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November 23, 2022

Banking Regulators’ Pre-Thanksgiving Announcement Passing Living Wills for the Largest Banks Shows Some Progress but Falls Well Short of Addressing Too-Big-To-Fail

WASHINGTON, D.C.—Phillip Basil, Director of Banking Policy at Better Markets, issued this statement in response to the publication of supervisory feedback letters related to the most recent resolution plans of the Global Systemically Important Banks:

“As with the late Friday announcement of the supervisory feedback on Truist Financial’s so-called living will, the banking agencies have delivered good news for the nation’s largest, most systemically important banks just in time for the Thanksgiving holiday, minimizing public scrutiny. Nearly all the GSIBs passed without any significant identified issues. Only Citigroup had an identified issue, but this supervisory finding is essentially meaningless because it is an issue that was previously identified by the Office of the Comptroller of the Currency in 2020. The resolution planning process, including the supervisory review process by the banking agencies, still has significant deficiencies that must be addressed.

“The process is intended to ensure the largest banks can be resolved and taken apart or sold off piece-by-piece without creating market contagion and threatening the economy, having to be sold to an even larger bank, or – most likely – being bailed out by the American taxpayer. The current process falls well short of that because it does not properly assess whether banks’ plans would be able to allow them to go through the bankruptcy process with the same standards as any other corporation in America, as pointed out by Consumer Financial Protection Bureau Director Rohit Chopra in his statement today. Additionally, more must be done to strengthen banks’ financial preparedness – importantly, that includes ensuring subsidiaries are pre-capitalized and pre-funded through rules instead of non-binding guidance.

“The supervisory feedback letters note that there will be more supervisory scrutiny going forward that will include ‘expanded validation and testing of the firm’s resolution capabilities,’ and that is indeed a good effort that will improve the assessment process. But many years after the passage of the Dodd Frank Act, it is past time for incremental progress. This process must be designed and run in a way that appropriately addresses the too-big-to-fail issue and protects taxpayers and the economy.”


Better Markets is a non-profit, non-partisan, and independent organization founded to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit


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