The Federal Deposit Insurance Corporation (FDIC) has been accused of perpetuating a ‘gigantic’ bank bailout scheme, as the agency’s Board of Directors approved a proposed rule to strengthen resolution planning for large banks.
The rule, which would require banks with at least $100 billion in assets to submit comprehensive resolution plans every two years, has sparked controversy and criticism from critics who claim it will only serve to further enrich the banking elite at the expense of the average American.
The FDIC’s proposed IDI Planning Rule would strengthen the existing IDI resolution planning requirements under 12 CFR § 360.10, requiring banks with total assets of at least $100 billion to submit comprehensive resolution plans to provide additional optionality to support the FDIC’s efficient and effective resolution of a large IDI under the Federal Deposit Insurance Act.
Under this proposal, banks with total assets of at least $50 billion but less than $100 billion would submit more limited informational filings to provide the FDIC with critical information to assist in their potential resolution. These institutions would not be required to develop a resolution strategy as part of their submissions.
The FDIC Board also joined other federal bank regulators to approve the following additional actions today: a joint notice of proposed rulemaking to require IDIs with total assets of $100 billion or more to issue and maintain a minimum amount of long-term debt (LTD) that can be used to absorb losses in the event of their failure.
Comments on the proposal are due by November 30, 2023, and the first submissions would be expected in early 2025. The proposed rule has sparked widespread criticism, with many accusing the FDIC of attempting to create a ‘too big to fail’ culture that will only serve to further concentrate wealth and power in the hands of the banking elite.
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Key Facts
- Agency: FDIC
- Category: Fraud & Financial Crimes
- Source: Official Source â†â€â€ÂÂ
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