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Wednesday, December 26, 2012|
Capital Group Fights a Fed Plan for Banks
Capital Group [profile] is fighting a U.S. Federal Reserve proposal about banks and debt.
Dan McCrum and Shahien Nasiripour of the Financial Times report that the quiet Los Angeles-based mutual fund shop behind American Funds is lobbying the U.S. Senate banking committee members to fight a Fed rule, expected to be proposed in 2013, that would force bank holding companies to shift their debt to the holding company level and away from the operating businesses, like the banks themselves.
Capital Group, thanks to its giant mutual fund business, is a top-ten shareholder in the U.S.'s four biggest banks: Bank of America, Citi, J.P. Morgan and Wells Fargo. All of those firms are holding companies with numerous operating subsidiaries, and Capital Group's representatives have been warning the Senate Banking Committee members "that the proposal would erode banks' future earnings and decrease profitability because the proposal would increase banks' funding costs," the FT reports.
Printed from: MFWire.com/story.asp?s=42480
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