JPMorgan Chase & Co., Bank of America Corp. and three other major U.S. banks failed to persuade regulators they could go bankrupt without disrupting the broader financial system and could now face a tighter leash from Washington after government agencies used one of the most significant post-crisis powers bestowed under the Dodd-Frank Act.
The banks — also including Wells Fargo & Co., Bank of New York Mellon Corp. and State Street Corp. — must scrap their resolution plans, or living wills, after the Federal Reserve and the Federal Deposit Insurance Corp. said versions submitted last year failed to satisfy their requirements. The lenders will have until Oct. 1 to rewrite the plans — but under the pressure that another failure would give regulators power to subject them to more capital or liquidity constraints on their businesses.
Continue reading: Five Big Banks’ Living Wills Are Rejected by U.S. Regulators
Related story: Wall Street’s Fraud of the Week Club – A $5.1 billion fraud settlement from Goldman Sachs, a $1.2 billion fraud agreement with Wells Fargo – and that’s just from the past week. Over the last several years banks have paid an estimated $200 billion in fraud fines and settlements. How many settlements, how many billions, will it take to convince some fact-resistant pundits and politicians that there is an epidemic of fraud on Wall Street?