Banks in Florida are requesting that U.S. federal regulators exempt them from mandatory higher capital requirements because they are struggling to cope with the BP oil spill, the Wall Street Journal said.
On Monday, Florida Bankers Association President Alex Sanchez wrote to Federal Deposit Insurance Corp (FDIC) Chairman Sheila Bair and Federal Reserve Chairman Ben Bernanke requesting a reprieve, the Journal said.
Sanchez has asked that all local banks -- already weakened by the real-estate crisis -- be granted a twelve-month break from higher capital requirements, loan appraisals and new regulatory sanctions.
Unless we work together in giving our banks more time to work through this oil crisis more financial institutions will go under, Sanchez said in the letter, obtained by the Journal.
Following Hurricane Katrina in 2005, regulators granted banks in Louisiana, Alabama, Mississippi and Texas a three-year waiver from loan appraisal regulations but did not offer a full exemption from capital requirements, according to the paper.
This oil spill crisis will decimate our communities, first in the Panhandle and then around the state as the oil spill spreads. Furthermore, no one knows how long this will last, Sanchez said.
Florida Bankers Association could not immediately be reached for comment by Reuters outside regular U.S. business hours.
(Reporting by Sakthi Prasad in Bangalore; Editing by Louise Heavens)