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.
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.
