The Federal Reserve Board is opposing an application by Memphis-based National Bank of Commerce to let a subsidiary underwrite corporate debt.

In a comment letter to the Office of the Comptroller of the Currency, the Fed said bank subsidiaries should not be allowed to conduct activities barred to banks themselves. Doing so, the Fed wrote, would effectively extend the federal safety net to the subsidiaries, distort capital markets, and give banks an "unfair" advantage over nonbanks.

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