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Fed Compels Banks to Follow Tougher Risk Management Rules

The Federal Reserve sought to curb the threat of financial turmoil by compelling the biggest banks to follow a tougher standard for risk management and demanding stricter oversight by companies’ boards of directors.

The proposed rules would set triggers for regulatory enforcement for weak firms and require boards of directors to oversee and approve plans for limiting liquidity risk. The Fed delayed releasing rules for supervision of foreign firms and for risk-based capital and leverage requirements.