By Jonathan Davies

The Royal Bank of Scotland (RBS) and HSBC have had their crisis plans criticised by regulators in the US.

The US Federal Reserve and Federal Deposit Insurance Corp (FDIC) said the banks must improve their so-called "living wills" or face regulatory action.

The French bank BNP Paribas was also criticised over its plans.

The regulators said all three banks fell short of what is required and that "significant progress" is needed. The FDIC was much stronger in its wording, describing their plans as "not credible".

Banks operating in the US are required to set-up these so-called 'living wills' to demonstrate how they would survive without the need for a taxpayer funded bailout in the event of another financial crisis.

Under the 2010 Dodd Frank Act, which launched the 'living wills', US regulators can shut down or split a banks operations in the US.