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U.S. bank regulators to vote on final stress test rule

Oct 9 (Reuters) - U.S. bank regulators are set to vote on aplan requiring banks with more than $10 billion in assets toconduct annual stress tests to determine if they can withstand afinancial shock.

The board of the Federal Deposit Insurance Corp will voteTuesday on the plan, which was modified from an earlier proposalto give smaller banks more time before they must begin testing,according to FDIC staff.

Stress tests are intended to demonstrate how banks wouldcope with a crisis and are part of a more rigorous testingregime mandated by the 2010 Dodd-Frank financial oversight law.The largest U.S. banks face several such regulatory tests.

Under the plan, FDIC-regulated banks with more than $10billion in assets would run the tests each year according tostress scenarios provided by regulators. The results will helpregulators gauge the health of the banking industry and identifysteps banks must take to strengthen their operations.

Banks with between $10 and $50 billion in assets will haveuntil 2013 before they must begin stress testing, and they willhave an additional year after that before they must publiclydisclose the results of annual tests, the FDIC said.

Larger banks will begin testing this year, the FDIC said.

The FDIC initially proposed its rules in January. TheFederal Reserve and the Office of the Comptroller of theCurrency are finishing similar rules for the banks theyregulate.

(Reporting By Emily Stephenson; editing by John Wallace)

((Emily.Stephenson@thomsonreuters.com)(202 354 5823))

Keywords: FINANCIAL REGULATION/STRESS