5 The proposed restrictions are a key step toward GSIB resolvability because the rapid unwinding of a GSIB’s qualified financial contracts could destabilize the financial system by causing asset fire sales and toppling other firms. Acting in conjunction with the FDIC, the Federal Reserve Board has also sought to increase GSIB resolvability through its review of the firms’ living wills.
In April this year, the Board and the FDIC announced the results of their review of the eight U.S. GSIBs’ 2015 resolution plans, which evaluated the plans based on the firms’ capital, liquidity, governance mechanisms, operational capabilities, legal entity rationalization, derivatives and trading activities, and responsiveness to prior agency feedback.