Better Markets, a nonprofit group, said in a letter to the Federal Deposit Insurance Corporation this week that increasing data collection on U.S. bank deposits would improve financial stability, but such a move would It continues to face resistance from across the board.
Better Markets, which advocates for a “safer financial system for all Americans,” is a comment launched by the FDIC in July on whether more detailed and frequent reporting to regulators on bank deposits could strengthen financial stability. He was responding to the request.
The FDIC’s move follows the high-profile failures of Silicon Valley Bank and Signature Bank in 2023, in which concentration of bank funds and uninsured deposits were seen as key factors. U.S. banks are currently not required to provide comprehensive data on the composition of insured and uninsured deposits.
“Currently, most banks’ publicly available financial data only includes estimates of the insured and uninsured share of total deposits,” Shayna Olesiuk, director of banking policy at Better Markets, said in a statement. No,” he said.
“The result is limited and incomplete information about financial risks, particularly those arising from risky and volatile uninsured deposits.”
More detailed and frequent reporting on deposit types is expected to alleviate concerns about financial stability, safety and soundness, said Max Bonnici, a lawyer at law firm Venable.
“Organizing and standardizing these records and reporting them to the FDIC and other federal banking agencies could be helpful in the event of a bank failure or financial or non-financial stress,” he said. said.
Banks and other interested parties have until December 6 to share their comments with regulators.
Separately, in July, the FDIC issued stricter rules to banks regarding the use of brokered deposits (high-value funds obtained through third-party intermediaries), which are considered to be more interest-rate sensitive and less stable than personal deposits. Suggested detailed disclosure.
In the wake of the 2023 U.S. banking crisis, the FDIC aims to allow banks to accurately report the level of brokered deposits in their financial statements. Regulators say banks can choose to raise deposits from third parties in the event of liquidity problems, further widening potential losses in the event of a failure.
“This is an opportunity for the industry and regulators to work on common standards, especially as the U.S. deposit landscape is changing through partnerships between banks and fintechs and other technology companies,” Bonnici told The Banker. spoke.
However, the proposed changes have already received a lukewarm response from the industry. The American Bankers Association and other industry groups called for the proposal to be withdrawn in August, saying it would have a “material impact on bank financing” and “disrupt business arrangements made under existing rules.” .
For these specific brokered deposit rules, the FDIC this week extended the comment period from October 22nd to November 21st.
