It follows a tumultuous spring for regional banks in which Silicon Valley Bank and two other lenders collapsed, forcing regulators to backstop deposits to stave off a broader panic.
The proposal, which is subject to industry feedback, would see banks raise their long-term debt issuance by roughly 25%, or $70 billion, according to the FDIC.
The agency said banks would have three years from the rule's adoption to meet the new standard.
'COMPELLING CASE'Each bank's debt requirement will be based on their risk-weighted assets, total assets, or total leverage, depending on which number is highest.
In a speech previewing the proposals this month, Gruenberg said recent bank failures made "a compelling case" for regulators to impose tougher rules on regional firms.
Persons:
Brian Snyder, Martin Gruenberg, Matthew Bisanz, Mayer Brown, “ It’s, Greg Baer, Gruenberg, Ian Katz, Pete Schroeder, Megan Davies, Philippa Fletcher, Andrea Ricci
Organizations:
First Republic Bank, REUTERS, Rights, Federal Deposit Insurance Corporation, Federal Reserve, Wall, Bank, FDIC, Financial Services Group Inc, Fifth Third Bancorp, Citizens Financial Group Inc, Industry, Bank Policy Institute, Silicon Valley Bank, JPMorgan Chase, FDIC's, Insurance Fund, Capital Alpha Partners, Thomson
Locations:
Boston , Massachusetts, U.S, Silicon