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Fed: Foreign firms must keep more in reserve

Foreign firms must keep more in reserve

Big foreign banks operating in the United States will have to keep far more money in their reserves to reduce risks to the financial system, pulling them in line with their American competitors, the Federal Reserve said Tuesday.

The board voted 5 to 0 to adopt the stricter regulations meant to limit the risks posed by foreign firms, which have been lending aggressively in the United States but setting aside far less to cover losses.

“The traditional framework for supervising and regulating major financial institutions and assessing risks contained material weaknesses,” said Fed Chair Janet Yellen, presiding at her first public meeting of the central bank’s board. “The final rule would help address these sources of vulnerability.”

Foreign banks have fought hard against the rule since it was proposed in 2012, warning that it would result in higher costs for the millions of U.S. businesses that rely on their services. Banks based overseas issue about 25 percent of all commercial loans in the nation.

Regulators relaxed some elements of the final rule. Instead of banks with $10 billion in assets being required to establish so-called holding companies as originally proposed, regulators raised the threshold to at least $50 billion in assets.

— Danielle Douglas

Maker of popular
app game plans IPO

The company behind “Candy Crush Saga” is going public, hoping the popularity of its addictive online game will translate into sweet returns for itself and its investors.

King Digital Entertainment, which also makes lesser-known games such as “Bubble Witch Saga” and “Pet Rescue Saga,” did not disclose how many shares it expects to offer in the IPO or a projected price range for the stock. In papers filed Tuesday with the Securities and Exchange Commission, the company said it hopes to raise as much as $500 million in the offering. The amount could change in the coming weeks as the company and the IPO’s underwriting banks gauge investor demand.

“Candy Crush,” which involves moving candies to make a line of three in the same color, was the most downloaded free app of 2013 and the year’s top revenue-grossing app. It has been downloaded more than 500 million times since its launch in 2012. The basic games are free, but players must pay for add-ons or extra lives.

The game’s success helped King replace Zynga — maker of “FarmVille” and “Mafia Wars” — as the No. 1 producer of games played on Facebook.

— Associated Press

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