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February 18, 2014

Fed to Issue Final Rules for Foreign Banks

Foreign banks with a major presence on Wall Street will no longer be allowed to avoid many of the tougher rules that the United States introduced after the financial crisis to prevent banking failures and bailouts.

“The Federal Reserve, a leading bank regulator, issued a final rule on Tuesday that will force the American operations of foreign banks to follow many of the same rules as American banks. The Federal Reserve Board is expected to approve the rule at a meeting Tuesday afternoon.

“Foreign banks lobbied against the rule, which was first proposed in 2012, arguing that their own regulators already had sufficient oversight over their global operations. Critics of the rule also contended that it would prompt foreign banks to reduce their activities in the United States, damaging the American economy.

“But in writing its final rule, the Fed kept many of the elements that angered foreign banks, making only a few concessions. “The requirements applicable to foreign banking organizations with a large U.S. presence are an essential part of regulatory reform in the aftermath of the financial crisis,” Daniel K. Tarullo, the Fed governor who oversees regulation, said in a statement.”

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Read full NY Times article here

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