Federal regulators criticized several Wall Street banks over the handling of a $1.15 billion loan they helped arrange for Uber Technologies Inc [UBER.UL] this past summer, according to people with knowledge of the matter.

Led by Morgan Stanley, the banks helped the ride-sharing network tap the leveraged loan market in July for the first time, persuading institutional investors to focus on its lofty valuation and established markets rather than its losses in countries such as China and India.

The Federal Reserve and the Office of the Comptroller of the Currency (OCC), which are trying to reign in risky lending across Wall Street, took issue with the way in which the banks carved out Uber's more mature operations from the rest of the business, the people said, declining to be named because talks with the regulators are private.

This so-called "ring-fencing" of certain markets makes companies appear a safer bet because it strips out the parts of their business that are loss-making.

~ snip ~