Fed sets limits on biggest banks’ loans to each other

WASHINGTON — The Federal Reserve has set limits aimed at addressing one of the leading causes of the 2008 financial crisis: the buildup of loans extended by one bank to another among the biggest Wall Street institutions.

The Fed governors adopted a rule Thursday that caps a big bank’s credit exposure to another bank. The rule is close to a proposal the central bank floated two years ago, but it makes revisions for the credit limits to be tailored to the size of the bank. That’s in line with the Fed’s current approach to regulation under new leaders appointed by President Trump.