A group of President Biden-appointed bank regulators are considering new rules to require large regional banks to add to financial cushions that could be called on in times of crisis. The steps under consideration include requirements that the regional firms raise long-term debt that can help absorb losses in case of their own insolvency, according to three people familiar with the matter, extending a slimmed-down version of requirements that at present apply only to the largest U.S. megabanks. The most likely path for achieving these new requirements is through a formal rule-making process led by the Federal Reserve, the prospects for which banks and their trade groups are already beginning to fight on the grounds that the measure is unneeded and that their costs outweigh any benefits.
