WASHINGTON (Reuters) - The new draft of the "Basel Endgame" bank capital hikes still has problems, in particular around how the rule would assess banks' market risks, Federal Deposit Insurance Corporation Vice Chair Travis Hill said at a Washington event on Monday.

The FDIC, Federal Reserve and Office of the Comptroller of the Currency have been working together to re-draft the rules after intense industry pushback, but divisions among some key officials have delayed a move to formally re-issue the new draft for public feedback, Reuters and other media outlets reported earlier this month.

Those reports, said Hill, who holds one of five votes on the FDIC board, voiced concerns about the process and substance of the Basel re-proposal, citing a person familiar with the matter.

Hill appeared to confirm those reports on Monday, noting that while the new draft had significant improvements, including by more closely tailoring banks' capital requirements to their riskiness, the draft "still has problems."

In particular, he said it over-capitalizes risks posed by fluctuations in the market to the point of making banks' trading activities "uneconomical."

He added that he did not know when the regulator would vote on re-proposing the rule.

(Reporting by Michelle Price; Editing by Mark Porter)