Having cracked down on Deutsche Bank in the past, The Fed appears to be playing good-regulator/bad-regulator as The FT reports that Deutsche is expected to benefit most from an imminent change in The Fed's liquidity rules.
Specifically, US banking regulators have dropped an idea to subject local branches of foreign banks to tough new liquidity rules (forcing US branches of foreign banks to hold a minimum level of liquid assets to protect them from a cash crunch).
As The FT further details, people familiar with his thinking say Randal Quarles, the vice-chair for banking supervision at the Fed, accepts the banks' argument that any liquidity rules on bank branches should only be imposed in conjunction with foreign regulators.
"Without some international agreement, we could have the situation where each country is trying to grab whatever isn't nailed down if there is another scare."
And Deutsche Bank benefits most (or rescued from major liquidity needs) since it has by far the largest assets in US branches...
Why would The Fed do this?