Fed May Require Foreign Banks to Boost Capital in U.S.

Fed standards may force non-U.S. banks to house businesses in U.S. holding company.

U.S. units of foreign lenders including Deutsche Bank AG may be required by regulators to comply with tougher capital rules that some banks sought to skirt, three people with knowledge of the discussions said.

The Federal Reserve, drafting standards for the nation’s largest banks, may force non-U.S. firms to house all of their businesses within a U.S. holding company, said the people, who requested anonymity because the rules haven’t been completed. That means local units would have to meet minimum capital standards regardless of their parents’ resources.

Leverage Requirements

UBS AG and Credit Suisse Group AG, Switzerland’s largest lenders, were among firms that didn’t have holding companies to start with. Most of the largest foreign institutions have small commercial-banking units in the U.S., where their operations are largely centered on securities trading.

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