WASHINGTON — The Federal Deposit Insurance Corp. can exercise broad power over any bank that uses its program to temporarily guarantee debt and zero-interest deposits, according to an interim rule the agency released Thursday.

Under the rule, the FDIC may conduct on-site reviews of any participating institution and may levy a special premium across the industry if the program ends up costing the government money. FDIC officials said the Temporary Liquidity Guarantee program was necessary to help stabilize financial markets.

"There are signs … that steps we have taken so far are already starting to have an effect," FDIC Chairman Sheila Bair said at a board meeting.

The agency plans to work with primary federal regulators to ensure the program is not abused. Comptroller of the Currency John Dugan and Scott Polakoff, the deputy director of the Office of Thrift Supervision, who both supported the rule, said their agencies would provide the FDIC with whatever it needs.

"We will use our well-established protocols to ensure that the FDIC is able to monitor and verify compliance with the program in the participating banks we supervise," Mr. Dugan said. "We will not hesitate to take appropriate enforcement action in instances where it's determined that a participating bank violates the terms and requirements of the program."

The FDIC reserved the right to approach institutions directly if necessary.

"Any final decision regarding the parameters, eligibility, and continued participation in the TLG Program remains with the FDIC," the rule said. "By issuing debt that is guaranteed under the TLG Program, the eligible entity consents to be bound by the parameters of the TLG Program.

This consent acknowledges the FDIC's authority over the program and agreement to provide relevant information and to permit on-site reviews as needed after consultation with the appropriate federal banking agency to determine compliance with the terms and requirements."

The FDIC outlined which bank debt is eligible for the program, saying unsecured borrowings must include a written agreement between the issuer and the debt holder and a promise by the issuer to pay a fixed principal amount, in full, on demand or by a certain date. The debt cannot be subordinate to any other liability.

FDIC officials also said its guarantee travels with the bank debt if it is sold into the secondary market. That had been an issue for some investors, who were unclear.

The FDIC launched the program Oct. 14 in conjunction with the Treasury Department's announcement that it would invest capital directly in financial institutions. The FDIC program covers all financial institutions free of charge for a 30-day period, after which banks may opt out of the debt guarantee or added coverage for deposits that do not bear interest.

The agency said Thursday that institutions have until Nov. 12 to inform the FDIC about a decision to quit either component of the program. All entities that are part of a bank or thrift holding company are required to make the same decision about whether to stay.

If a firm opts out of either program, that information will be made publicly available.

"The FDIC will maintain and will post on its Web site a list of those entities that have opted out of either or both components of the TLG Program so that possible lenders and transaction account depositors can tell when an entity has taken itself outside the program," the agency said.

It put the plan forward under its authority to take extraordinary measures when the agency determines — with concurrence from the administration and the Federal Reserve Board — that banking conditions pose systemic risk.

To remain in the program, banks must pay fees: 75 cents for every $100 of unsecured debt that is guaranteed, and a 10-basis-point surcharge on all deposits covered above the standard insurance limit of $250,000 per account. (The surcharge is added to the premium a bank typically pays for deposit coverage.)

Under the program, unlimited coverage of transaction accounts will last until the end of next year. The debt portion of the plan covers senior unsecured debt — including promissory notes, commercial paper, and interbank funding — issued between Oct. 14 and June 30.

The coverage will last until June 30, 2012, even if the debt matures after that date.

The agency said it would cover eligible unsecured debt in an amount up to 125% of its face value. Higher coverage may be granted on a case-by-case basis.

Under the deposit insurance component of the plan, coverage will protect traditional checking accounts that allow unlimited deposits and withdrawals at any time, but not NOW or money market deposit accounts.

The agency said the coverage plan will be available for both depository institutions and holding companies that issue debt, and the FDIC will extend the debt coverage to other affiliates on a case-by-case basis after a written request.

The rule will be open for comment for 15 days after it is published in the Federal Register.

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