In Depth: Acting Comptroller Hsu Discusses Resolution Plans For Large Regional Banks

In remarks made at the Wharton Financial Regulation Conference, Acting Comptroller Hsu hit on a familiar theme of financial stability but raised a new variation by discussing the financial stability impacts that the failure of a large regional bank could cause and large regional banks' resolvability. He noted that the country has made good strides in the resolvability of the eight U.S. Global Systemically Important Banks ("GSIBs"), but commented that a gap may exist for larger regional banks. He also noted that four large regional, non-GSIB banks each hold more than $500 billion in assets currently.

Acting Comptroller Hsu posed the question of how those large regional banks would be resolved if they were to fail. He noted that a purchase and assumption by one of the eight U.S. GSIBs could be a likely plan given past precedent, and that such a transaction would likely be successful at resolving the immediate failure of the large regional banks and stopping any