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Banks still face risk of Fed disapproval on exposure limits

Rules loosened on affiliated counterparties, but supervisor can reject banks’ findings

Federal Reserve eagle
Eagle-eyed: the Fed could theoretically override a bank’s own determinations

The US Federal Reserve has in theory relaxed its final rules on large banks’ exposure limits to a single counterparty, but experts say there could still be anxiety over how to identify whether counterparties are inter-related.

“While the final rule provided some clarification and modification of the tests for economic interdependence and control relationships, aggregation of counterparty

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