"Regulators set rules meant to ward off bank crisis"

[applegrove]

Regulators set rules meant to ward off bank crisis

By MARCY GORDON
AP Business Writer

http://hosted.ap.org/dynamic/stories/U/US_RULES_TO_PROTECT_BANKS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT

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WASHINGTON (AP) -- Federal regulators are requiring big banks to keep enough high-quality assets on hand to survive during a severe downturn, the latest move under congressional mandate to lessen the likelihood of another financial meltdown.

The Federal Reserve adopted rules on a 5-0 vote Wednesday that will subject big U.S. banks for the first time to so-called "liquidity" requirements. Liquidity is the ability to access cash quickly. The Federal Deposit Insurance Corp. and the Treasury Department's Office of the Comptroller of the Currency adopted the rules later in the day.

Comptroller Thomas Curry, who also is a member of the FDIC board, said the new requirements "will help ensure that a banking organization's cash resources, and not taxpayers' money, will provide the support necessary for it to withstand short-term funding stress."

At a meeting of the Fed governors, Chair Janet Yellen called the rules a "very important regulation that will serve to strengthen the resilience of internationally active banking firms."

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