Global banking, a model promoted for more than 30 years byfinancial conglomerates cobbled together through cross-bordermergers, is colliding with the post-crisis reality of stricternational regulation.

Daniel K. Tarullo, the Federal Reserve governor responsible forbank supervision, announced plans last week to impose the samecapital and liquidity requirements on the U.S. operations offoreign lenders as on domestic companies. The U.K. and Switzerlandalso have proposed banking and capital rules designed to protecttheir national interests.

Regulators want to curtail risks exposed after global banks suchas New York-based Citigroup Inc., Edinburgh-based Royal Bank ofScotland Group Plc and Zurich-based UBS AG took bailouts in thebiggest financial crisis since the Great Depression. Forcinglenders to dedicate capital and liquidity to multiple localsubsidiaries, rather than a single parent, may undermine thebusiness logic of a multinational structure.