Major Banks Raise Concerns Over New Rules With Fed's Tarullo
May 02 2012 - 4:00PM
Dow Jones News
Top executives from six major banks on Wednesday discussed
concerns over new industry rules with Federal Reserve Gov. Daniel
Tarullo, the Fed said in a summary of the meeting.
The chief executives of Goldman Sachs Group Inc. (GS), U.S.
Bancorp (USB, J.P. Morgan Chase & Co. (JPM), Morgan Stanley
(MS), State Street Corp. (STT) and Bank of America Corp. (BAC)
talked about the Fed's 2012 capital analysis and raised fears that
new regulations would constrain their industry, the Fed said.
The Fed said Tarullo told the executives that their comments
would be considered part of the rule-making process under the
Dodd-Frank Wall Street Reform and Consumer Protection Act.
Specifically, the banking officials said they were worried the
new rules would overstate credit risk for some transactions and
would establish more stringent credit exposure limits for the
largest financial firms, according to the Fed. The banks are also
worried about the extent to which the alternatives to credit
ratings could overstate the risk of some of their assets.
The industry officials repeated fears that a rule restricting
some financial firms, including hedge and private equity firms,
from proprietary trading would "constrain market-making activity"
and the depth of some financial markets.
Furthermore, the bank executives said they are worried the new
rules could damage their international competitiveness.
-By Ian Talley, Dow Jones Newswires, 202-862-9285;
ian.talley@dowjones.com
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