The regulations in question effectively limit a bank’s funding exposure to one of its affiliates to 10% of the bank’s capital. The Fed has allowed Citibank and Bank of America to blow through that level – allowing them to lend up to 25 Billion to their subsidiaries. (approx 30% of capital) The move shows that the crunch is sapping even the big boys
Or another possibility is that the Fed is now sinking its fangs in and Citibank and The Bank of America are about to be snapped up by someone. Just a thought. One
