FDIC: Banks must get ‘serious’ about bankruptcy plans

The July deadline for U.S. banks to show regulators how they can go through bankruptcy without causing wider mayhem or risk being broken up is a crucial test for the industry, a top U.S. regulator said on Wednesday.

In a wide-ranging interview at the Reuters Financial Regulation Summit, Tom Hoenig, second-in-command at the Federal Deposit Insurance Corporation, said that he was broadly behind regulatory relief provided to smaller banks in a bill introduced this week by U.S. Senator Richard Shelby, the chairman of the Senate Banking Committee.

But he criticized the Alabama Republican’s efforts to reform the Federal Reserve, also part of the bill.

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