US to unveil plan to regulate regional banks in case of failures - Breaking The News
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US to unveil plan to regulate regional banks in case of failures

EPA-EFE/ETIENNE LAURENT

US banking regulators presented a plan on Tuesday to force regional banks to issue debt to cover depositors in case of future failures, according to a joint statement from the Department of the Treasury, Office of the Comptroller of the Currency (OCC), Federal Reserve (Fed), and Federal Deposit Insurance Corporation (FDIC).

Under the plan, all US banks with at least $100 billion in assets would be subject to the new requirement, which forces them to maintain a long-term debt that would absorb losses in the event of a government seizure.

The move would include measures to increase banks' long-term debt levels, remove a loophole that allows midsize banks to avoid recognizing declines in bond holdings, and force banks to file stronger living wills.

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