The Federal Reserve's rules announced yesterday will affect European banking firms such as
"As the financial crisis demonstrated, the sudden failure or near failure of large financial institutions can have destabilising effects on the financial system and harm the broader economy," Fed chairwoman
"As the crisis highlighted, the traditional framework for supervising and regulating major financial institutions and assessing risks contained material weaknesses. The final rule addresses these sources of vulnerability."
The regulations will require foreign banks to meet the requirements on capital, debt levels and annual "stress tests". Foreign banking organisations with US non-branch assets of more than
The holding companies will be subject to the same risk-based and leverage capital standards applicable to US bank holding companies.
The new rules have been resisted by the EU. "We will not be able to accept discriminatory measures which would have the effect of treating European banks worse than US ones," said
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