Federal regulators approve ‘living wills’ for 8 big banks

WASHINGTON (AP) — Federal regulators have approved the “living will” plans for the nation’s eight largest and most complex banks.

The decision by the Federal Reserve and the Federal Deposit Insurance Corp. was in contrast to actions taken in April 2016 when the two agencies said that plans from five of the eight institutions had significant deficiencies.

Congress imposed the requirement to write the plans, commonly called living wills, in the 2010 Dodd-Frank financial overhaul legislation.

The aim of the requirement was to force each of the nation’s biggest banks to describe their plans to implement a rapid and orderly winding down of the institution under bankruptcy in the event that the bank came under severe financial distress.