You can now read 5 articles in a month for free on BostonGlobe.com. Read as much as you want anywhere and anytime for just 99¢.

Fed proposing rules for foreign banks’ US units

WASHINGTON — The Federal Reserve is proposing that large foreign banks keep a bigger cushion against unexpected losses for their US affiliates.

Fed governors, including chairman Ben Bernanke, voted 7 to 0 Friday to propose the rules. They are designed to prevent another financial crisis. Rules were mandated by the 2010 financial overhaul and would apply to foreign banks with $50 billion in worldwide assets that operate in the United States.

Continue reading below

Their US affiliates would be subject to the same capital-reserve requirements as US banks. The US operations would have to take the form of a bank holding company, putting them under the Fed’s oversight.

Bernanke said the proposal ‘‘keeps a level playing field between foreign and domestic firms.’’

The rules wouldn’t take effect until July 2015. The Fed estimates that 107 foreign banks would be affected.

Rules proposed previously for US banks would require them to hold capital worth at least 6 percent of the value of their assets, in line with international standards.

The Fed’s proposal would apply to 23 foreign banks that have both worldwide assets and assets in the United States of at least $50 billion. A less stringent level would apply to 84 foreign banks with $50 billion or more in worldwide assets but less than that in US assets.

The proposal is open to public comment for 90 days.

Loading comments...
Subscriber Log In

We hope you've enjoyed your 5 free articles'

Stay informed with unlimited access to Boston’s trusted news source.

  • High-quality journalism from the region’s largest newsroom
  • Convenient access across all of your devices
  • Today’s Headlines daily newsletter
  • Subscriber-only access to exclusive offers, events, contests, eBooks, and more
  • Less than 25¢ a week
Marketing image of BostonGlobe.com
Marketing image of BostonGlobe.com
Already a subscriber?
Your city. Your stories. Your Globe.
Yours FREE for two weeks.
Enjoy free unlimited access to Globe.com for the next two weeks.
Limited time only - No credit card required!
BostonGlobe.com complimentary digital access has been provided to you, without a subscription, for free starting today and ending in 14 days. After the free trial period, your free BostonGlobe.com digital access will stop immediately unless you sign up for BostonGlobe.com digital subscription. Current print and digital subscribers are not eligible for the free trial.
Thanks & Welcome to Globe.com
You now have unlimited access for the next two weeks.
BostonGlobe.com complimentary digital access has been provided to you, without a subscription, for free starting today and ending in 14 days. After the free trial period, your free BostonGlobe.com digital access will stop immediately unless you sign up for BostonGlobe.com digital subscription. Current print and digital subscribers are not eligible for the free trial.