'Foreign Banks In US Won't See Status Quo Return'

William Dudley, New York Fed President, in a recent speech to the Institute of International Bankers:

Dudley said that reform of financial oversight would benefit from a few key changes. He said rules that helped show the true level of risk faced by banks would be good, as would rules that helped preserve bank capital in times of stress.

Banks that are seen as "systemically important," or too big to fail, should have higher capital standards, Dudley said. He added that the "development of efficient forms of capital" that could turn debt securities into equity in times of trouble would be welcome, as well.

The emphasis on 'higher capital standards' is a form of U.S protectionism, as U.S. banks have been given unrestricted access to the spigot of free money, via Fed money laundering. European banks do not have this political or economic ability, so their respective countries have focused more on pay and bonus reform.

As the Guardian summarized recently :

European nations are lukewarm about a US demand that banks should be better capitalised, complaining that American institutions have benefitted from vast government injections of funds.

European nations, meanwhile, intend to push for a cap on bankers' pay, seen as a contributing factor to reckless risk-taking which prompted the credit crunch.

European banks, especially from the Continent, will see their U.S. operations squeezed if capitalization regulations come to the fore.

1 "Financial meltdown tops agenda as G20 summit convenes in Pittsburgh" - UK Guardian
2"Fed's Dudley: Foreign Banks In US Won't See Status Quo Return" - WSJ