Fed credit limits likely to hit investment banks, custodians hardest

Single-counterparty credit limit (SCCL) rules published by the Federal Reserve on June 14 may prove toughest for State Street, BNY Mellon, Morgan Stanley and Goldman Sachs to meet, Risk Quantum analysis suggests.

Under the rule, US global systemically important banks (G-Sibs) will have to limit their “aggregate net credit exposures” to any one other systemically important firm to 15% of their Tier 1 capital, and to any one other type of counterparty to 25% of their Tier 1 capital.

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