The Federal Reserve's move to impose tough capital rules on foreign banks in the U.S. could complicate global coordination on another post-crisis priority: international agreement on a plan that eliminates the chance any bank is too big to fail, the Wall Street Journal reported today. The central bank's decision, which came after months of pushback from overseas policy makers, inflamed other financial-system overseers who saw it as an intentional break from international coordination on post-crisis financial rules. That includes ongoing talks on a plan for dismantling a global financial firm without using government money in a future financial crisis. In response to the Fed's vote on Tuesday, a spokeswoman for Michel Barnier, European commissioner for the internal market, said the new rule "conflicts with the international standards on cross-border cooperation in bank resolution," referring to the standards for handling a large firm's failure. U.S. regulators said that the Fed's move was consistent with efforts to make the global financial system more stable.
