WASHINGTON - The Federal Reserve Board late last month proposed allowing well-capitalized banks to invest in overseas companies without getting prior regulatory approval.

The Fed would expand an exemption to Regulation K, allowing banks to invest without preapproval up to $25 million or 5% of Tier 1 capital, whichever is less. The draft rules would extend this exemption to most investments by "strongly capitalized and well-managed" banks. It would apply to first-time and subsequent investments in a project.

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