Regulators push for increased debt issuance by regional banks to mitigate potential losses
Regulators have proposed new rules requiring regional banks with at least $100 billion in assets to issue long-term debt to cover potential losses in the event of failure, aiming to prevent systemic risks. This comes after the collapse of several mid-sized lenders earlier this year, which resulted in estimated losses of over $30 billion to the FDIC's Deposit Insurance Fund. The proposal also includes the strengthening of resolution plans for these banks. However, concerns have been raised about the potential increase in funding costs and the demand for the additional bank debt in the market.
