Bloomberg is reporting that as part of new standards for the nation’s largest banks being drafted by the Federal Reserve, U.S. units of foreign lenders may be required by regulators to comply with tougher capital rules that some banks sought to skirt.
Bloomberg said that foreign lenders can choose whether to create U.S. bank holding companies. Those units were exempt from capital standards as long as their parent firms were well-capitalized.
The Fed provided $538 billion of emergency loans to the U.S. units of European banks during the financial crisis, almost as much as it did to U.S. firms. That increased political pressure on lawmakers and regulators to tighten rules for all, Bloomberg notes.
To read the full Bloomberg story,
click here.