US custodians face G-Sib capital hit

Banks warn client funds could be rejected or fees raised to meet new capital demands

State Street faces new capital charges

Custodian banks in the US are facing up to a world in which they have to hold capital against what they see as riskless assets – deposits placed at central banks – after the Federal Reserve finalised details of a surcharge that will apply to global systemically important banks (G-Sibs).

With custody deposits growing and margins shrinking, industry critics claim the added capital requirement could prevent custodians acting as a safe harbour in a future crisis.

"This is a problem for the entire

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