In remarks at the Single Resolution Mechanism’s 10th Anniversary Conference, Federal Deposit Insurance Corporation (FDIC) Acting Chairman Travis Hill outlined lessons from the 2023 large bank failures and described how the agency is reshaping large-bank resolution readiness to reduce reliance on bridge banks and improve its ability to achieve rapid sales at lower cost to the Deposit Insurance Fund (DIF). The update covered changes already made to insured depository institution (IDI) resolution planning, upgrades to the FDIC’s failed-bank marketing and valuation processes, and workstreams on receivership liquidity, cross-border bail-in execution, and planning for central counterparties (CCPs). For IDI resolution plans, Hill highlighted April frequently asked questions that waived the requirement to build plans around a bridge bank strategy and instead allowed banks to describe suitable strategies the FDIC could execute, with a focus on the operational information needed for a weekend sale or short-term operation while marketing the institution. The FAQs also waived various content elements, including speculative scenario analysis and a subjective credibility standard, while retaining an emphasis on capabilities such as quickly standing up a virtual data room (VDR); filings due in July are still under review. Alongside this, the FDIC is improving its own execution tools by engaging potential acquirers on bidding-process transparency and communication, updating transaction documentation to accommodate more varied deal structures, strengthening VDR content and timeliness, enhancing internal systems and contracting, and rolling out a Large Bank Ready Reserve training program. A revamped least-cost test model is intended to move bid analysis from days to hours, and the agency plans to reevaluate bidder eligibility criteria and expand nonbank participation, including through seller financing and a pre-qualification process for nonbank bidders. Next steps include a forthcoming proposal to amend the IDI resolution planning regulation, at least to codify the FAQs and potentially streamline overlap with Title I resolution planning for firms using single point of entry or multiple point of entry strategies. The FDIC plans to pilot nonbank bidder pre-qualification starting in January 2026, then publicly release the process and application after incorporating feedback. Hill also pointed to efforts to secure lower-cost receivership liquidity by enabling faster securitization through the Federal Financing Bank, to chair a new Financial Stability Board task force focused on U.S. securities law issues that could impede cross-border bail-in, and to convene further cross-agency discussions on CCP resolution preparedness.
Federal Deposit Insurance Corporation 2025-10-15
Federal Deposit Insurance Corporation sets out large-bank resolution planning reforms and January 2026 nonbank bidder pre-qualification pilot
At the Single Resolution Mechanism’s 10th Anniversary Conference, FDIC Acting Chairman Travis Hill discussed lessons from the 2023 large bank failures and outlined enhancements to large-bank resolution readiness, including changes to insured depository institution resolution planning and improvements in failed-bank marketing and valuation processes. The FDIC is also working on amending resolution planning regulations, piloting nonbank bidder pre-qualification, and securing lower-cost receivership liquidity through faster securitization.