The U.S. Federal Reserve unveiled a final rule on Wednesday designed to prevent large financial firms from becoming so big that their failure could shake the core of the U.S. financial market.
Continue Reading Below
The final rule, required by the 2010 Dodd-Frank Wall Street reform law, prohibits banks and certain large financial firms from acquiring another company if that merger would cause their liabilities to exceed 10 percent of the total consolidated liabilities for all financial firms.
The Fed said on Wednesday that its final rule is "substantially similar" to the one it proposed in May, but contains a few changes.
For instance, the final rule has an exemption that would permit firms to continue securitization activities even if they have reached the limits set forth in the rule.
(Reporting by Sarah N. Lynch; Editing by Susan Heavey)