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Federal Reserve extends comment period on foreign bank proposal

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

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

The proposal 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, and the largest institutions would need to hold liquidity buffers, Reuters reports.

“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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