UBS and Credit Suisse have received extra time to deliver resolution plans to the Federal Reserve. The plans are designed to help the authorities prepare for a worst-case scenario.
UBS and Credit Suisse, Switzerland’s two big banks, have received an extension for the submission of the resolution plans, the Federal Reserve said in a statement overnight. They now have time until July 1, 2020 to submit the plans.
Resolution plans, required by the Dodd-Frank Act and commonly known as living wills, must describe the company's strategy for rapid and orderly resolution under bankruptcy in the event of material financial distress or failure of the company, the Fed said.
The extension will allow additional time for the Fed to provide feedback to the firms on their last submissions and for the firms to produce their next plans.
Once a Year Requirement
Apart from UBS and Credit Suisse, both of which with major operations in the U.S., the U.K.’s Barclays Bank and Prudential Financial also received more time to fulfill their obligations. In principle, all big banks have to provide the contingency plans once a year. The companies however have complained that the plans demand a lot of work from the banks and therefore received several extensions.
Deutsche Bank in June was the only company to have failed the second part of the U.S. stress test.
