Enhanced Prudential Standards In implementing enhanced prudential standards for foreign banks with a large U.S. presence, we sought to ensure that firms hold sufficient local capital and liquidity—and have a risk management infrastructure—that is commensurate with the risks in their U.S. operations.2 And in general, that approach is meeting many of the broad goals the Federal Reserve set out to achieve.
Today, foreign banks with large U.S. operations are less fragmented, maintain local capital and liquidity buffers that align to the size and riskiness of their U.S. footprint, and operate on equal footing with their domestic counterparts. Our current approach aligns with other jurisdictions that host a large and complex foreign bank presence.