Living Will Deadline for Non-U.S. Banks Approaching
Commentary by Scott Cammarn
Non-U.S. banks are reminded that the deadline for requesting the right to submit a "tailored" resolution plan is April 5, 2013.While the resolution plan (or "living will") itself is not due until December 31, 2013, non-U.S. banks that fail to submit a request for tailored plan status by the April 5th deadline must submit a comprehensive living will in December. The living will requirement applies to any non-U.S. bank with global assets of $50 billion or more that maintains a branch, agency office, or FDIC-insured bank subsidiary in the U.S. (referred to as "foreign banking organizations" or "FBOs"). There are roughly 150 FBOs in the U.S., many of which are entitled to tailored plan status - provided a tailored plan request letter is submitted by April 5th.
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Clients seeking more information may contact Scott Cammarn directly.
Commentary
Tailored plan status is available for a non-U.S. bank that has less than $100 billion in U.S. non-bank assets, and 85% or more of its U.S. consolidated assets are banking assets (i.e., held by the foreign bank's U.S. branches, agency offices, or FDIC-insured bank subsidiaries). Tailored plan status enables a non-U.S. bank to submit a narrower living will, focusing predominantly on its U.S. non-banking activities and the relationships between those non-banking activities and its U.S. banking activities. It is important to recognize, however, that non-U.S. banks with no non-banking activities in the U.S. are still required to submit a living will by December 31, 2013. Thus, even those foreign banks without any U.S. non-banking activities should submit a tailored resolution plan request by the April 5th deadline to avoid having to submit a more detailed living will in December.
The living will requirement applies to any foreign bank with global assets of $50 billion or more that maintains a branch, agency office, or FDIC-insured bank subsidiary in the U.S. (referred to as "foreign banking organizations" or "FBOs"). There are roughly 150 FBOs in the U.S., many of which are entitled tailored plan status - provided a tailored plan request letter is submitted by April 5th.