The FDIC board today unanimously approved an advance notice of proposed rulemaking (ANPR) requiring the largest insured depositories to establish an array of new systems so that the FDIC can quickly identify and segregate insured deposits, covering those and letting the marketplace or resolution protocol handle recoveries by uninsured depositors. A series of complex issues arise with regard to brokered funds, pass-throughs, and related instruments for this to occur as desired, so the FDIC is taking a gradual approach and seeking extensive comments on it. Nevertheless, as Vice Chair Hoenig said today, the rule could promote resolution under the Bankruptcy Code because the FDIC would not face an unknown body of liabilities that might be eligible for protection. Depositors might also be more aware of their risk status if additional disclosures or other procedures accompany this new management-information system.

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