OVERSEAS BANKS TO FACE US RULES NYT’s Pete

OVERSEAS BANKS TO FACE US RULES

NYT’s Peter Eavis: “One of the biggest loopholes on Wall Street may soon close. More than three years ago, Congress passed a sweeping overhaul of the financial system that was supposed to leave no big bank untouched. Staggeringly, though, half of the large banks on Wall Street are able to avoid crucial parts of the overhaul — simply because they are foreign. In particular, the overseas banks — Barclays, Deutsche Bank and Credit Suisse among them — have not had to comply with parts of the overhaul … Now, however, the American authorities appear poised to snatch that advantage away. … The Fed … which regulates banks, is expected to complete rules soon that will force large foreign banks to abide by many of the requirements their American counterparts have had to operate under …

“The foreign banks are not pleased with the crackdown. The Fed first proposed the foreign bank rules at the end of 2012 and, as is its practice, invited the industry and the public to provide feedback. The Fed received strongly worded letters in opposition from a handful of large foreign lenders … In the face of such criticism, it is possible the Fed will end up substantially softening its rules. But senior executives at the foreign banks said they did not expect much in the way of dilution.”