Deutsche Bank, HSBC fight Fed's too-big-to-fail plans

London

FOREIGN banks including HSBC Holdings plc and Deutsche Bank AG are pushing back against the Federal Reserve's proposals on implementing rules designed to end too-big-to-fail, saying they are burdensome and unfair to the US units of the world's biggest lenders.

Under the Fed's proposals, US units of foreign banks affected would need an extra layer of debt available to be wiped out in a crisis, on top of securities qualifying as total loss-absorbing capacity, or TLAC. Both layers of debt deemed "readily available for bail-in" would have to be sold to the parent companies, rather than third-party investors, according to the draft rules, which were released for comment on Oct 30.