FDIC pushes rival bank regulators to get tough-WSJ
NEW YORK (Reuters) - The Federal Deposit Insurance Corp is pushing other U.S. government agencies to more forcefully downgrade their confidential ratings of troubled financial institutions, The Wall Street Journal said on Tuesday, citing people familiar with the talks.
Confidential ratings assess institutions' financial positions, based on capital adequacy, asset quality, management quality, earnings, liquidity and sensitivity to market risk. They are known as "Camels" ratings, based on the first letters of these six factors.
The ratings go on a scale of one to five, where one is the highest. Banks rated four or five go onto the FDIC's list of "problem" lenders, the newspaper said.
The FDIC wants regulators to issue more fours and fives, in part because each bank failure diminishes the insurance fund it uses to back consumer deposits, the newspaper said, citing people familiar with the matter.
If the FDIC gets its way, there could be more public enforcement actions, and the agency could gain more power to force lenders to improve their balance sheets or seek buyers, the newspaper said.
But regulators with primary responsibility for the lenders, including the U.S. Treasury Department's Office of Thrift Supervision, are showing resistance, the newspaper said.
As of March 31, the FDIC had put 90 banking institutions with $26.3 billion of assets on its "problem list." The list did not include IndyMac Bancorp Inc IDMC.PK, a California lender that regulators seized last month.
(Reporting by Jonathan Stempel; Editing by Lisa Von Ahn)
