(25 September 2018 – US) European lenders are pushing US policy makers to relax the rules around stress tests and capital requirements in line with the relief given to the mid-tier US banks.
European banks and US senators are warning that America’s banks face retaliation overseas if the lighter-touch regime promised to domestic banks is not extended to foreign competitors.
US lenders with between US$50 billion and US$250 billion were granted a significant loosening of the regulations imposed by the Dodd-Frank reforms, subject to discretion of the Federal Reserve. European banks of similar size in the US want comparable regulatory treatment.
The senators lobbying on behalf of the European banks raised the possibility of foreign retaliation for unequal treatment, cautioning that the supervision of foreign banks “has important implications…for how other regulators treat the international operations of US banks operating abroad”.