Financial Times FT.com

Small lenders criticise FDIC scheme

By Saskia Scholtes in New York

Published: November 21 2008 01:29 | Last updated: November 21 2008 01:29

The Federal Deposit Insurance Corporation may on Friday revise a $1,400bn programme to guarantee bank debt on concerns the scheme could undermine the market for overnight loans between banks and unfairly disadvantage community lenders.

In more than 300 comment letters filed in response to the FDIC’s proposed rules, banks argued that the terms of the agency’s plan were too complex, too expensive and overly punitive for institutions that chose not to participate.

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