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29 08, 2023

DAILY082923

2023-08-29T16:55:20-04:00August 29th, 2023|2- Daily Briefing|

Agencies Advance Controversial Long-Term Debt, Resolution Proposals

The FDIC, OCC, and FRB today tackled several critical resolution issues in the wake of recent bank failures, proposals that raise strong objections from regional banks despite FDIC and FRB unanimity today on at least one of them.  As anticipated, the FDIC and FRB approved an NPR that would impose minimum long-term debt requirements for banks and BHCs with assets over $100 billion, with the FDIC and Fed boards voting unanimously in favor even as FRB Gov. Bowman strongly dissented despite a three-year transition period.  Similar to the ANPR floating this rule (see FSM Report RESOLVE48), the proposal would require large banks to hold a minimum amount of eligible long-term debt equal to the greater of six percent of risk weighted assets, 3.5% of average total consolidated assets, or 2.5% of total leverage exposure for banks subject to the SLR.

Daily082923.pdf

14 03, 2023

DAILY031423

2023-03-14T16:55:33-04:00March 14th, 2023|2- Daily Briefing|

JEC Chairman Heaps SVB Blame on Trump-Era Rollbacks

Echoing Democratic statements made earlier in the day, JEC Chairman-Designate Heinrich (D-NM) released a statement late yesterday blaming the Trump Administration’s 2018 regulatory “rollbacks” for SVB’s failure, noting that the committee warned in 2018 that the rollbacks would result in SVB being subject to “nearly none” of Dodd-Frank’s enhanced regulations.

Warren Lambasts Powell on SVB Inquiry

Expanding her attack against FRB Chairman Powell, Sen. Warren (D-MA) today demanded that he recuse himself from the SVB investigation announced just yesterday.  She states that Mr. Powell’s actions allowed “big banks” like SVB to “load up” on risky assets, saying that Vice Chairman Barr needs complete independence.

Treasury Official Announces Coming DeFi Risk Report

In remarks yesterday, Assistant Secretary for Treasury’s Office of Terrorist Financing and Financial Crimes Elizabeth Rosenberg announced that her team will shortly be releasing a risk assessment on DeFi.  She notes interest in any legitimate DeFi use cases, also saying that DeFi may nonetheless facilitate illicit finance.

FDIC Warns Bridge-Bank Counterparties

Reflecting the unusual nature of the two bridge banks the FDIC has established for SVB and Signature, the agency was compelled today to issue a warning that financial institutions are required to comply with their obligations to these FDIC-owned institutions to the extent previously required of the failed banks.

Daily031423.pdf

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