Federal Reserve targets big bank customers

Hedge funds, insurers, and other companies that do business with Wall Street megabanks will pay a price for regulators’ efforts to ensure any future collapse of a giant lender doesn’t tank the entire financial system.

The Federal Reserve is set to propose so-called stays on derivatives and other contracts that would prevent counterparties from immediately pulling collateral from a failed bank.

The plan is meant to give authorities ample time to unwind a firm, hopefully heading off the frantic contagion that spread through markets when Lehman Brothers toppled in 2008.