Capital Group, one of the world's largest asset managers, has
been quietly lobbying in Washington against an expected proposal
designed to make it easier to deal with large banks facing
financial difficulties, the Financial Times reported Sunday on its
website.
A Federal Reserve rule, expected to be proposed next year, could
force the largest financial groups to issue substantial amounts of
debt at the holding company level, according to regulators and
industry officials who have been briefed on the matter, the FT
said.
As a top shareholder in several big banks, including Citigroup
(C) and J.P. Morgan Chase (JPM), Capital Group has been arguing in
private meetings with members of the Senate banking committee that
the proposal would erode banks' future earnings and decrease
profitability because the proposal would increase banks' funding
costs, the FT reported, citing unnamed participants in the
meetings.
Newspaper website: www.ft.com
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