“The Federal Reserve hit foreign banks operating in the U.S. with new rules meant to force many to hold more capital. It is a significant move, even if the Fed did pull a punch or two.

“Foreign banks had fought the proposed rules, a final version of which the Fed approved Tuesday. Among those expected to be most affected are Germany’s Deutsche Bank and Barclays of the U.K., due to their sizable U.S. capital-markets operations.

“The Fed rightly pressed ahead, noting that undercapitalized U.S. units of foreign banks had to turn to it during the financial crisis for billions of dollars in emergency funding. The Fed also said the new rules would create “a level playing field between foreign and U.S. banking organizations.”

“Among the most contentious areas: requirements that big foreign banks meet minimum leverage-ratio requirements, effectively capping the amount of borrowed money they can use. The Fed rejected arguments to scrap this, but did give foreign banks more time to comply: about 2 1/2 extra years.

“At the same time, the Fed appeared to give the foreign-banking units a lower bar to clear. They will face a 3% minimum leverage requirement under new Basel rules, while the biggest U.S. banks are likely to face a threshold of at least 5%. And the Fed changed the final version of the rule so fewer big foreign banks would be affected.”

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