As global credit markets seized up in late 2008, European banks with US operations borrowed heavily from the US Federal Reserve discount window, the primary program for providing cash to banks facing a liquidity squeeze. At the time, these foreign lenders didn't have to meet Fed capital rules to cover losses on American-based units provided their parent company was properly capitalized. They competed and borrowed in the US -- but didn't have to play by the house rules. That game is up: On Nov 28, Federal Reserve Gov Daniel Tarullo, who oversees bank supervision, announced plans to impose the same capital and liquidity rules on the US operations of foreign lenders that apply to American institutions. The new rules, he added, won't be as strict for foreign banks with small US units. Meeting multiple local capital requirements will drive up overall cash needs, says Kim Olson, a principal at Deloitte & Touche in New York.