The Federal Deposit Insurance Corporation on Monday took the first step toward a new rule meant to make it easier for the agency to close failed big banks without risking a financial panic.
The rule would be intended to improve the banks’ record-keeping relating to their FDIC-insured deposits, making it easier for the agency to sort out which deposits were covered by the insurance and ensure that customers had access to the funds the day after the failure.
“Timely access to insured deposits is critical to maintaining public confidence in the banking system,” FDIC chairman Martin Gruenberg said Monday.
The FDIC has been responsible for insuring bank deposits and resolving failed banks since its creation in the Great Depression.
More recently, the FDIC was tasked by the 2010 Dodd-Frank financial reform law for carrying out the resolution authority for winding down failed big banks granted to regulators by the law.
Gruenberg said that requiring big banks to more clearly spell out which deposits where insured and subject to the $250,000 per depositor insurance limit would be part of the larger work of ensuring that the agency has the capability to shutter failed big banks without a replay of the financial crisis.
The potential rule would only apply to banks with enough accounts that sorting them could complicate the FDIC’s resolution process, which is meant to allow depositors to access funds the next business day.
Gruenberg suggested that it might only apply to banks with more than 2 million accounts, which would include up to 37 businesses.
Banks have 90 days to comment before the FDIC moves forward on a rule.
