WASHINGTON - To help U.S. banks compete with foreign rivals, federal regulators on Tuesday proposed reducing the capital needed to back loans to well-run, well-supervised securities firms.

Banks would have to hold $1.60 for every $100 lent to these broker-dealers. Under current risk-based capital rules, banks have to hold $8 for every $100 loaned.

The four banking and thrift agencies are making this change to bring U.S. rules in line with those of the other G-10 countries, which adopted the change two years ago when it was approved by the Basel Committee on Banking Supervision.

The Federal Reserve Board and the Federal Deposit Insurance Corp. agreed to propose the change Tuesday. The Office of the Comptroller of the Currency and the Office of Thrift Supervision are expected to do likewise in the next two weeks. After that, the public would have 45 days to comment.

The agencies do not collect data on bank loans to securities companies, and officials admitted they could not say how many loans would be affected.

But regulators do not expect the impact to be widespread. Only 15 major securities firms meet the criteria for lower capital requirements - consolidated supervision and investment ratings of "A" or higher on long-term unsecured debt. What's more, unsecured bank debt makes up little of these brokerages' borrowing, regulators said.

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