Recently, the FDIC Office of Inspector General released a report entitled, “FDIC Readiness to Resolve Large Regional Banks,” which evaluated the FDIC’s preparedness to resolve large regional bank failures under the Federal Deposit Insurance Act, focusing on the period prior to Spring 2023 (when three large banks failed).
The report concluded that the FDIC’s readiness was not “sufficiently mature to facilitate consistently efficient response efforts in a potential crisis failure environment.” Further, at the time that three large banks failed in Spring 2023, the FDIC had not adequately met its human and technology resource needs nor sufficiently coordinated resources among its divisions and offices. This resulted in the FDIC not fully satisfying readiness activities, including planning, training, exercises, evaluation, and monitoring, which are outlined in its Crisis Readiness and Response Framework.
To address these issues, the report makes 11 recommendations, such as improving interdivisional coordination of resources, completing or revising resolution guidance, plans, and agreements to address significant gaps ensuring regular training of key resolution staff, and implementing a process to periodically assess resolution readiness. The FDIC concurred with these recommendations and plans to complete all actions by June 30, 2026.
