FDIC staff floats plans to end bank debt guarantee

WASHINGTON, Sept 9 (Reuters) - U.S. bank regulators on Wednesday proposed two alternatives to phase out a government program that guarantees some debt issued by banks, according to a proposal from the staff of the Federal Deposit Insurance Corp.

The FDIC staff proposed to put out for public comment one approach that would have the program expire on Oct. 31, as planned. It also proposed to have it expire on that date but to establish a limited six-month emergency guarantee program that would be available in extreme circumstances.

The board of the FDIC will vote shortly on the proposal.

The FDIC established the guarantee program in October to boost confidence in the banking industry, add more liquidity and reduce the risk of bank runs. (Reporting by Karey Wutkowski, editing by Gerald E. McCormick)