The Federal Deposit Insurance Corporation and the Federal Reserve jointly failed the plans, commonly called "living wills", of Bank of America Corp (>> Bank of America Corp), Bank of New York Mellon Corp (>> Bank of New York Mellon Corp), J.P. Morgan Chase & Co (>> JPMorgan Chase & Co.), State Street Corp (>> State Street Corp) and Wells Fargo & Co (>> Wells Fargo & Co).

The three remaining large, systemically important banks – Goldman Sachs Group Inc (>> Goldman Sachs Group Inc), Morgan Stanley (>> Morgan Stanley) and Citigroup Inc (>> Citigroup Inc) – did not fare much better, but sidestepped potential sanctions as they were not given joint determinations.

The following is a summary of the deficiencies highlighted by the regulators and the amendments the asked for to the "living wills" at each of the eight banks:

WELLS FARGO:

Governance:

Wells Fargo's resolution planning governance is deficient, which put into question if the bank could execute its "living will".

Operational:

The lender has to identify all critical services necessary to support its material entities and regional units.

Legal Entity Rationalization:

The plan lacks clarity on whether the bank's legal structure could facilitate the execution of its strategy.

MORGAN STANLEY:

Liquidity:

Morgan Stanley does not have an appropriate model and process for estimating and maintaining sufficient liquidity at, or readily available to, its material entities.

Derivatives and trading activities:

The plan should include hedging costs associated with actively winding down its trading portfolio and provide more details on the size and composition of the portfolio.

Governance Mechanisms:

A shortcoming was found regarding the governance mechanisms necessary to facilitate a timely execution of the planned funding and recapitalizations of certain material entities.

GOLDMAN SACHS:

Liquidity:

Goldman's plan does not detail the specific level of liquidity needed by each material entity to operate.

Derivatives and trading activities:

The plan lacks details regarding the winding down of its derivatives portfolio.

Governance Mechanisms:

The mechanisms necessary to facilitate a timely execution of the planned funding and recapitalizations of subsidiaries was identified as a shortcoming.

Operational:

The bank needs to conduct a preparedness test to ensure that operational aspects of a resolution could be carried out in a timely manner.

JPMORGAN:

Liquidity:

JPMorgan does not have appropriate models and processes for estimating and maintaining sufficient liquidity at, or readily available to, its material entities.

Legal Entity Rationalization:

The bank should provide specific analysis regarding the recapitalization under a range of failure scenarios.

Derivatives and trading activities:

The company's trading activities are deficient.

Governance Mechanisms:

The bank has not demonstrated adequate governance mechanisms for the timely execution of its resolution strategy.

BANK OF AMERICA:

Liquidity:

BofA does not have a suitable model and process for estimating and maintaining sufficient liquidity at, or readily available to, its material entities.

Governance Mechanisms:

The plan does not include triggers to inject capital and liquidity into the bank's material entities.

Derivatives and trading activities:

The firm's plan to wind down its derivatives portfolio was found to be deficient.

CITIGROUP:

Governance Mechanisms:

The regulators identified a shortcoming regarding Citigroup's governance mechanisms necessary to facilitate a timely execution of the planned funding and recapitalization of its subsidiaries.

Derivatives and trading activities:

A shortcoming was found in the bank's plan to wind down derivatives positions in its non-core businesses.

Liquidity:

The plan does not indicate that the company had developed a process to fully estimate the amount of minimum operating liquidity.

BANK OF NEW YORK MELLON:

Operational:

The bank's strategy to address continuation of critical operations in resolution is deficient.

Legal Entity Rationalization:

The bank's legal entity structure has deficiencies.

STATE STREET:

Operational:

The bank needs to identify all critical services and maintain a mapping of how and where these services support its core business lines.

Legal Entity Rationalization:

The plan must include an adequate framework for determining when the benefits of resolution planning outweigh increasing complexity.

Capital:

The methodology used to determine the capital needed by material entities at the point of resolution to support the execution of the resolution strategy is deficient.

Liquidity:

The bank does not have a proper model and process for estimating its liquidity needs to fund material entities.

(Reporting by Nikhil Subba in Bengaluru; Editing by Savio D'Souza)