FDIC Chairman Martin Gruenberg today echoed concerns by Acting Comptroller of the Currency Michael Hsu about financial stability risks posed by large domestic banks that are not global systemically important banks, although Gruenberg didn’t say whether he supports Hsu’s suggestion of creating a new regulatory category for those institutions.
Hsu this week said that banking agencies may want to consider creating a heightened regulatory and supervisory framework for “systemically important” domestic banks like that in place for GSIBs. Asked about the suggestion during a press conference, Gruenberg pointed to the FDIC’s recent final rule creating resolution plan requirements for banks with more than $100 billion in assets. He also pointed to proposed rulemaking creating a long-term debt requirement for those same banks.
“Those two things… are really important steps to take,” he said. “And they go to the underlying point that the [acting] comptroller made, which was that these institutions, even if they don’t have the cross-border operations of the so-called GSIBs, are of sufficient size and consequence that they can really be of systemic significance if they get into difficulty.”
