Foreign banks hoping Fed's upcoming decision on inter-bank loans won't disadvantage them

12 June 2018 7:13am
Foreign banks with US operations will be watching to see how the Federal Reserve responds this week to their contention that they would be disproportionately affected by proposed inter-bank loan restrictions aimed at improving financial stability.

The Fed said on Thursday it will consider a final standard to limit large banks’ credit exposure to each other so that problems at one institution won’t reverberate throughout the financial sector and ultimately the economy.

Letters from institutions including Credit Suisse and Mitsubishi UFJ have argued that foreign banking organizations, or FBOs, would be treated more harshly under the 2016 proposal than would their large US competitors.