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Federal Reserve shelves tougher liquidity rules for foreign banks

October 11, 2019

The rules establish a framework that sorts banks with $100 billion or more in total assets into four different categories based on factors, including asset size, cross-jurisdictional activity, reliance on short-term wholesale funding, nonbank assets, and off-balance sheet exposure.

According to the Fed, the new mandate simplifies things by applying liquidity standards to a foreign bank’s US intermediate holding company (IHC) based on the risk profile of the IHC, rather than on the combined US operations of the foreign bank.

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