WASHINGTON (Reuters) – US regulators proposed large banks pay higher fees if they engage in risky activities, introducing a new "scorecard" said to better predict how institutions will fare in economic downturns.

The Federal Deposit Insurance Corp said the more risk-sensitive system would determine fee levels for deposit insurance for banks with more than $10 billion in assets, a little over 100 banks currently.

The new fees could be in place as soon as next year. "The proposed system is fairer and less pro-cyclical because it charges for risk when it is assumed, and it provides incentives for institutions to avoid excessive risk during economic expansions," FDIC Chairman Sheila Bair said.

The FDIC board yesterday also extended the crisis-era Transaction Account Guarantee (TAG) programme by six months to the end of this year, to ensure that community banks still relying on the government backing do not lose business accounts to larger banks that could be seen as more stable.