April 3, 2013 / 12:56 PM / in 5 years

Fed's Tarullo-Foreign bank curbs won't threaten global reform

NEW YORK, April 3 (Reuters) - The Federal Reserve’s point person on financial regulation said on Wednesday that plans to tighten oversight of foreign banks in the United States are crucial for financial security and pose no threat to global banking reform.

“I understand that banks sometimes don’t like to have to increase their capital, but that is something we’ve required of banks in the United states,” said Fed Governor Daniel Tarullo said during an interview with CNBC TV.

“The proposal to the foreign banking organizations is an effort to respond to the financial vulnerabilities that they could pose for us, and which in turn would pose vulnerabilities for the world.”

Tarullo’s plan would force foreign banks to group all their subsidiaries under a holding company, subject to the same capital standards as U.S. holding companies.

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