Fed considering imposing local liquidity requirements on foreign banks

Federal Reserve

In an unprecedented move, the Federal Reserve is considering imposing local liquidity requirements on US branches of foreign banks, it announced on April 8.

The proposal reflects the Fed’s recent moves to better align the risks a financial institution poses to the system with the regulatory requirements it faces. The support among the Fed board for the suggestions, however, is not unanimous.

“Introducing this concept is novel in the realm of international regulation (in contrast to supervision

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