The Federal Reserve expects to put forward a proposal later this year that would require large banks to "maintain sufficient long-term debt at the parent company level to absorb losses and recapitalise operating subsidiaries in the event of failure," Fed board member Jerome Powell said in a speech in New York on Tuesday.

Powell stresses the proposal is "not intended to create a disadvantage for foreign banks in the US market," but a way to achieve "fair competition and a stable financial system"