Capital Group Lobbying Against U.S. Bank Debt Plan - FT

Capital Group, one of the world's largest asset managers, has been quietly lobbying in Washington against an expected proposal designed to make it easier to deal with large banks facing financial difficulties, the Financial Times reported Sunday on its website.

A Federal Reserve rule, expected to be proposed next year, could force the largest financial groups to issue substantial amounts of debt at the holding company level, according to regulators and industry officials who have been briefed on the matter, the FT said.

As a top shareholder in several big banks, including Citigroup (C) and J.P. Morgan Chase (JPM), Capital Group has been arguing in private meetings with members of the Senate banking committee that the proposal would erode banks' future earnings and decrease profitability because the proposal would increase banks' funding costs, the FT reported, citing unnamed participants in the meetings.

Newspaper website: www.ft.com

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