At least half of the banks deemed “too big too fail” will reportedly have a key proposal rejected by federal regulators.
According to a report by The Wall Street Journal, regulators are planning to reject the “living wills” submitted by four of the eight “systemically important” banks.
These wills are documents outlining how the bank would handle a possible bankruptcy in a way that would not be burdensome on the public or lead to another bailout.
According to the Journal, which cites people familiar with the matter, JPMorgan Chase and at least three other banks will have their “living will” plans rejected by the FDIC and Federal Reserve. Additionally, the findings and rejection of the plans should be released to the public soon.
If the banks do not submit acceptable plans, they are subject to sanctions including higher capital requirements.
The move also comes less than 24 hours before JPMorgan is set to report earnings for the first quarter.
JP Morgan did not immediately respond to a request for comment.
More to come…
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