By Dow Jones Business News, February 22, 2013, 12:55:00 PM EDT
Fed Slows Move on Foreign-Bank Regulation
--Federal Reserve gives banks and the public until April 30 to weigh in on foreign-bank regulation plan
--The comment period's 30-day extension comes amid criticism from foreign officials about the proposal
--Would subject foreign banks with U.S. operations to the capital, risk-management rules U.S. banks follow
WASHINGTON--The U.S. Federal Reserve will give banks and the public an additional month to weigh in on a far-reaching
plan to regulate foreign banks such as Deutsche Bank AG (DB, DBK.XE) and Barclays PLC (BCS, BARC.LN).
The Fed said Friday it now would accept comments until April 30, pushing back the original March 31 deadline to give "
interested persons more time to analyze the issue and prepare their comments." The slower pace represents a compromise
with banking groups, which had asked the Fed to extend the comment period until the end of May.
"It is critically important that we have sufficient time to analyze and respond to the implications and potential
serious consequences of the proposal for the U.S. economy and financial markets," said Sally Miller, CEO of the
Institute of International Bankers, a trade group representing foreign banks with U.S. units.
The delay comes amid criticism from foreign officials about the proposal, which would subject foreign banks with U.S.
operations to many of the same capital and risk management rules U.S. banks must follow. Michel Barnier, the E.U.'s
commissioner of financial-market regulation, criticized the proposal in a speech last week in New York, saying he wasn't
"fully convinced" of the approach.
"It seems to me to be moving away from cooperation with international partners," Mr. Barnier said.
The proposed rules were intended in part to prevent efforts by foreign banks such as Deutsche Bank and Barclays from
eluding tougher rules enacted as part of the 2010 Dodd-Frank financial overhaul. Foreign banks with at least $50 billion
in total global assets would be affected by the proposal, and banks with at least $50 billion in U.S. assets would be
subject to even higher standards.
Banks that have at least $10 billion in U.S. assets will be required to structure their stateside units in a single
bank-holding company structure, ensuring they are forced to comply with requirements set by Dodd-Frank.
Fed Governor Daniel Tarullo, discussing the proposal in December, said it was aimed at addressing gaps in the
regulation of foreign banks.
"The proposal is directly responsive to the vulnerabilities in foreign bank activities observed during and after the
financial crisis," Mr. Tarullo said.
Write to Michael R. Crittenden at email@example.com
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