We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
JPM, WFC & Others Clear Key Regulatory Hurdle on Living Wills
Read MoreHide Full Article
Key Takeaways
JPM and seven other major U.S. banks cleared Fed and FDIC review of 2025 living wills.
BAC, GS, JPM and C addressed prior derivatives-related weaknesses flagged in 2023 plans.
WFC and peers' regulatory clearance seen as supporting financial system resilience.
U.S. banking regulators have signed off on the latest “living wills” submitted by the eight major banks, including JPMorgan Chase (JPM - Free Report) , Bank of America (BAC - Free Report) , Citigroup (C - Free Report) and Wells Fargo (WFC - Free Report) , in July 2025, marking a positive regulatory milestone for Wall Street and the broader financial system.
The Federal Reserve and the Federal Deposit Insurance Corporation ("FDIC") stated they did not identify any shortcomings or deficiencies in the 2025 resolution plans submitted by eight major U.S. banking organizations and 56 foreign banking organizations. These plans, commonly known as living wills, explain how a bank could be wound down in an orderly way during severe financial distress or failure without destabilizing the financial system.
The decision is especially notable because regulators also said that earlier derivatives-related weaknesses found in the 2023 plans of Bank of America, Goldman Sachs (GS - Free Report) , JPMorgan Chase and Citigroup had been satisfactorily addressed. Notably, the Bank of New York Mellon and Morgan Stanley also received resolution plan feedback letters.
What Are “Living Wills”?
The Dodd-Frank legislation, passed in 2010, mandated that banks of a certain size create these plans regularly, outlining how they could be wound down in the event of a crisis without endangering the larger financial system. This mandate was part of the steps taken in the wake of the 2008 financial crisis.
These mandates are meant to show regulators that large banking organizations can be resolved quickly and orderly if they face material financial distress or failure. The largest and most complex banking organizations must file these plans every other year, while other large domestic and foreign banks generally file every three years.
Why Regulatory Clearance Matter for Banks
The latest sign-off indicates that regulators are more comfortable with how major banks plan to handle a potential failure scenario. For investors, this may help reduce concerns about near-term regulatory penalties, forced structural changes or additional compliance burdens tied to resolution planning.
The decision also supports confidence in financial stability. The 2008 financial crisis showed how the failure of a large financial institution can create stress across the banking system and capital markets. Living wills are designed to limit that risk by ensuring that large banks have credible plans to wind down operations without causing wider disruption.
For banks such as JPMorgan Chase, Bank of America, Citigroup, Wells Fargo and Goldman Sachs, the clearance is a constructive development. It removes a regulatory overhang and highlights progress in areas that had previously drawn scrutiny.
Bottom Line
The Fed and the FDIC’s latest feedback marks a favorable regulatory milestone for major U.S. banks. While no resolution plan can guarantee that the failure of a large financial institution would be painless, the agencies’ review indicates that the latest plans are credible and free of identified shortcomings or deficiencies. For major U.S. banks, including JPM, BAC, C, GS and WFC, the approval signals progress in crisis-readiness and strengthens confidence in the resilience of the financial system.
View the Zacks #1 Rank List
Image: Bigstock
JPM, WFC & Others Clear Key Regulatory Hurdle on Living Wills
Key Takeaways
U.S. banking regulators have signed off on the latest “living wills” submitted by the eight major banks, including JPMorgan Chase (JPM - Free Report) , Bank of America (BAC - Free Report) , Citigroup (C - Free Report) and Wells Fargo (WFC - Free Report) , in July 2025, marking a positive regulatory milestone for Wall Street and the broader financial system.
The Federal Reserve and the Federal Deposit Insurance Corporation ("FDIC") stated they did not identify any shortcomings or deficiencies in the 2025 resolution plans submitted by eight major U.S. banking organizations and 56 foreign banking organizations. These plans, commonly known as living wills, explain how a bank could be wound down in an orderly way during severe financial distress or failure without destabilizing the financial system.
The decision is especially notable because regulators also said that earlier derivatives-related weaknesses found in the 2023 plans of Bank of America, Goldman Sachs (GS - Free Report) , JPMorgan Chase and Citigroup had been satisfactorily addressed. Notably, the Bank of New York Mellon and Morgan Stanley also received resolution plan feedback letters.
What Are “Living Wills”?
The Dodd-Frank legislation, passed in 2010, mandated that banks of a certain size create these plans regularly, outlining how they could be wound down in the event of a crisis without endangering the larger financial system. This mandate was part of the steps taken in the wake of the 2008 financial crisis.
These mandates are meant to show regulators that large banking organizations can be resolved quickly and orderly if they face material financial distress or failure. The largest and most complex banking organizations must file these plans every other year, while other large domestic and foreign banks generally file every three years.
Why Regulatory Clearance Matter for Banks
The latest sign-off indicates that regulators are more comfortable with how major banks plan to handle a potential failure scenario. For investors, this may help reduce concerns about near-term regulatory penalties, forced structural changes or additional compliance burdens tied to resolution planning.
The decision also supports confidence in financial stability. The 2008 financial crisis showed how the failure of a large financial institution can create stress across the banking system and capital markets. Living wills are designed to limit that risk by ensuring that large banks have credible plans to wind down operations without causing wider disruption.
For banks such as JPMorgan Chase, Bank of America, Citigroup, Wells Fargo and Goldman Sachs, the clearance is a constructive development. It removes a regulatory overhang and highlights progress in areas that had previously drawn scrutiny.
Bottom Line
The Fed and the FDIC’s latest feedback marks a favorable regulatory milestone for major U.S. banks. While no resolution plan can guarantee that the failure of a large financial institution would be painless, the agencies’ review indicates that the latest plans are credible and free of identified shortcomings or deficiencies. For major U.S. banks, including JPM, BAC, C, GS and WFC, the approval signals progress in crisis-readiness and strengthens confidence in the resilience of the financial system.
Currently, BAC carries a Zacks Rank #2 (Buy), while JPM, WFC, GS and C have a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.