Agencies Request Comment on Proposed Rule to Require Large Banks to Maintain Long-Term Debt to Improve Financial Stability and Resolution — 2023-08-29

Federal bank regulatory agencies today requested comment on a proposal that would require large banks with total assets of $100 billion or more to maintain a layer of long-term debt, which would improve financial stability by increasing the resolvability and resiliency of such institutions. This proposal follows an advance notice of proposed rulemaking issued in October 2022 by the Federal Reserve and the Federal Deposit Insurance Corporation that looked at several possible changes, including a long-term debt requirement to promote more orderly resolutions for large banks. The recent failures of three large banks have underscored the importance of supplementary, loss absorbing resources that regulators can use to resolve banks in a way that reduces costs and risk of disruption to the banking system.