Banks drags heels on living wills
March 5, 2012
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FT reports today that only one out of the 29 global banks that have been requested to have “living wills” ready by year end have finalized a draft recovery and resolution plan. Some more have completed just the recovery part, but progress here is uneven. The big European banks are lagging furthest behind. According to FT this may in part be due to regional differences, as supervisors are adopting different approaches towards banks.
FT also notes that banks find it particularly hard to foresee the regulatory reaction to a crisis situation, and they therefore have to guess for example how a particular national regulator will approach a branch in a crisis; will it be resolved locally or will it be resolved by the home supervisors. As long as these important issues remain unsettled (and they have been for many decades!), it is hard for banks to complete their living will process.