Banks still face risk of Fed disapproval on exposure limits

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

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 exposures under these tests is still expected to be operationally intensive and potentially burdensome for