Protectionist

Germany's top banking supervisor urged the U.S. to abandon its insistence on forcing big foreign banks to operate through separately capitalized subsidiaries, warning it could trigger a chain reaction in Europe and other jurisdictions that could fragment world financial markets."If one starts with renationalization, others will follow. The danger will increase that everybody makes their own laws," Sabine Lautenschlaeger, vice president of the Deutsche Bundesbank, said in an interview with Dow Jones Newswires, conducted Thursday.Ms. Lautenschlaeger's comments are part of a growing European pushback against U.S. measures proposed in December implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act, which would force foreign banks to hold more liquidity and capital with their U.S. subsidiaries.The proposals embody the way that Congress has extended its reach beyond the U.S. in its attempts to clamp down on risky banking since the crisis. Under it, foreign banks would be ...

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