Fed acts to limit largest banks’ mutual exposures
Largest banks in the US face limits on their exposures, but smaller banks are exempt for now
The Federal Reserve has unveiled final rules designed to limit large banks’ exposures to one other, while emphasising that smaller banks will be unaffected.
The final rule on risk concentration, published on June 14, limits global systemically important banks (G-Sibs) to a credit exposure of no more than 15% of Tier 1 capital when lending to another systemically important financial firm.
Other large bank holding companies, with more than $250 billion in assets, will be limited to a maximum
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