Wall St. Banks Feel the Pressure from Fed’s New Rule

Wall Street banks scrambled on Tuesday to determine how they might have to adjust their business models to comply with newly proposed rules that could push the banks to downsize.

In testimony before the Senate Banking Committee on Tuesday, a Federal Reserve official, Daniel K. Tarullo, said that the central bank was hoping to tip the regulations against banks that are still thought to be too big to fail, and in favor of smaller, less-complex banks.

While Mr. Tarullo gave few specifics on how the rules would be carried out, his comments suggested that financial firms that rely the most on Wall Street trading, like Goldman Sachs and Morgan Stanley, would probably face the stiffest requirements.

NY Times

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