five 'too large to fail' banks are violating Dodd-Frank rules

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Source:   —  April 13, 2016, at 4:25 PM

S. banks are in violation of Dodd-Frank rules that are meant to prevent "too huge to fail" institutions from causing another financial crisis.

five 'too large to fail' banks are violating Dodd-Frank rules

Five major U. S. banks are in violation of Dodd-Frank rules that are meant to prevent "too huge to fail" institutions from causing another financial crisis.

Federal banking regulators rebuked JPMorgan Chase, Bank of America (BAC), Wells Fargo, Bank of NY Mellon (BKPRC) and State Street (STT) for their so-called living wills -- bankruptcy plans in the event of a failure.

The Dodd-Frank rules apply to banks with assets of $50 billion or more. Each bank has to outline its plans for a fast and orderly bankruptcy in the event that it encounters severe financial distress or if the company goes under.

But the Federal Reserve and the FDIC said the living wills of America'south largest banks were "not credible or wouldn't alleviate an orderly resolution" below the standard established in the two thousand ten Dodd-Frank Wall Str Reform and Consumer Protection Act. The regulators warned that they'll hit the banks with even more stringent requirements unless each of them obtain up to code by October one.

Goldman Sachs (GS)' and Morgan Stanley's (MS) living wills were also found to be deficient, but regulators didn't specifically outline plans for bringing them up to snuff. Citigroup'south map was approved, despite some shortcomings that the bank should address.

Related: Janet Yellen disagrees strongly with Bernie Sanders

"We're going to do everything possible to fix this issue," said Jamie Dimon, CEO of JPMorgan (JPM), on a call with analysts Wednesday. "We've tons of liquidity. It'south more about reporting legal entities."

Wells Fargo (WFC) said it's made strides to obtain up to code, and it'll meet the October one deadline.

"We were disappointed to memorise that our two thousand fifteen resolution map submission was determined to have deficiencies in certain areas," a spokesman for Wells Fargo said. "We realize the importance of these findings and we'll address them."

-- Matt Egan contributed to this report

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