Statement by Chairman Ben S. Bernanke
I welcome our guests to the Federal Reserve.
The proposed rulemaking we are considering today is another important step toward strengthening our regulatory framework to address the risks that large, interconnected financial institutions pose to U.S. financial stability. This proposal would implement the Dodd-Frank Act's enhanced prudential standards and early remediation requirements for large foreign banking organizations. The proposed rules are generally consistent with the set of stricter standards that the Board proposed earlier for large U.S financial companies, reinforcing the Board's longstanding policy of national treatment and equality of competitive opportunity between the U.S. operations of foreign banking organizations and U.S. banking firms.
Foreign banks play an important role in the U.S. financial sector. The presence of foreign banking organizations in the United States has served U.S. borrowers and brought competitive benefits to U.S. markets. Yet, the financial crisis exposed flaws in the pre-crisis structure for supervising and regulating both large U.S. banking organizations and the U.S. operations of large foreign banking organizations. Just as the domestic proposal addresses financial stability risks posed by large U.S. financial institutions, this proposal includes targeted changes to our regulatory approach aimed at addressing the risks posed by the U.S. operations of large foreign banks.
I look forward to today's discussion of this important initiative.