Fed Seen Easing Capital Rule for Smaller Foreign Banks

The Federal Reserve plans to narrow the number of foreign banks that will have to consolidate their U.S. operations and hold more capital.

The central bank will raise the threshold to $50 billion of assets in the U.S. from $10 billion proposed in 2012 for firms that must have local holding companies, according to three people with knowledge of the decision. The change means about one-third of the two dozen companies originally affected won’t have to comply with harsher capital standards. A final version of the new rules governing foreign lenders is scheduled to be approved by the Fed next week and go into effect next year.