(Adds detail on wills, background)
By Alexandra Alper and Emily Stephenson
WASHINGTON, Oct 4 (Reuters) - State Street Corp and Bank of New York Mellon Corp have submitted their living wills to banking regulators, the Federal Reserve announced on Thursday.
The plans give regulators a road map for dismantling the firms if they become insolvent and are aimed at easing concerns that some banks are so big and complex that their failure could destabilize the financial system.
The wills were mandated by the 2010 Dodd-Frank law, which sought to limit risk in the financial system, after risky trades at major Wall Street firms led to multi-billion dollar taxpayer bailouts and disruptive bankruptcies.
Nine of the largest U.S. banks submitted their plans by a July deadline, including Bank of America Corp and Citigroup Inc .
Regulators said they had received the State Street and BNY Mellon living wills by an Oct. 1 deadline.
Different sized banks have different deadlines for submitting the plans. All banks, with at least $50 billion in assets will have to submit plans by December, 2013.
A portion of the wills are made public, while another part is kept confidential to allay banks' concerns that regulators could divulge proprietary information to competitors.
Most banks have used the public section to highlight the strength of their portfolio and underscore the unlikelihood of failure.
"State Street believes that its strong capital position, high-quality assets and fee-based business model make it unlikely that a severe idiosyncratic event leading up to a loss in asset value, a run on deposits or other liquidity crises would occur," the bank said in the public portion of its living will.
BNY Mellon said that most of its revenue comes from recurring fees and that the bank is not substantially exposed to credit risk.
"This helps BNY Mellon maintain a strong, highly liquid balance sheet with a solid capital position and strong credit ratings," the bank said. "Our highly liquid balance sheet would allow us to withstand deposit run-off without systemic impact."
The living will rules, which were finalized in October 2011, give the banks a series of chances to refine their plans. But if banks cannot come up with feasible liquidation plans, regulators could order the banks to get rid of businesses.
The plans that the banks submit will also help regulators revise their own resolution plans for large institutions, which are meant to guide the Federal Deposit Insurance Corp if it has to unwind a financial giant on its own rather than go through a bankruptcy proceeding.
The FDIC has said it expects about 125 banks to submit plans. There are about 7,300 banks in the United States.
(Reporting By Alexandra Alper and Emily Stephenson; Editing by Gerald E. McCormick and Tim Dobbyn)
Keywords: LIVING WILLS/FED