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On living wills verdict: Wells Fargo 'disappointed,' Citi 'pleased'


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On living wills verdict: Wells Fargo 'disappointed,' Citi 'pleased'

Wells Fargo& Co. is "disappointed" with the Federal Reserve'sand the FDIC's determinationsthat its 2015 resolution plan was "not credible," while was "pleased"with the regulators' ruling on its plan.

"We were disappointed to learn that our 2015 resolutionplan submission was determined to have deficiencies in certain areas," WellsFargo said in an April 13 press release. The bank added that it views thefeedback as "constructive and valuable" to its resolution planningprocess.

On the other hand, Citi CEO Michael Corbat said the companyis pleased that the regulators did not find any deficiencies in its resolutionplan. "We will address the feedback we received from the Fed and FDIC andare committed to continuing to strengthen Citi's resolution planningcapabilities," he said in an April 13 press release.

Citigroup's resolution plan was found to have shortcomingsthat it must address, but neither regulator found the plan to be "notcredible."

Meanwhile, Fitch Ratings Managing Director Christopher Wolfesaid that he found it "surprising" that Wells Fargo did not pass thetest with regulators on living wills, noting that the company previouslyreceived a pass. In addition, he found it "interesting that Citi was theonly major bank to pass as the FDIC and Fed had differing conclusions on someof the banks."

Aside from Wells Fargo, the Fed and the FDIC found that theliving wills of Bank of AmericaCorp., JPMorgan Chase& Co., Bank ofNew York Mellon Corp. and StateStreet Corp. were "not credible or would not facilitate anorderly resolution under the U.S. Bankruptcy Code." The companies willhave to update their plans by Oct. 1.

State Street did not express disagreement with theregulators' findings in a press release, but did note: "Given our strongfinancial position and capital ratios, we remain confident in the strength andresiliency of our business."

BNY Mellon acknowledged the regulators' feedback, and saidit is "committed to addressing the issues raised within the requiredtimeframe," according to a press release.