Federal Reserve proposes easing post-crisis derivatives rules for banks

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By Pete Schroeder

WASHINGTON (Reuters) – The U.S. Federal Reserve announced Monday it had proposed easier rules for when banks must set aside cash to safeguard derivatives trades between affiliates.

The proposal follows a similar plan laid out by another banking regulator, the Federal Deposit Insurance Corporation, in September. The simpler proposal could potentially free billions of dollars at large banks that would no longer have to post upfront margin on internal derivatives trades. The proposal was approved by a vote of four to one as Governor Lael Brainard said the reversal was unjustified and could heighten risk in the financial system.

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