US regulator proposes rule changes for banks with more than $100 billion in assets

By Ovunc Kutlu

ISTANBUL (AA) - The Federal Deposit Insurance Corporation (FDIC) proposed rule changes Thursday for American banks with more than $100 billion in assets amid risky activities.

"The proposal would replace current requirements that include the use of banking organizations’ internal models for credit risk and operational risk with standardized approaches and replace the current market risk and credit valuation adjustment risk requirements with revised approaches," the regulator said in a statement.

It also wants to introduce minimum requirements for large banks' certain securities financing transactions, and intends to revise market risk requirements that would apply to banks with significant trading activities.

"Large banking organizations’ minimum risk-based capital requirements would be the higher of risk-weighted assets as measured under the expanded risk-based approach or the generally applicable risk-based rule," it said.

The proposal will include a three-year transition period beginning July 1, 2025, it added.

The move comes after the sudden collapse of three banks in the world's biggest economy -- Silicon Valley Bank and Signature Bank in March, followed by First Republic Bank in May.

The FDIC, which provides insurance to depositors at US commercial and savings banks, proposed in May that big banks recover the cost associated with protecting uninsured depositors.