The four major banks, namely Citigroup, JPMorgan Chase, Goldman Sachs, and Bank of America, were criticized by regulators for their living will plans.

• Four of the eight largest American lenders have weaknesses in their resolution plans, according to banking regulators who disclosed this on Friday.
• In 2023, the Federal Reserve and the Federal Deposit Insurance Corporation determined that the living wills of Citigroup, JPMorgan Chase, Goldman Sachs, and Bank of America were insufficient.
• Wall Street contracts tied to stocks, bonds, currencies or interest rates were found to have flaws in the unwinding plans of each bank's massive derivatives portfolios, according to regulators.

Four of the eight largest American lenders have weaknesses in their resolution plans, according to banking regulators who disclosed this on Friday.

In 2023, the Federal Reserve and the Federal Deposit Insurance Corporation determined that the living wills of , , , and were insufficient.

Each of the banks' plans to unwind their massive derivatives portfolios was found to have flaws by regulators. These contracts are tied to financial instruments such as stocks, bonds, currencies, and interest rates on Wall Street.

The regulators found that Citigroup was unable to unwind its contracts using different inputs than those chosen by the bank during a quick test. This part of the exercise seems to have caught all the banks that struggled with the exam.

Citigroup's ability to manage its derivatives portfolio under different conditions than those outlined in the 2023 plan was assessed by regulators, who found that the company's capabilities have significant limitations.

The living wills are a crucial regulatory exercise required after the 2008 global financial crisis. Every other year, the largest US banks must submit their plans to credibly unwind themselves in the event of a catastrophe. Banks with weaknesses must address them in the next wave of living will submissions due in 2025.

The FDIC deemed Citigroup's plan to have a more serious "deficiency" than JPMorgan, Goldman, and Bank of America's plans, meaning that the plan wouldn't allow for an orderly resolution under U.S. bankruptcy code.

The Fed disagreed with the FDIC's evaluation of Citigroup, resulting in a "shortcoming" classification.

Citigroup, based in New York, stated that they are fully committed to resolving the concerns raised by their regulators.

"Although we have made significant advancements in our transformation, we have recognized the need to speed up our efforts in specific areas," the bank stated. "On a broader scale, we remain optimistic that Citibank could be resolved without causing any negative systemic effects or requiring government bailouts."