U.S. Fed Toughens Capital Rule for Foreign Banks

The Federal Reserve Board on Tuesday approved tight new rules for foreign banks to shield the U.S. taxpayer from costly bailouts.

The Federal Reserve has thus given only minor concessions despite pressure from abroad to weaken the rule.

$50 billion threshold for foreign banks

According to the new rules, the largest foreign banks with $50 billion or more in U.S. assets will need to set up an intermediate holding company subject to the same capital, risk management and liquidity standards as U.S. banks.

Earlier, foreign banks with sizable...