Bond obligation for local banks in the US

Local banks in the U.S. will likely have to issue bonds to comply with new regulations in the country, according to a study by Bloomberg Intelligence, but even the additional capital provided may not prevent future bankruptcies. Eighteen regional banks may need to issue $63 billion in new bonds to comply with rules from the Federal Deposit Insurance Corp., the Fed and the Office of the Comptroller of the Currency, the study by BI analysts Arnold Kakuda and Nicholas Beckwith found. The regulations were drafted by the three agencies to protect financial institutions after a series of regional bank failures that began in March. Under the new rules, banks with assets of $100 billion or more will be required to issue enough long-term debt to cover capital losses in times of intense stress; these requirements previously applied only to large financial institutions.