Banks Fight Each Other as Fed Mulls New Rules After Failures

US banks are pitted against each other as regulators move to strengthen oversight after a series of failures undermined confidence in the financial system.

In particular, regional banks, which are more likely to face new rules, are trying to convince regulators to increase oversight of larger ones — which may have to cover a larger portion of the costs of bailouts. Meanwhile, members of Congress facing public anger over wealthy depositors being made whole are less amenable than ever to lobbying pitches for weaker regulation.

The lack of a unified message, entrenched differences and competing priorities mean that the financial ...