The US Federal Reserve has moved to place large foreign banks under the same regulatory regime it applies to domestic banks.
AAP reports the proposed regulations are in addition to the Basel III capital rules.
Large foreign banks will have to set up US holding companies for their US operations, have limits set on their credit exposure, and meet local capital and liquidity rules for their US operations.
They will also be subject to Fed stress tests on their US operations, to make sure they have enough buffer to withstand external shocks, whether from inside the United States or outside.
The new rules, will come into effect on 1 July, 2015. AAP reports they follow tighter regimes set for large domestic banks in the wake of the Wall Street financial crisis of 2008, when large under-capitalised banks and non-banks either closed or required substantial rescues from the government.
