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So far Arezou Rafikian has created 2073 blog entries.
6 11, 2024

American Banker, Wednesday, November 6, 2024

2024-11-06T14:47:09-05:00November 6th, 2024|Press Clips|

Trump win likely to delay Basel III, imperil Biden bank regulation

By   Ebrima Santos Sanneh

The incoming Trump administration is likely to lead to swift turnover at bank regulatory agencies, which would push finalization of new capital standards for large banks further down the road…. Karen Petrou, a managing partner at Federal Financial Analytics, expects the scope of the new framework to be further narrowed. Specifically, she anticipates the requirements being applied only to banks with $250 billion in assets or more and the market-based requirements being limited to the largest global systemically important banks and others with large trading books. She said some revisions could be made to cap operational risk weights and amend credit risk standards, too. Overall, Petrou said, the final version of the Basel III endgame will be the result of a “very complicated negotiation” — one that would likely escape the attention of a potential Trump administration. “Once you start bargaining over details, I can guarantee you, because I have been doing this forever, the White House will completely lose interest,” she said. “Full stop.”…

https://www.americanbanker.com/news/trumps-election-as-president-could-delay-finalizing-biden-era-capital-rules-for-large-banks-with-new-officials-likely-favoring-a-less-stringent-basel-iii-framework-and-softer-capital-requirements

6 11, 2024

FedFin Assessment: Trump II Financial-Policy Outlook

2024-11-06T10:55:18-05:00November 6th, 2024|The Vault|

Given the likelihood of a Trump win, we turn in this report to our outlook for federal financial policy in a very different Administration than the one that has set it for the last four years.  We will refine this outlook when final tallies determine Congressional control, but slim margins will dog both parties and thus significantly complicate the legislative outlook.  Congress, like the White House, will also be preoccupied with nomination battles, immigration, geopolitical risk, and acute fiscal-policy challenges in areas such as the new president’s budget, planned tax breaks, and tariffs.

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

 …

5 11, 2024

FedFin Assessment: Election Uncertainty and Financial Policy

2024-11-05T14:44:46-05:00November 5th, 2024|The Vault|

FedFin will continue our practice of providing in-depth analyses in this tumultuous election once key races are decided.  However, clients have asked for an interim report on the outlook if election uncertainty persists and, worse, if it is accompanied by civil unrest.  As detailed in this report, we see no near-term implications for what might be considered course-of-business financial policy decisions even though many of these are, like the capital rules, drivers of significant strategic import.  Of more immediate concern are …

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

 …

30 10, 2024

FedFin on: Consumer Data Rights/Open Banking

2024-10-30T14:39:48-04:00October 30th, 2024|The Vault|

The CFPB has finalized in largely unchanged form its very controversial proposal requiring banks, fintechs, and certain other parties holding retail-customer personal data to share that data with third parties such as data aggregators following a consumer’s request.  The new rule will make it easier for consumers to obtain personal financial data from incumbent providers to assess alternative products and new providers or value-added services such as financial planning or other, higher-risk offerings (e.g., debt “reduction”).  The rule may well also standardize APIs accessing bank data and essentially outlaw screen-scraping, simplifying data access and heightening both privacy and security if the Bureau’s intended constraints function as anticipated in these still largely-unregulated markets. The rule seeks to accomplish its objectives not only by these requirements, but also by….

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

 …

28 10, 2024

Karen Petrou: Why Open Banking Could Close a Door to Economic Opportunity

2024-10-28T09:24:14-04:00October 28th, 2024|The Vault|

In the new and often just fervor to increase competition, trust-busters such as CFPB Director Chopra sometimes forget that too much competition can lead to the Hunger Games, not to the “fair” and “inclusive” sectors they seek.  Defending the new open-banking rule, Mr. Chopra said that he was willing to accept even a good deal more fraud risk for consumers because his rule humbles incumbent financial-services companies.  This is like saying that one is fine with a few more dangerous drugs since that’s what it takes to loosen Big Pharma’s strangle-hold.  Yes, the U.S. drug market is rife with abuses in how pharmaceuticals are priced and distributed and the FDA is problematic, but it seems irrefutable that drugs must be demonstrably safe and effective before we take them.  Do you want to fly on any airline a group of speculators concocts even if it opens up pricing at your congested hub?  Of course not, but that’s what antitrust zealots propose to do to banking even though we’ve learned the hard, hard way that footloose companies taking other people’s money often don’t give it back.

One of the humorless ironies of this election is the alignment between radical populists and progressives that squeezes out moderate, temperate, and – yes – imperfect policies that do the best they can for the most they can with the fewest possible side-effects.  Populists want “free” markets and progressives such as Mr. Chopra want tightly-regulated ones, but the goal in each case is to cut powerful …

16 10, 2024

FedFin Assessment: TD Orders Set New Enforcement Paradigm

2024-10-16T12:11:56-04:00October 16th, 2024|The Vault|

In this report, we build on our initial assessment of the ground-breaking AML enforcement action finalized last Thursday with TD Bank by the OCC, FRB, and FinCEN.  While the banking agencies did not use their nuclear option – requiring TD to close its U.S. operations – the scope of the violations persuaded the agencies along with FinCEN and the Department of Justice to impose huge fines and so sharply constrain U.S. activities as likely to cause both the bank and others to question the viability of continuing U.S. operations for at least the near term.  New branches, products, and services appear barred without a non-objection for the foreseeable future and considerable management turn-over, especially in the U.S., is also likely.  The OCC’s decision to impose the asset-growth cap discussed below implements the Acting Comptroller’s plan to ….

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

3 10, 2024

FedFin on: FHLB Advance Availability

2024-10-03T14:41:22-04:00October 3rd, 2024|The Vault|

The FHFA has issued an advisory bulletin (AB) building on its 2023 over-arching plan for FHLB reform and bank-regulatory efforts to clarify and constrain FHLB lending to troubled IDIs which received considerable “lender-of-second-resort” FHLB funding during the 2023 crisis. FHFA says that this bulletin does nothing more than “memorialize” longstanding FHFA standards; in fact, it makes significant changes and is likely to require at least some Home Loan Banks to improve member-related credit-risk management by no longer solely counting on collateral and contacting an IDI’s primary regulator, the FDIC, or a Reserve Bank to confirm that ….

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

30 09, 2024

BankThink, American Banker, Monday, September 30, 2024

2024-09-30T11:01:53-04:00September 30th, 2024|Press Clips|

Bank merger policy has long needed a makeover — just not this one

Until this month, the Department of Justice hadn’t finalized the adoption of new bank merger policy guidelines since 1995. Given the banking industry’s rapid evolution during the last three decades, an update was certainly overdue. It unfortunately took the bank failures of 2023 to inspire action on a much-needed bank merger policy makeover, and regulators hastily charged ahead to propose sweeping reforms. Despite soliciting feedback from industry experts and policy analysts that revealed a swath of concerns, the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency locked step with the DOJ to finalize their respective rewrites of bank merger criteria largely as proposed. This is not the bank merger makeover we needed. Banking regulators realize that allowing high-risk banks to make still-bigger bets by swallowing other banks can pave a swift path toward a systemic crisis. But, as I emphasized in a study submitted to the regulators, their new policies introduce other threats to the industry’s stability. Bank merger applicants now face heightened uncertainty and delays that are sure to deter the pursuit of sound deals, leaving the door wide open for those making last-gasp efforts to avoid failure.  Scrupulous, modern and aggressive antitrust policy is necessary, but those who govern banks must recognize that midsize bank mergers aren’t monopoly rent-seeking. They are critical if we are to prevent more regional bank failures and stop more

30 09, 2024

FedFin on: Deposit Record-Keeping

2024-10-01T10:11:45-04:00September 30th, 2024|The Vault|

Stunned by the impact of a recent fintech failure (Synapse) and growing risks in this arena, the FDIC is seeking comment on a proposal requiring IDIs doing business with third parties related to transaction-empowered deposit accounts to keep timely and daily reports of each deposit and its beneficial owner.  The FDIC believes that this would prevent harm to third-party customers who believe funds given to the third party are FDIC-insured when these funds are in fact aggregated into a single account for which the third party is the beneficial owner and the arrangement is not covered by FDIC pass-through insurance….

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

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