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So far Arezou Rafikian has created 1090 blog entries.
17 09, 2021

PUSH-OUT14

2021-09-17T16:59:12+00:00September 17th, 2021|5- Client Report|

 Is the SEC Planning a Push-Out Pull Back?
As we noted, SEC Chairman Gensler’s written Senate Banking testimony included a short – but very significant – statement prioritizing Commission review of key fixed-income market sectors. This did not come up at the hearing (see Client Report INVESTOR18), which focused on hot partisan issues such as climate risk and cryptoassets. However, the extent to which the SEC renews efforts to govern fixed-income activities it now thinks too far outside its reach has significant strategic implications, most immediately for large banks that might find key underwriting and capital-markets activities under additional standards and greater enforcement risk. In this report, we assess what Mr. Gensler contemplates for the corporate, muni, and asset-backed securities (ABS) markets, revisiting the “push-out” battles the Commission largely lost over a decade ago to evaluate whether the Fed could or would defend banks again from demands that key activities register with the SEC.

PUSH-OUT14.pdf

16 09, 2021

GSE-091621

2021-09-16T20:02:44+00:00September 16th, 2021|4- GSE Activity Report|

Structured Finance Finds a Friend

As we noted, FHFA wasted no time after the PSPA revision with its proposed changes to GSE capital regulation.  Although the changes seemed technical to many observers, the agency’s fact sheet makes clear that they are fundamental.  Now, the GSE capital construct is predicated on CRT to move the money and thus preserve the capital, not on a capital raise to big-bank equivalents.  FHFA says this makes the GSE regime equivalent to that for global systemically-important banks (GSIBs), but it still differs in key and often critical respects from the regime applicable to U.S. GSIBs.  No matter, CRT is the new thing and faster GSE recapitalization is the certain result.

https://fedfin.com/wp-content/uploads/2021/09/GSE-091621.pdf

15 09, 2021

Daily091521

2021-09-15T21:02:54+00:00September 15th, 2021|2- Daily Briefing|

FHFA Changes Capital Course on Key Requirements
Yesterday, FHFA said it would soon issue revisions to GSE capital regulation. Today, it did, proposing to retract the prior rule’s dim view of credit-risk transfer (CRT) with a new approach actively promoting it.

Acting Comptroller Expands on Equality Banking, Other Priorities
In remarks today, Acting Comptroller Hsu reiterated his priorities: reducing inequality, addressing digitalization, countering climate risk, and guarding against complacency.

Daily091521.pdf

15 09, 2021

FedFin on: GSEs Get a New, If Familiar, Gig

2021-09-15T17:44:41+00:00September 15th, 2021|The Vault|

As noted yesterday, Treasury and the FHFA pulled the Trump PSPA’s plug, although importantly and widely overlooked is that this is true only when it comes to near-term asset-purchase considerations.  Still, with this action atop all the others redefining Fannie and Freddie since Sandra Thompson took over, the GSEs are being reconfigured into agents of Administration policy in concert with being still more critical agencies for housing finance.

The full report is available to subscription clients. To find out how you can sign up for the service, click here.…

15 09, 2021

GSE-091521

2021-09-15T17:43:32+00:00September 15th, 2021|4- GSE Activity Report, Uncategorized|

GSEs Get a New, If Familiar, Gig

As noted yesterday, Treasury and the FHFA pulled the Trump PSPA’s plug, although importantly and widely overlooked is that this is true only when it comes to near-term asset-purchase considerations.  Still, with this action atop all the others redefining Fannie and Freddie since Sandra Thompson took over, the GSEs are being reconfigured into agents of Administration policy in concert with being still more critical agencies for housing finance.

GSE-091521.pdf

15 09, 2021

Mises Institute, Wednesday, September 15, 2021

2021-09-16T17:20:27+00:00September 15th, 2021|Press Clips, Uncategorized|

The Fed Is Bailing Out the Wealthy as Everyone Else Pays the Price
By Ryan McMaken

The Federal reserve says that inequality is a problem. At the same, the Fed also pretends to have nothing to do with it.
Last September, for instance, Jerome Powell bemoaned the “relative stagnation of income” for people with lower incomes in the United States, but then claimed the Fed “doesn’t have the tools” to address this issue. Instead, Powell, being the chairman of this ostensibly “independent” and “nonpolitical” central bank, called for the federal government to engage in fiscal policy efforts at income redistribution….In her new book, Engine of Inequality: The Fed and the Future of Wealth in America, Karen Petrou looks in detail at how Fed policy over the past decade—especially quantitative easing (QE) and ultralow interest rates—have benefited the wealthy while leaving most ordinary people behind. Petrou is one of the more interesting and informative analysts examining the financial services sector. As the head of Federal Financial Analytics Inc., she has provided research on the banking sector for more than thirty years, but in recent years she’s become more focused on exposing and examining the unhealthy and destructive effects of Fed policyPetrou takes a different approach from the Austrians. She appears to have arrived at her conclusions from observing the trends and outcomes produced by Fed policy and then working backward into a theoretical framework. The data seems to have prompted her to ask why things have gone …

15 09, 2021

The Hill, Wednesday, September 15, 2021

2021-09-16T14:14:52+00:00September 15th, 2021|Press Clips|

Crypto risk-takers aren’t crazy – they’re just desperate
By Karen Petrou

As we’ve learned the hard way, social media has become a viral force for pandemic-scale political conspiracies. Of course, it’s not the media themselves that do this; instead, it’s the rage many Americans harbor against governmental institutions profitably enabled by social-media colossi. It’s thus unsurprising that companies such as Facebook, which grew to omnipotence fueled by social anger, understand better than establishment financial institutions that economic anger is also growing at an ever more feverish pitch. As a result, what I’ll call viral finance is spreading through every corner of the once staid banking, payment and investing infrastructure. Crafting a new-age financial regulatory framework thus requires a keen understanding not only of how crypto assets work, but also why they work so seductively for the millions now putting their life savings at risk not because they don’t know better, but because they can’t do better any other way.

https://thehill.com/opinion/finance/572411-crypto-risk-takers-arent-crazy-theyre-just-desperate

 …

14 09, 2021

Daily091421

2021-09-17T15:19:35+00:00September 14th, 2021|2- Daily Briefing, Uncategorized|

Warren Renews Demand for Wells Fargo Break-Up

Renewing her attack against Wells Fargo, Sen. Warren (D-MA) has called on the Fed to retract the company’s financial holding company (FHC) status.

Treasury/FHFA Reset the GSEs’ Role in U.S. Housing Finance

As we forecast earlier this year, Treasury and the FHFA today suspended — but did not abrogate — key aspects of the Trump Administration’s final changes to the standards governing Fannie Mae and Freddie Mac under the PSPA.

Daily091421.pdf

14 09, 2021

INVESTOR18

2021-09-14T21:08:51+00:00September 14th, 2021|5- Client Report|

Gensler Stands Firm on Crypto, Climate, MMF, Gamification Rules

As is often the case, Senate Banking’s hearing today with SEC Chairman Gensler did not touch on the fixed-income structure questions highlighted in his written testimony even though these could be among the most consequential for long-term capital-market regulation and the balance between the Fed and SEC in this key arena.  Instead, the session focused largely on consequential hot-button questions such as the SEC’s plans for climate-change disclosures and cryptoassets.  Here, partisan differences were again on vigorous display, with the sharp divisions between Chairman Brown (D-OH) and Ranking Member Toomey (R-PA) making it clear that regulatory and enforcement actions — not statutory clarification — will set policy until at least the next Congressional election.

INVESTOR18.pdf

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