U.S. Fed proposes new regulatory regime for foreign banks

By Pete Schroeder

WASHINGTON (Reuters) - The U.S. Federal Reserve on Monday proposed a new regulatory regime for foreign banks operating in the U.S. that aims to more closely tailor the rules in line with firms' risk profiles.

The proposed changes, which are subject to industry comment, would relax the capital and stress testing requirements for the subsidiaries of foreign banks, but impose stricter liquidity rules on lenders that rely extensively on riskier activities like short-term funding.

(Editing by Michelle Price and Chizu Nomiyama)