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US FDIC to propose new bank resolution, long-term debt rules on Aug. 29

2023-08-23 08:19
WASHINGTON U.S. bank regulator the Federal Deposit and Insurance Corporation (FDIC) will on Aug. 29 propose new rules
US FDIC to propose new bank resolution, long-term debt rules on Aug. 29

WASHINGTON U.S. bank regulator the Federal Deposit and Insurance Corporation (FDIC) will on Aug. 29 propose new rules overhauling how large regional banks prepare for their own failure, according to a notice published late on Tuesday.

U.S. regulators are seeking to strengthen oversight of the banking system, particularly in light of a string of collapses this year that included three of the largest in U.S. history.

The proposal will likely require banks of $100 billion or more in assets to issue long-term debt that could absorb bank losses before depositors and the FDIC's deposit insurance fund do, FDIC Chair Martin Gruenberg said in a speech this month.

It will also require bank recovery and resolution plans, also known as "living wills," to give the FDIC more options when overseeing a failed bank's receivership, including by identifying parts of the lender that could be sold separately.

(Reporting by Michelle Price; Editing by Christopher Cushing)