The Federal Reserve and the other federal banking agencies on Friday released resolution plan feedback letters covering 15 large banking organizations, the latest chapter in the long-running fight over whether America's biggest banks can actually be wound down without a taxpayer bailout.
Resolution plans, commonly called "living wills," are the blueprints mega-banks must file laying out how they would be restructured or liquidated under bankruptcy if they failed. The feedback letters published by the agencies tell each institution whether regulators found its plan credible, where it fell short, and what it must fix before the next filing cycle. The Fed did not disclose which specific deficiencies were flagged at which firms beyond what appears in the letters themselves.
The release lands amid renewed scrutiny of the resolution planning regime from financial analysts. Risk.net published an analysis one day before the letters dropped arguing that watering down resolution plans is a bad idea, noting bluntly that "bank failures are inevitable; banking crises are not." That framing matters: the entire point of living wills is to make sure the second half of that sentence stays true even when the first half plays out.
What the letters actually say varies bank by bank. Some institutions received relatively clean reviews. Others were told to shore up their assumptions about liquidity, funding, derivatives portfolios, or the operational mechanics of separating businesses mid-crisis. The agencies have historically used these letters to pressure firms into fixing weaknesses before a real emergency exposes them — a process that ran quietly for years until the 2023 regional banking crisis put resolution planning back on the front page.
It is not yet known whether any of the 15 organizations received a joint finding of a "shortcoming" — the most serious designation short of outright failure to remediate — or whether the agencies issued any new guidance alongside the letters.
Critics of the too-big-to-fail framework have long argued that resolution plans are theater: elaborate documents that let megabanks claim they can fail safely while everyone involved knows a real crisis would end at the same place it always does — a government backstop. Supporters counter that the planning process forces banks to simplify their corporate structures and hold more loss-absorbing capital, making an orderly wind-down at least plausible.
What is clear from Friday's release is that the regulatory apparatus is still grinding through its post-2023 review cycle. The agencies are, in effect, grading homework while the biggest banks continue to grow. That is the tension running underneath every one of these letters: the institutions being asked to plan for their own demise are the same institutions whose failure would trigger exactly the kind of systemic panic the plans are supposed to prevent.
Our Take
Here's the uncomfortable truth nobody at the Fed will say out loud: the too-big-to-fail problem was never solved. It was papered over. Living wills are a compliance exercise dressed up as reform, and the proof is that not one of these 15 banks has been restructured into something that could actually fail without dragging the whole economy down with it.
Think about what a resolution plan really is. It's a bank writing a detailed instruction manual for its own funeral — and then handing that manual to the same regulators who spent decades guaranteeing the funeral would never happen. If JPMorgan or Citi or Bank of America ever actually needed to execute one of these plans in a panic, does anyone honestly believe the federal government would stand back and let the chips fall? Of course not. We'd get the same weekend of emergency meetings, the same blank-check backstops, the same "systemically important" excuses.
The 2023 regional bank collapses proved the point. Silicon Valley Bank wasn't even a megabank and it still took extraordinary federal intervention to stop the bleeding. So when the Fed publishes feedback letters telling a $3 trillion institution to tighten up its derivatives assumptions, understand what's really happening: regulators are managing optics, not risk.
Meanwhile, the real fix — breaking up the giants, ending implicit guarantees, letting bad management eat the losses instead of depositors and taxpayers — stays permanently off the table. Too many powerful people in Washington and on Wall Street depend on the current arrangement.
So read these letters if you want. But don't confuse a stack of regulatory homework with a solution. Until a major bank can fail without a bailout, the living will is a fiction — and the American people are still on the hook. Patriots, that's not a banking policy. That's a promise that the next crisis gets socialized just like the last one.
Want real reform? Start asking why "too big to fail" is still a phrase in the year 2026.
