Foreign banks will probably face tougher scrutiny from regulators in the wake of Daiwa Bank Ltd.'s $1.1 billion trading loss, legal sources predicted.

"The Fed is going to come down very heavily on foreign banks," said one Washington-based lawyer. "The perception at the Fed is that they're not being taken seriously by some Japanese and other foreign banks.

Limited Time Offer

Save $400 off your subscription. Special offer ends April 30, 2017.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.