Banks’ Living Wills Get Silent Treatment From U.S. Regulators
By Jesse Hamilton and Zachary Tracer

This week, for the third time, the biggest U.S. banks have sent regulators detailed plans for their own demise. The regulators’ response to those filings has been far less detailed. The bankruptcy plans, known as living wills, are designed to reassure the public and the market that banks are not “too big to fail” and that they could go bankrupt without damaging the rest of the economy. A group of 11 banks including JPMorgan Chase & Co. and Goldman Sachs Group Inc. had to file a new round of plans yesterday even though they have yet to get a response from regulators on documents from last year. The lack of feedback from the the Federal Deposit Insurance Corp. and Federal Reserve has prompted analysts and banking officials to question whether the process is effective. It has also complicated the situation for three systemically important firms that aren’t banks but need to file living wills for the first time this year — Prudential Financial Inc., American International Group Inc. and General Electric Co.’s financial arm. For regulators, silence may be the best response for the time being, because “banks still don’t know critical policy assumptions on which to base their resolution planning,” said Karen Shaw Petrou, managing partner of Washington-based research firm Federal Financial Analytics Inc. Petrou said other unfinished work at the agencies, such as figuring out how to use another Dodd-Frank power for government seizures of the firms, must be done before the banks can be held accountable for their plans.