to the
maintenance of an identified critical
operation or core business line. If the
abrupt disruption or cessation of a core
business line might have systemic
consequences to U.S. financial stability,
the entities essential to the continuation
of such core business line should be
considered for material entity
designation. Material entities should
include the following types of entities:
1. Any U.S.-based or non-U.S.
affiliates, including any branches, that
are significant to the activities of an
identified critical operation.
2. Subsidiaries or foreign offices
whose provision or support of global
treasury operations, funding, or
liquidity activities (inclusive of
intercompany transactions) is
significant to the activities of an
identified critical operation.
3. Subsidiaries or foreign offices that
provide material operational support in
resolution (key personnel, information
technology, data centers, real estate or
other shared services) to the activities of
an identified critical operation.
4. Subsidiaries or foreign offices that
are engaged in derivatives booking
activity that is significant to the
activities of an identified critical
operation, including those that conduct
either the internal hedge side or the
client-facing side of a transaction.
5. Subsidiaries or foreign offices
engaged in asset custody or asset
management that are significant to the
activities of an identified critical
operation.
6. Subsidiaries or foreign offices
holding licenses or memberships in
clearinghouses, exchanges, or other
FMUs that are significant to the
activities of an identified critical
operation.
For each material entity (including a
branch), the Plan should enumerate, on
a jurisdiction-by-jurisdiction basis, the
specific mandatory and discretionary
actions or forbearances that regulatory
and resolution authorities would take
during resolution, including any
regulatory filings and notifications that
would be required as part of the
preferred strategy, and explain how the
Plan addresses the actions and
forbearances. The Plan should describe
the consequences for the covered
company’s resolution strategy if specific
actions in a non-U.S. jurisdiction were
not taken, delayed, or forgone, as
relevant.

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IX. Public Section
SPOE & MPOE
The purpose of the public section is
to inform the public’s understanding of
the firm’s resolution strategy and how it
works.
The public section should discuss the
steps that the firm is taking to improve
resolvability under the U.S. Bankruptcy
Code. The public section should
provide background information on
each material entity and should be
enhanced by including the firm’s
rationale for designating material
entities. The public section should also
discuss, at a high level, the firm’s intragroup financial and operational
interconnectedness (including the types
of guarantees or support obligations in
place that could impact the execution of
the firm’s strategy).
The discussion of strategy in the
public section should broadly explain
how the firm has addressed any
deficiencies, shortcomings, and other
key vulnerabilities that the agencies
have identified in prior plan
submissions. For each material entity, it
should be clear how the strategy
provides for continuity, transfer, or
orderly wind-down of the entity and its
operations. There should also be a
description of the resulting organization
upon completion of the resolution
process.
The public section may note that the
Plan is not binding on a bankruptcy
court or other resolution authority and
that the proposed failure scenario and
associated assumptions are hypothetical
and do not necessarily reflect an event
or events to which the firm is or may
become subject.
By order of the Board of Governors of the
Federal Reserve System.
Ann E. Misback,
Secretary of the Board.
Federal Deposit Insurance Corporation.
By order of the Board of Directors.
Dated at Washington, DC, on August 9,
2024.
James P. Sheesley,
Assistant Executive Secretary.
[FR Doc. 2024–18191 Filed 8–14–24; 8:45 am]
BILLING CODE 6210–01–P; 6714–01–P

FEDERAL RESERVE SYSTEM
Change in Bank Control Notices;
Acquisitions of Shares of a Bank or
Bank Holding Company
The notificants listed below have
applied under the Change in Bank
Control Act (Act) (12 U.S.C. 1817(j)) and
§ 225.41 of the Board’s Regulation Y (12
CFR 225.41) to acquire shares of a bank

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