Fed and FDIC find no flaws in 15 big banks' living wills, including PNC, Truist and U.S. Bancorp

The Federal Reserve Board and the Federal Deposit Insurance Corporation said on Tuesday that they found no shortcomings or deficiencies in the resolution plans filed in October 2025 by 15 banking organizations with more than $250 billion in assets. The joint announcement also said a shortcoming identified in BNP Paribas's 2021 plan has been satisfactorily addressed.

Resolution plans, known as living wills, are required under the Dodd-Frank Act. Each one sets out how a large bank could be wound down through ordinary bankruptcy without a taxpayer rescue and without causing serious damage to the U.S. financial system.

Who was reviewed

The agencies published individual letters for five firms: American Express, Barclays, BNP Paribas, Deutsche Bank and UBS. A template letter covered the other ten: Bank of Montreal, Mizuho, Mitsubishi UFJ, Northern Trust, PNC, Royal Bank of Canada, Sumitomo Mitsui, Toronto-Dominion, Truist and U.S. Bancorp.

Two details in the template are worth noting. For seven of the ten (Bank of Montreal, Northern Trust, PNC, Royal Bank of Canada, Toronto-Dominion, Truist and U.S. Bancorp), the plans also described how the firm would resolve its insured bank subsidiary, the entity that holds customer deposits. And Royal Bank of Canada changed its preferred U.S. approach from a single point of entry, where only the top holding company fails, to a multiple point of entry strategy, in which separate U.S. units could be resolved individually.

The BNP fix took nearly four years

The one open item from earlier reviews was at BNP Paribas. According to the agencies' letter to the bank, a December 15, 2022 review of its 2021 plan found that it did not explain how its repurchase agreement activity, including daily trading, settlement and risk management, would keep running if its U.S. broker-dealer failed. The 2025 plan shifts most of that work to affiliates in a failure so it can continue. The agencies accepted the fix, closing a gap that stayed open for almost four years.

Repo is the overnight borrowing market that funds large amounts of Treasury holdings. A dealer whose repo book could freeze in a failure is precisely the kind of risk the rule exists to catch, which is why the agencies singled it out.

What a clean letter does and does not mean

The obvious reading is that these banks are safer. That overstates it. A clean living-will letter is a judgment about planning: whether a firm has a credible, documented way to fail in an orderly fashion. It is not a capital test or a view on the quality of a bank's loans; capital is examined separately, in the Fed's stress tests.

For a business owner with an operating account or credit line at PNC, Truist or U.S. Bancorp, the practical meaning is narrow but real: regulators have signed off on the plan for how the insured bank would be handled if the parent failed, which is the scenario that determines how quickly deposits and payment services keep working. Deposit insurance limits are unchanged by the review.

All 15 firms must file targeted plans on or before July 1, 2028. The agencies may tell them what extra information to include at least 12 months before that date.

Sources: Federal Reserve Board press release; BNP Paribas feedback letter; template letter for Category II and III firms. This is market information, not investment advice.