] is fighting a U.S. Federal Reserve proposal
about banks and debt.
Dan McCrum and Shahien Nasiripour of the Financial Times report
the quiet Los Angeles-based mutual fund shop behind American
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,"
Neil Anderson, Managing Editor
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