MBCA, which consists of banks with assets of up to $100 billion, has sent letters to U.S. Treasury Secretary Janet Yellen, the Fed, the Office of Money Control (OCC) and the FDIC.
In its letter, MBCA asked federal regulators to extend FDIC insurance to cover all deposits over the next 2 years, arguing that this was necessary so as not to result in more deposit outflows from banks.
The MBCA also said the regulation would stabilize the banking sector and reduce the likelihood of further bank bankruptcies.
Pointing out that the banking sector is generally healthy, but trust in banks other than large banks is declining, MBCA emphasized that trust in the sector should be restored.
MBCA said the outflow of deposits would accelerate if another bank went bankrupt.
Crisis concern in the banking sector
Last week, the bankruptcy of Silicon Valley Bank (SVB), the 16th-largest bank in the United States, was one of the largest bank bankruptcies since the 2008 global financial crisis. Following the SVB, New York-based Signature Bank also went bankrupt.
The U.S. Treasury Department, the Fed and the FDIC have announced that depositors in bankrupt banks will have access to all of their money.
The difficulties of Credit Suisse, Switzerland's second-largest bank, and the difficulties experienced by the US's First Republic Bank also caused concerns about the banking crisis.