1:12 AM
Fri Oct 8, 2010 3:29am EDT
(Reuters) - The U.S. banking regulator is expected to propose new rules for seizing and dismantling large financial firms on the verge of collapse, the Wall Street Journal reported, citing people familiar with the government plans.
The Federal Deposit Insurance Corp (FDIC), as part of a proposed rule, was expected to say all creditors of large, non-bank financial firms should expect losses in a failure, the WSJ said.
The rules, which could be unveiled as early as Friday, will be part of a broader effort to end the era of "too big to fail" financial institutions, the WSJ said.
The FDIC, which is in the process of voting on the proposed rule, was expected to say that in some instances, certain short-term creditors could expect to get additional payments, the newspaper said.
The FDIC could not be reached for comment.
(Reporting by Sakthi Prasad in Bangalore; Editing by Dan Lalor)
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