Fed’s Tarullo details plans to counter bank runs

by CNBC.com
November 25, 2013

Global regulators need more policy tools to counter the risk of devastating bank runs and should have powers over a wide array of market participants, U.S. Federal Reserve Governor Dan Tarullo said on Friday.

“There is a need to supplement prudential bank regulation with a third set of policy options in the form of regulatory tools that can be applied on a market-wide basis,” Tarullo said at a conference on shadow banking.

He also detailed the Fed’s plans to write new rules that would make it less attractive for banks to raise cash in short-term wholesale funding markets, a key factor in the collapse of Lehman Brothers in 2008.

Banks that substantially rely on short-term funding in the interbank market should be required to hold more capital on top of what is already mandated by international rules under the so-called Basel III pact, Tarullo said.

Tarullo, who is the central bank’s main policymaker on financial regulation, announced earlier this year that the Fed was working on a short-term funding rule.

Read the full article: http://www.cnbc.com/id/101222045

No comments yet - you can be the first!

Leave a Reply

Your email address will not be published. Required fields are marked *

Keep the Fake News Media in check.

Don’t let the MSM censor your news as America becomes Great Again. Over 500,000 Americans receive our daily dose of life, liberty and pursuit of happiness along with Breaking News direct to their inbox—and you can too. Sign up to receive news and views from The 1776Coalition!

We know how important your privacy is and your information is SAFE with us. We’ll never sell
your email address and you can unsubscribe at any time directly from your inbox.
View our full privacy policy.