The White House is planning as soon as this week to recommend tougher rules for midsize banks, according to people familiar with the matter, after the collapse of two lenders earlier this month sent tremors through the banking system, the Wall Street Journal reported. The recommendations are expected to call for new rules from the Federal Reserve and other agencies, including for banks with $100 billion to $250 billion in assets. The Fed is already rethinking a number of its rules related to those banks after Silicon Valley Bank and Signature Bank failed. Options include tougher capital and liquidity requirements, as well as steps to strengthen annual “stress tests” that assess banks’ ability to weather a hypothetical severe downturn. The recent worries about U.S. banks have centered on regional lenders that are perceived to be at risk of customers pulling deposits. Both SVB and Signature had large amounts of uninsured deposits — or customers with more than the standard deposit-insurance cap of $250,000 per depositor. President Biden has called for Congress to toughen penalties on bank executives deemed responsible for financial institutions failing. The White House hasn’t coalesced around additional recommendations for congressional action, the people said. The Washington Post earlier reported some of the details of the administration’s planned recommendations.Read more. (Subscription required.)
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