US regulators require 3 foreign banks to address flaws in crisis plans

Three foreign banks have been required by the U.S. regulators to address their shortcomings in their resolution plans, or bankruptcy plans.
According to a joint statement released by the U.S. Federal Reserve and the U.S. Federal Deposit Insurance Corporation (FDIC) on Monday, the plans submitted by the U.S. units of the BNP Paribas, HSBC Holdings, and the Royal Bank of Scotland Group showed shortcomings.
The shortcomings include unrealistic or inadequately supported assumptions about the likely behavior of customers, counterparties, investors, central clearing facilities and regulators, and inadequate analysis regarding interconnections with the firms.
Banking organizations with total consolidated assets of 50 billion U.S. dollars or more are required to draw up the resolution plans, known as living will, which describe how they can go through ordinary bankruptcy without the help of taxpayer support in the event of material financial distress or failure of the company.
The FDIC found the three firms' plans are "not credible" and do not facilitate an orderly resolution under the U.S. bankruptcy code. The Fed said the three banks should take immediate actions to improve their resolvability and reflect improvement in their 2015 plans.
The regulators said they expect to take regulatory actions if these firms do not address the shortcomings before Dec. 31, 2015.