Fed's regional-bank relief draws concerns about cross-border metric

31 January 2019 5:58pm
The US Federal Reserve’s measure of cross-jurisdictional activity in a proposal to relax Dodd-Frank Act requirements has emerged as a point of contention among banks and public-interest groups.

The provision would still expose mid-size banks with less than $700 billion in assets to current liquidity and stress-test standards if they participate in at least $75 billion in cross-border activity.

“Cross-jurisdictional activity can affect the complexity of a banking organization and give rise to challenges that may complicate the resolution of such a banking organization if it were to fail,” the Fed’s October proposal said.

In a crisis, a bank with heavy cross-border activity could be impeded by different jurisdictions’ rules from shifting resources to a trouble spot if needed, it said.