RBC sees no big impact from Fed foreign bank plan

Thu Nov 29, 2012 1:29pm EST
 
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* Tarullo proposal would see banks set up holding companies

* RBC says would have no impact on business

* TD, BMO also have big U.S. operations

TORONTO, Nov 29 (Reuters) - A proposal by a top U.S. Federal Reserve official to subject foreign banks operating in the United States to the same tough oversight rules as their U.S. rivals would not have much impact on Royal Bank of Canada , RBC's chief executive said on Thursday.

Fed Governor Daniel Tarullo's plan would force the largest U.S. divisions of foreign banks to establish holding companies that would cover all subsidiaries. The holding companies would have to comply with the same capital rules that cover U.S. banks.

Under the proposal, the Fed would stop relying on foreign oversight of banks.

Canadian lenders RBC, Toronto-Dominion Bank, and Bank of Montreal have large U.S. operations. RBC is Canada's largest bank.

Speaking on a conference call to discuss the bank's year-end results, RBC CEO Gordon Nixon played down the potential impact on the bank's U.S. operations.

"If it's something that we have to manage around, the impact will be more around just in terms of how we're structured," he said. "In terms of business it will have no impact whatsoever."   Continued...