(MENAFN) On Friday, the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve Board disclosed findings of weaknesses in bankruptcy plans submitted by four major American banks. The joint review conducted by these regulatory bodies scrutinized submissions from eight of the largest and most complex banks in the United States, revealing deficiencies in the plans of Bank of America, Citigroup, Goldman Sachs, and JPMorgan Chase for the year 2023.

According to a statement from the agencies, each identified weakness in the plans of these four banks constitutes a "shortcoming," indicating concerns about the plans' feasibility. The FDIC and the Federal Reserve emphasized that they have provided detailed feedback to all eight banks, outlining areas where further development of their resolution strategies and capabilities is necessary.

Specifically, the feedback for banks with identified shortcomings delineates the weaknesses contributing to these shortcomings and specifies remedial actions mandated by the regulatory agencies. The aim is to address these shortcomings comprehensively in the banks' next resolution plans, which are due by July 1, 2025.

The regulatory scrutiny underscores the critical importance of robust bankruptcy plans for ensuring the stability and resilience of major financial institutions, particularly in times of economic stress or potential financial distress. Moving forward, the banks will need to diligently address the identified weaknesses and enhance their contingency strategies to meet regulatory expectations and bolster their readiness to navigate potential financial challenges effectively.

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