Subprime lenders suffer credit losses at twice the rate that traditional consumer lenders do and should be required to set aside more capital, said Federal Deposit Insurance Corp. Chairman Donna A. Tanoue.

In perhaps her toughest speech since joining the agency in May 1998, Ms. Tanoue said the FDIC will recommend changing the risk-based capital system to reflect the hazards associated with subprime lending high-rate loans to borrowers with tainted credit histories. She said the FDIC has already asked several subprime lenders to raise capital.

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