U.S. Federal Reserve on Wednesday adopted tough new rules for foreign banks to protect U.S. taxpayers from possible costly payments for assistance programs that often make non-US financial institutions.The largest foreign banks that have assets at $ 50 billion or more, will have to create an intermediate holding company, which will be subject to the same standards for capital and liquidity risk management as the US banks.
Fed ceased to rely on the fact that foreign regulators will supervise their banks after the financial crisis of 2008, during which the U.S. central bank had to issue emergency loans to foreign banks on hundreds of billions of dollars.
"This rule reduces the likelihood that banking organizations, experiencing problems in different jurisdictions, will have to choose which of the operations support." Fed said in a statement.
Foreign banks, which make large-scale operations on Wall Street, such as Deutsche Bank and Barclays, strongly opposed the new Fed plan, because it means that they have to transfer the costly capital from Europe.
The purpose of this reform is to allay the fears that American taxpayers will have to pay, if European and Asian regulators, saving one of their banks, would consider their American divisions unimportant.
"The most important contribution that we can make to the global financial system is to ensure the stability of the U.S. financial system." said Fed’s representative Dan Tarullo at the council meeting, where the organization unanimously voted for the new rule.
According to the Federal Reserve, from 15 to 20 foreign banks will be forced to create intermediate holding companies as the permitted amount of U.S. assets in their ownership was increased to $ 50 billion from the originally proposed $ 10 billion.
The Fed also gave foreign banks a year to adapt to the new standards