The Federal Deposit Insurance Corp. pressed institutions Tuesday to rein in risky funding strategies such as brokered deposits.
In a letter to state-chartered banks, the agency said healthy institutions using noncore liabilities to fund growth in risky ways should expect heightened attention from examiners and could face higher deposit insurance premiums.
The FDIC also said banks with already low supervisory ratings that are overusing risky liabilities need a plan to limit growth that uses more stable funding sources.
"Heavy reliance on noncore funding sources can increase a bank's liquidity risk profile, reduce an institution's franchise value and increase the FDIC's resolution costs in the event of failure," Sandra L. Thompson, the FDIC's director of supervision and consumer protection, wrote in the letter.
The FDIC has already called on institutions to limit brokered funding, and it has complained that recent failures of institutions with heavy noncore growth boosted the agency's resolution costs.
