February 18, 2014

Foreign banks braced for Fed rule changes

“The biggest foreign banks in the US are bracing for new regulatory rules that will govern their structure and demand tougher capital requirements, in a move aimed at helping them withstand a future crisis.

“The Federal Reserve on Tuesday is set to finalise the rules which will hit Barclays, Deutsche Bank, Credit Suisse, UBS and others, subjecting them to stress tests, and capital and liquidity ratios that are based on US standards.

“European banks have argued the new rules will put them at a disadvantage to their US counterparts, who can calculate their capital requirements based on their entire global operations while the largest foreign banks will be assessed on their US assets only.

“An intense campaign by bank lobbyists appears to have fallen on deaf ears. The Global Financial Markets Association sent a letter to the Fed, seen by the Financial Times, arguing that the new rules would “exacerbate, rather than mitigate, these financial stability risks and harm the global economy”.

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Read full Financial Times article here

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