WASHINGTON, April 24 (Reuters) - Wells Fargo & Co has presented the Federal Reserve with a satisfactory plan on how to unwind its business in case of bankruptcy, the U.S. central bank said on Monday.
The resolution plan, or “living will”, is required of the nation’s largest banks and is meant to help prevent a future financial crisis.
In December, the Fed and Federal Deposit Insurance Corporation notified Wells Fargo that the bank’s plan fell short. In its Monday announcement, the regulators said Wells Fargo has “adequately remedied the deficiencies.”
Living wills for banks were conceived in the wake of the 2008 financial meltdown when the downfall of several Wall Street banks sent shockwaves through global markets.
U.S. taxpayers had to prop up banks that were deemed “too big to fail” and Congress vowed that such a rescue would not happen again. (Reporting by Patrick Rucker; Editing by Meredith Mazzilli and Sandra Maler)