European banks to hand reports to NY Fed?

3 October 2011

Banks in Europe may be asked to hand over more detailed reports regarding liquidity to the Federal Reserve Bank of New York (NY Fed).

The move comes as the US seeks to increase its monitoring of risks from the continent, which is currently embroiled in a sovereign debt crisis.

Two people familiar with the matter told Bloomberg that regulators have spoken with some of the largest lenders in Europe about the production of a fourth-generation daily liquidity report, which can look at possible liabilities including credit-default swaps.

Kevin Petrasic, an attorney at law firm Paul, Hastings, Janofsky and Walker - which has 18 offices worldwide - said: "The Fed is trying to understand what the pressure points are in terms of liquidity and potential risks that are imposed by foreign banks to domestic institutions in our financial system."

The industry figure added that the situation in Europe has resulted in the development of a greater sense of urgency.

By Claire Archer

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