The Biden administration is urging authorities to tighten regulations on midsize banks. It will be a new measure to deal with the banking crisis that led to the bankruptcy of two US regional banks.
The White House announced Wednesday that it has called on several federal banking regulators to implement a series of changes aimed at tightening regulation. None of the measures require parliamentary approval.
Deregulation of banks may have gone too far, might be a cause of crisis – U.S. Treasury Secretary (1)
The changes include the reinstatement of rules targeting banks with assets between $100 billion and $250 billion. These include liquidity requirements, stronger stress tests, and a “living will” (business liquidation plan in the event of bankruptcy). That’s the size of the failed Silicon Valley Bank (SVB).
The White House supports a policy of not requiring regional banks to raise the level of insurance funds to rescue uninsured deposits of two failed U.S. banks, SVB and Signature Bank. He called on the Federal Deposit Insurance Corporation (FDIC) to expand the fund without burdening regional banks.
FDIC to Waive Smaller Banks to Protect Deposits, Lawmakers Sue in Hearings
A White House official who briefed reporters on the policy of the Biden administration said the final decision rests with individual regulators. However, he said that he had consulted with each authority in advance to prepare the proposal.
Original title:White House Proposes Tougher Banking Rules Following Crisis (1)(excerpt)
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