Wall Street banks told Federal Reserve Governor Daniel Tarullo
in a meeting three weeks ago that a plan to limit exposure to
individual companies and governments would harm liquidity, the
Financial Times reported on its website Sunday, citing people
familiar with the talks.
The meeting included Goldman Sachs Group (GS) Chief Financial
Officer David Viniar, Morgan Stanley (MS) CFO Ruth Porat, and their
counterparts at six other banks, the FT reported the people as
saying.
The banks warn that the move would cut a total $1.2 trillion
from credit commitments at Goldman Sachs, JPMorgan Chase & Co.
(JPM), Morgan Stanley, Bank of America Corp. (BAC) and Citigroup
Inc. (C), and would also cause a ripple effect through
international markets because their government bond holdings could
be snared by the caps, the FT reported.
An unpublished Clearing House study, using data from the five
biggest U.S. Wall St banks, found 65 breaches of the Fed's proposed
counterparty limit with 22 different counterparties and suggested
$1.2 trillion of credit would have to be cut, the FT reported.
Full story:
http://www.ft.com/intl/cms/s/0/6a789456-871d-11e1-865d-00144feab49a.html#axzz1s9ZK7OPi.