While there must be rules for internationally active banks, financial regulation need not be negotiated internationally, Federal Reserve Board governor Daniel Tarullo said Tuesday.

“Although adopting a robust, common set of capital and liquidity rules for internationally active banks is critical, it is neither practical nor desirable to negotiate all details of financial regulation internationally,” Tarullo told the Senate Banking, Housing, and Urban Affairs security and international trade and finance subcommittee, according to the Fed’s prepared text of his remarks. “It is important that the United States preserves the flexibility to adopt prudential regulations that work best within the U.S.’s financial and legal systems.”

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