“One of the biggest loopholes on Wall Street may soon close.
“More than three years ago, Congress passed a sweeping overhaul of the financial system that was supposed to leave no big bank untouched. Staggeringly, though, half of the large banks on Wall Street are able to avoid crucial parts of the overhaul — simply because they are foreign.
“In particular, the overseas banks — Barclays, Deutsche Bank and Credit Suisse among them — have not had to comply with parts of the overhaul, known as the Dodd-Frank Act, that aim to strengthen the financial buffer, or capital, that banks must maintain to absorb potential losses on loans and trades.
“Supporters of the foreign bank rules, however, respond that it will remove a huge competitive advantage that some European banks have enjoyed for many years. Under the rule, they will now have to hold capital at their American operations that is roughly equivalent to that of their American rivals. “All this does is create a level playing field for banks operating in the United States,” said Dennis M. Kelleher, president of Better Markets, a group that has pressed for stronger curbs on the banking industry.”
Read Full NY Times Article Here