Fed should drop liquidity plan for foreign banks' US branches, Japan says

26 June 2019 9:25pm
The US Federal Reserve should scrap a draft proposal for extending liquidity rules to foreign banks’ US branches because they already receive sufficient oversight, Japanese authorities said.

“We have been scrupulous in monitoring Japanese banking groups’ financial conditions and liquidity risk on a global basis,” said the Bank of Japan and Japan’s Financial Services Agency, which oversees the banking, securities and insurance sectors. “Furthermore, US and Japanese authorities have closely cooperated in supervising both US and Japanese banks.”

The letter last week added that foreign banks use the American dollar globally, not just in the US, so that their liquidity management worldwide could be hindered by the Fed plan.