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GAO calls on regulators to improve transparency in living will reviews

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GAO calls on regulators to improve transparency in living will reviews

The Government Accountability Office called on the FDIC and theFederal Reserve to improve transparency and timeliness in processes used to reviewresolution plans filed by companies.

A GAO study released April 12 revealed that while progress hasbeen made in refining and assessing the resolution plans, regulators have failedto disclose their frameworks for determining whether a plan is , as well as the criteria forreducing plan requirements for smaller companies.

According to the GAO, a lack of such information by regulatorscould undermine public and market confidence in resolution plans.

Meanwhile, the agency also found that the annual filing cyclefor companies may not be feasible as regulators took an average period of nine monthsto complete their reviews, which does not provide companies sufficient time to revisetheir plans to incorporate regulatory feedback.

Additionally, in interviews with the GAO, regulators told theagency that they were incurring costs to review the plans, while companies alsoclaimed that complying with the rule had raised their costs.