Biggest U.S. Banks Fight Back Against Fed's Too-Big-to-Fail Plan
- Long-term debt requirement should be erased, lobby groups say
- Lenders say proposal could reduce amount of credit in economy
Fed's Kashkari Pushes Break Up of Biggest Banks
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The largest U.S. banks, gearing up for another battle with regulators, say a Federal Reserve plan designed to prevent the need for bailouts during a crisis includes measures that could hurt the economy by damping credit.
The Fed’s proposal that systemically important banks boost their ability to withstand severe losses “contains a number of requirements that are counterproductive or unnecessary,” five financial-industry lobby groups said in a letter released Monday. A requirement that lenders accumulate long-term debt -- a key element of the plan -- should be eliminated, the groups said.