Fed Gives Northern Trust a Rule Break

Published January 26, 2009, 2:00 a.m. EST

Updated January 23, 2009, 8:24 p.m. EST

1 Min Read

The Federal Reserve Board is easing affiliate transaction restrictions for Northern Trust Co., letting the $69 billion-asset Chicago bank buy up to $600 million of auction-rate securities from its parent, Northern Trust Corp.

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The permission gives Northern Trust Co. flexibility in its compliance with Section 23(a) of the Federal Reserve Act, which typically limits a financial institution's transactions with any single affiliate to 10% of the institution's capital.

The Fed also reported a similar deal allowing BB&T Corp. of Winston-Salem, N.C., to exceed the normal limit in bond transactions with a securities arm. The central bank has eased the restrictions for other institutions.

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