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Fed eyes new bank debt rules
US financial regulators are considering proposals to force banks to hold more long-term debt in a bid to improve stability. Dan Tarullo, a board member of the Federal Reserve, said a plan for minimum long-term debt requirements does “not immediately suggest any unfavourable unintended consequences, thereby perhaps strengthening its appeal as a near-term policy priority”. Banks tend to favour cheaper short-term debt, and a move to force a certain amount of debt to be long-term could hit profit margins. Tarullo’s speech in Washington DC came as news emerged that Wall Street critic Elizabeth Warren is set to secure a seat on the prominent Senate Banking Committee.