Understanding Banking Resolution Planning: Your Guide to Compliance

Effective banking resolution planning is a key part of today’s banking regulatory landscape following the 2008 Financial Crisis. With the October 1, 2025 resolution plan date fast approaching, banks must demonstrate robust strategies to prevent banks failure and ensure smooth recovery during crises.

What Is a Banking Resolution?

A banking resolution is a formal document or plan that defines authority and responsibilities in banking operations or financial distress. It serves different purposes depending on the context: 

• Corporate Banking Resolution: Businesses—whether corporations or LLCs—use this document to assign authority to specific individuals for banking operations, such as opening accounts, authorizing withdrawals, signing checks, or applying for loans. It provides banks with official proof of authority and ensures transparent financial governance. 

• Regulatory Banking Resolution (Living Will): Financial institutions create this roadmap to outline how they would manage distress. It ensures continuity of critical operations, protects depositors and creditors, and minimizes risks to financial stability, including reducing potential taxpayer-funded bailouts. 

In simple terms, it answers: 

• What is a banking resolution? – A plan or document that defines authority for banking operations and/or specifies how a bank manages financial distress. 

• What is a corporate bank resolution? – A framework that outlines who within a company is authorized to act on financial matters, safeguarding stakeholders and maintaining smooth operations.

Banking Resolution for Businesses 

In addition to regulatory resolution planning, banking resolutions are formal documents used by businesses—corporations or LLCs—to assign authority for banking operations. 

These resolutions typically: 

• Specify which members, directors, or officers can manage bank accounts, authorize withdrawals, or sign checks. 

• Define the powers of each authorized individual, including temporary authorizations when needed. 

• Provide banks with official proof of authority to open accounts, apply for loans, or handle transactions. 

• Require signatures from the relevant company officials to ensure legal validity. 

Banking resolutions help reduce confusion, prevent disputes, and enable companies to maintain transparent financial governance, especially during leadership changes or when opening new accounts. 

The term banking resolution can refer to two distinct contexts: 

• For Businesses: A corporate document assigning authority to specific individuals to handle banking operations. 

• For Regulatory Authorities: A “living will” that outlines how a bank would manage financial distress to protect depositors, creditors, and financial stability. 

Components of a Banking Resolution 

A well-structured banking resolution should include: 

• Title of the Document: Clearly indicates that it is a banking resolution for the company. 
• Statement of Board Agreement: Confirm that members or directors have convened and approved the resolution. 
• Authorized Individuals: List who is permitted to perform banking operations. 
• Specific Powers: Define whether they can withdraw funds, view accounts, or take loans. 
• Validity Period: Indicate if the resolution is temporary or remains until replaced. 
• Signatures: Ensure all relevant board members or LLC members sign to validate the document. 

Regulatory Framework and Challenges

Resolution planning isn’t just about internal strategy or standard risk management – it’s a regulatory mandate. Key regulations include:

• FDIC Resolution Planning: Banks with assets over $100 billion must comply with strict FDIC guidelines.
• Recovery and Resolution Planning Regulations: Enforced under the Dodd-Frank Act, these rules ensure that banks have clear, actionable recovery strategies.

Key Components of Effective Resolution Planning

For recovery and resolution planning banks, these elements are essential:

• Risk Identification: Detect hidden contractual risks—such as clauses that trigger automatic termination or cross-default provisions—that may derail recovery plans.
• Data Accuracy: Streamline the review process to reduce manual errors and ensure all contract details meet compliance standards.
• Operational Efficiency: Leverage advanced technologies to simplify contract management and reporting, making compliance more manageable.

Leveraging AI for Better Compliance

Modern AI-native contract management platforms, like Sirion’s, are transforming resolution planning by:

• Automating Risk Detection: Quickly scanning contract portfolios to pinpoint high-risk clauses.
• Enhancing Data Extraction: Ensuring critical information is captured accurately for FDIC and Dodd-Frank reporting.
• Streamlining Negotiation: Reducing contract turnaround time and aligning agreements with evolving regulatory guidance.

Learn More

Our white paper, “Resolution Planning Readiness: Enhancing Compliance with AI-Native Contract Intelligence,” offers actionable insights and real-world examples from institutions like BNY Mellon and Raiffeisen Bank International. Download it today to discover detailed resolution planning guidance and safeguard your institution from unforeseen risks.

Embrace the future of compliance—download our white paper and transform your approach to resolution planning!