Federal Reserve extends comment period on capital, liquidity proposal for foreign banks

126px-US-FederalReserveSystem-Seal.svgThe Federal Reserve has recently extended the comment period on a proposal that would subject foreign banks to stricter capital, liquidity and early mediation requirements.

Though comments were originally due by March 31, the extended comment period allows the public and financial institutions to submit comments up until April 30.

The proposal, if finalized, would require banks to centralize their subsidiaries into a single holding company, which will be subject to the same requirements as U.S. holding firms.

“The enhanced prudential standards include risk-based capital and leverage requirements, liquidity standards, risk management and risk committee requirements, single-counterparty credit limits, and stress test requirements, and a debt-to-equity limit for companies that the Financial Stability Oversight Council has determined pose a grave threat to financial stability,” the Federal Reserve said in its extension of the comment period.

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