Fed to investigate overseas bank capital regulations

26 March 2012

The Federal Reserve has revealed its intentions to look into restructuring efforts by overseas banks that aim to avoid greater capital requirements.

Such a move comes after Deutsche Bank suggested in its annual report that it had made moves to alter its US subsidiary in an effort to bring a separation between its bank and broker-dealer, the Financial Times reports.

As a result of the changes, the German lender will no longer be required to offer greater backing to its American commitments in the form of billions of dollars in extra capital.

Speaking to the Senate banking committee, Fed governor for regulation Daniel Tarullo said of Deutsche Bank's reorganisation plan: "[It] has certainly affected my thinking about how we do structure regulation of foreign bank organisations and I think we will need to respond to that."

Mr Tarullo explained a review of the process will have an impact on a number of foreign banks in the US, such as Barclays and BNP Paribas.

By Asim Shah

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