Wells Fargo 2012 Annual Report Download - page 97

contemplated an effective date of January 1, 2013, with phased
in compliance requirements, the rules have not yet been
finalized by the U.S. banking regulators due to the volume of
comments received and concerns expressed during the comment
period. These proposals did not address the BCBS capital
surcharge for G-SIBs, although the FRB has indicated it expects
to adopt regulations implementing the G-SIB surcharge in 2014
and that the surcharge would be imposed on a phased-in basis
from 2016-2019. In late 2011, the FRB finalized rules to require
BHCs with $50 billion or more of consolidated assets to submit
capital plans annually and to obtain regulatory approval before
making capital distributions. The rule also requires a capital
adequacy assessment under a range of expected and stress
scenarios. For additional information, see the “Capital
Management” section of this Report.
“Living Will” Requirements
In late 2011 the FRB and the FDIC approved final resolution-
plan regulations as mandated by the Dodd-Frank Act. These
regulations will require large financial institutions, including
Wells Fargo, to prepare and periodically revise plans that would
facilitate their resolution in the event of material distress or
failure. As contemplated by the Dodd-Frank Act, resolution
plans are to provide for a rapid and orderly resolution –
liquidation or orderly restructuring – under the Bankruptcy
Code and other insolvency statutes applicable to particular types
of regulated entities (such as securities broker-dealers or
insurance companies). Under the regulations, resolution plans
must contain detailed strategic analyses of how a distressed or
failing institution could be resolved in a way that does not pose
systemic risks to the U.S. financial system. Under the rules,
Wells Fargo is required to submit its resolution plan to the FRB
and FDIC on or before July 1, 2013.
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