JPGoldman Stanley Intact as Basel Change Keeps Bank Ties
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The largest U.S. banks can remain entangled with each other now that global regulators have loosened proposed limits on the financial web that led to investor panic in 2008 and prompted bailouts.
The Basel Committee on Banking Supervision, which set out a year ago to block banks from relying too heavily on each other, changed course last week, opting to let firms preserve most derivatives and repurchase agreements among themselves. The panel revised formulas for evaluating exposure and used a broader definition of capital. Those tweaks spare about $1 trillion in deals at seven of the biggest U.S. banks that would have exceeded proposed limits, according to a November study by the Clearing House, an industry group.