The MBCA, whose members are banks with assets of up to $100 billion, has sent letters to US Treasury Secretary Janet Yellen, the US Federal Reserve, the Office of Money Control (OCC) and the FDIC.

In its letter, the MBCA asked federal regulators to extend FDIC insurance to cover all deposits for the next 2 years, arguing that this was necessary to prevent further deposit outflows from banks.

MBCA also said the regulation would stabilize the banking sector and reduce the possibility of more bank failures.

Noting that the banking sector is generally healthy, but confidence in non-large banks has declined, MBCA stressed that confidence in the sector must be restored. MBCA said that if another bank fails, the outflow of deposits will accelerate.

CRISIS CONCERN

Last week, the failure of Silicon Valley Bank (SVB), the 16th-largest bank in the United States, was one of the largest since the 2008 global financial crisis. After SVB, New York-based Signature Bank, also went bankrupt.

The US Treasury Department, the Federal Reserve and the FDIC announced that depositors of failed banks would have access to all their money.

The difficulties experienced by the US First Republic Bank with the difficulties of Credit Suisse, the second largest bank in Switzerland, also raised concerns about the banking crisis. (AA)