US Rejection Of Wall Street 'Living Wills' Ratchets Up Pressure On Too-Big-To-Fail Banks

U.S. bank regulators struck a major blow against some of the largest banks in the country Wednesday, rejecting the so-called living wills of JPMorgan Chase & Co., Bank of America, Wells Fargo, State Street and Bank of New York Mellon. The banks' resolution plans, which outline how systemically important financial institutions would navigate a bankruptcy without splintering the financial system or costing taxpayers, have become a central focus of bank reformers since the 2010 Dodd-Frank Act authorized regulators to judge the submissions. The failing grades at five of the nation's eight largest banks reveal newfound consensus between the two regulators responsible for the assessments, the Federal Reserve and the Federal Deposit Insurance Commission, which had diverged in previous rounds of analysis. The stricter judgments released Wednesday are likely to add momentum to advocates of big-bank breakups, such as presidential hopeful Sen. Bernie Sanders of Vermont and Sen. Elizabeth Warren, D-Mass. "No firm yet shows itself capable of being resolved in an orderly fashion through bankruptcy," said FDIC Vice Chairman Thomas Hoenig in a statement.