(Reuters) – U.S. bank regulators said four major banks had shortcomings in their “living wills” – or plans that outline how they could be safely wound down if they went bankrupt or came under pressure.
The four lenders – Citigroup, Bank of America, Goldman Sachs and JPMorgan Chase – all had problems related to the plan to unwind their derivatives portfolios, although some of the specific issues varied, the regulators said.
Here is a selection of the comments:
Shortcoming identified
Bank
Citi In response to a test by regulators, the
grou bank inaccurately calculated the capital
p and liquidity it would need for an orderly
wind down of its derivatives portfolio. Its
systems lack ability to incorporate updated
stress scenarios and assumptions.
Bank Bank could not use dates outside of the
of normal business-as-usual production process
Amer for spot derivatives and trading positions
ica in estimating resource needs.
Gold Plan does not account for the complexity
man and the granularity necessary to accurately
Sach measure exit timing, costs and the
s difficulty of unwinding its derivatives
positions.
JPMo Bank was unable to update certain economic
rgan conditions while calculating its capital
Chas and liquidity needs tied to unwinding its
e derivatives portfolio, in response to a
test by regulators.
(Reporting by Niket Nishant in Bengaluru, editing by Lananh Nguyen and Barbara Lewis)
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