Resolved…What Was That Again?
As evidenced again last week at the FDIC meeting (see Client Report DEPOSITINSURANCE115), structural change is under way in how larger regional banks are required to prepare for an orderly demise. This comes not just from the new FRB/FDIC request for views on what will clearly now be new resolution standards for these companies (see FSM Report RESOLVE48), but also how large M&A transactions are reviewed even while these standards undergo the lengthy comment-and-approval process kicked off by a release that hasn’t yet even hit the Federal Register. As we noted in our assessment of the approval of the USB/MUFG acquisition (see Client Report MERGER11), the FRB and OCC have altered the conditions they impose on super-regionals even if – as in this case – the Fed thinks the resulting company is already resolvable. Our analyses assess the strategic implications of what could be structural rewrites not only of how large regionals are resolved, but also even of how they operate while still in the pink.