The Federal Deposit Insurance Corporation (FDIC) has modified its approach to resolution planning for large insured depository institutions (IDIs). The agency aims to focus the planning process on operational information essential for either a swift weekend sale or short-term operation of a large bank while marketing it.
For the upcoming resolution plan submissions, the FDIC has exempted IDIs from certain content requirements. Notably, institutions are no longer required to use a bridge bank strategy or include a hypothetical failure scenario in their plan.
“The 2023 bank failures served as a reminder of how costly and damaging a bridge bank solution can be,” stated Acting Chairman Travis Hill. “Today’s action is one step in shifting our approach towards maximizing the likelihood of a lower cost and more stabilizing resolution for large regional banks.”
The FDIC has also issued an updated set of frequently asked questions (FAQs) to describe the exemptions and clarify certain expectations. The agency continues to evaluate other provisions in the IDI Rule and their relevance to different bank groups. Additional FAQs may be released in the future.
