US financial regulators are working on rules aimed to help banks avoid the sudden funding withdrawals that doomed Bear Stearns and Lehman Brothers, officials say.
The deliberations represent a deepening of the US regulatory response to the financial crisis. Regulators have been focusing on making sure banks have sufficient capital to withstand the kind of financial shock that hit last year.
They are considering proposals to prevent banks from growing overly dependent on short-term borrowings – as was the case with Bear and Lehman. The idea behind the discussions is that capital alone is not enough to prevent a run on a bank.
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