U.S. bank regulators approved the “living will” plans of four foreign-based banks but pointed to shortcomings that the banks should address in next year’s plans.

Under the Dodd-Frank Act, large banks are required to detail how they could be unwound in bankruptcy without disrupting the broader financial system. If regulators do not find such a resolution plan, or living will, credible, they could impose restrictions on a bank’s activities or even order it to divest.

The Federal Reserve and Federal Deposit Insurance Corp. on Thursday signed off on the plans of Barclays, Credit Suisse, Deutsche Bank, and UBS, finding they did not have “deficiencies” that could lead to more stringent capital and liquidity requirements on the firms.

But the regulators did fault the banks for shortcomings, including weaknesses in how each of the firms communicates and coordinates between its U.S. operations and its foreign parent in stress.

Additionally, Credit Suisse had a shortcoming related to estimating the liquidity needs of its U.S. intermediate holding company in a resolution.

The firms must address the shortcomings in their next resolution plans, which are due July 1, 2020.

“Since the 2007 financial crisis, the four firms have improved their resolvability by significantly reducing the size and risk profiles of their U.S. operations and increasing their capital and liquidity levels,” the agencies said in a news release. “At the same time, the resolvability of firms will change as both the firms and markets continue to evolve. The agencies expect the firms to remain vigilant in assessing their resolvability.”

FDIC Chairwoman Jelena McWilliams indicated last month that regulators are developing proposals to simplify and ease the requirements of the resolution plans.

“Resolution plans have been a valuable tool,” she said at a banking conference. “At the same time, the process has imposed meaningful cost and burden on the firms and, frankly, the agencies.”

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