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March 6, 2014

RBS to cut US assets to ease legal burden

Royal Bank of Scotland is set to become the latest European bank to sharply pare back its US business in response to new rules from the Federal Reserve.”

“The UK lender is planning to more than halve the assets in its broker-dealer operation in New York in order to pull assets below the $50bn threshold at which the toughest part of the new regime bites.”

“The move comes as Deutsche Bank draws up plans to slash its US assets by up to a quarter, largely through reassigning operations to Europe or Asia.”

“The Fed confirmed last month that overseas lenders operating in the US would have to ringfence capital in the country to safeguard against future crises.”

“The foreign banking organisation regime, which comes into force in the second half of the decade, will require banks with more than $50bn of assets to set up a holding company and comply with tough capital and leverage requirements.”

Altogether around 100 foreign banks, in addition to 24 US bank holding companies, will be subject to some of the US measures.”

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Read full Financial Times article here.

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