#brokered deposits – Federal Financial Analytics

11 04, 2023

FedFin Assessment: Top Brainard, Gruenberg Regulatory Rewrites

Arezou Rafikian2023-04-11T16:52:14-04:00April 11th, 2023|The Vault|

In this report, we drill down on prior forecasts (see Client Report REFORM219) of near-term regulatory action to identify the revisions sure to be prioritized as NEC Director Brainard and FDIC Chairman Gruenberg seek to reverse rules finalized over their objections when they were in the minority. Ms. Brainard does not have a direct role dictating what the Fed will do given central-bank independence, but she has a good deal of influence as evidenced most recently by the White House action list. Acting Comptroller Hsu was not casting formal votes over these years, but he was an influential staff leader in this area and clearly has his own list – see for example his efforts on bank merger and resolution policy (see FSM Report RESOLVE48). We expect he will concur with Vice Chairman Barr and Mr. Gruenberg if they all advance the rewrites to the tailoring rules to which Ms. Brainard and Mr. Gruenberg so strongly objected….

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

11 04, 2023

REFORM220

Eliza Allen2023-04-11T10:41:47-04:00April 11th, 2023|5- Client Report|

FedFin Assessment: Top Brainard, Gruenberg Regulatory Rewrites

In this report, we drill down on prior forecasts (see Client Report REFORM219) of near-term regulatory action to identify the revisions sure to be prioritized as NEC Director Brainard and FDIC Chairman Gruenberg seek to reverse rules finalized over their objections when they were in the minority. Ms. Brainard does not have a direct role dictating what the Fed will do given central-bank independence, but she has a good deal of influence as evidenced most recently by the White House action list. Acting Comptroller Hsu was not casting formal votes over these years, but he was an influential staff leader in this area and clearly has his own list – see for example his efforts on bank merger and resolution policy (see FSM Report RESOLVE48). We expect he will concur with Vice Chairman Barr and Mr. Gruenberg if they all advance the rewrites to the tailoring rules to which Ms. Brainard and Mr. Gruenberg so strongly objected.

REFORM220.pdf…

3 04, 2023

REFORM219

Eliza Allen2023-04-03T11:07:12-04:00April 3rd, 2023|5- Client Report|

FedFin Forecast: Probable Changes to Bank Supervision, Regulation, Law

With Thursday’s White House announcement, we know that the Administration will do its best to support Fed and FDIC efforts to color recent events as a failure of Republican-led rulemaking, not also one of agency supervisory acumen, speed, and even competence. So far, key Democrats are instead pursuing a two-track strategy: complaining mightily about Trump-era rules but also joining with Republicans to cite an array of supervisory lapses they want quickly remediated by new standards, new rules, and – if need be – also by new law. Indeed, on Friday, Democrats made it clear that they want considerably more from the Administration than the fixes on which the agencies prefer to focus. Given how much is in motion and how much could advance, this report details FedFin’s forecast for near-term action in each of these arenas, focusing on matters with broad industry impact rather than specific SVB/Signature- enforcement issues. We thus provide forecast for immediate supervisory actions, those Congress will demand, new rules (tailoring and beyond), and the few legislative initiatives we believe have a reasonable chance of passage and Presidential approval.

REFORM219.pdf…

15 03, 2023

FedFin Assessment: Post-SVB Deposit Insurance Reform

Arezou Rafikian2023-03-15T16:58:47-04:00March 15th, 2023|The Vault|

Cementing prior denouncements of 2018 Dodd-Frank “rollbacks” into legislative action, 17 Democratic senators and 31 House Members today took direct aim at Trump-era banking policy by introducing legislation that would repeal Title IV of the Economic Growth, Regulatory Relief, and Consumer Protection Act. But, while this initiative is gaining considerable attention, its legislative prospects are dim – indeed, even Senate Banking Committee Chairman Brown (D-OH) suggested as much…

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

…

15 03, 2023

DEPOSITINSURANCE118

Eliza Allen2023-03-15T12:48:33-04:00March 15th, 2023|5- Client Report|

FedFin Assessment: Post-SVB Deposit Insurance Reform

As promised in our first post-SVB impact assessment (see Client Report RESOLVE49), this report begins a series of analyses of specific policy issues. We start here with possible changes to FDIC insurance based on comments from Reps. Maxine Waters (D-CA), Blaine Luetkemeyer (R-MO), and other arguing either that the $250,000 limit for FDIC coverage needs to be eliminated or sharply increased. We also analyze the prospects for shifting the burden of higher DIF premiums to large banks as recommended by the ICBA, ending the FHLB’s super-lien due to the resulting, significant increase in FDIC resolution costs in recent failures, changes to the treatment of brokered deposits, and revisions to the FDIC’s overall risk-based assessment system (see FSM Report DEPOSITINSURANCE96). Other resolution issues – e.g., the future of proposed regional-bank standards (see FSM Report RESOLVE48) and bank merger policy will be covered in future reports along with the prospects for significant changes in bank capital, liquidity, and other prudential standards.

DEPOSITINSURANCE118.pdf…

12 01, 2023

FedFin on: Financial-Policy Consequences of Silvergate’s Travails

Eliza Allen2023-01-12T11:04:34-05:00January 12th, 2023|The Vault|

Karen Petrou’s memo earlier this week and her comments to the American Banker about Silvergate have sparked many client questions. In this report, we provide additional context for aspects of this bank’s condition with policy consequences. High-profile cases such as this have a long history of suddenly shifting long-pending policies; depending on outcomes, this bank’s challenges and those of any other crypto-heavy banks will almost surely do so. In general, the case already confirms U.S. regulators of the wisdom of additional capital for crypto-exposed banks along the lines recently finalized by global regulators (see FSM Report CRYPTO37). However, it also raises significant questions about the role of the Federal Home Loan Banks, brokered deposits, resolution policy, and AOCI recognition – and these are just for starters as the bank struggles to stay afloat.

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

11 01, 2023

CRYPTO38

Arezou Rafikian2023-01-12T11:03:19-05:00January 11th, 2023|5- Client Report|

Financial-Policy Consequences of Silvergate’s Travails

Karen Petrou’s memo earlier this week and her comments to the American Banker about Silvergate have sparked many client questions. In this report, we provide additional context for aspects of this bank’s condition with policy consequences. High-profile cases such as this have a long history of suddenly shifting long-pending policies; depending on outcomes, this bank’s challenges and those of any other crypto-heavy banks will almost surely do so. In general, the case already confirms U.S. regulators of the wisdom of additional capital for crypto-exposed banks along the lines recently finalized by global regulators (see FSM Report CRYPTO37). However, it also raises significant questions about the role of the Federal Home Loan Banks, brokered deposits, resolution policy, and AOCI recognition – and these are just for starters as the bank struggles to stay afloat.

CRYPTO38.pdf…

12 01, 2022

FedFin Forecast: Prudential Regulatory Framework Set for Structural Change Largely Built on Current Standards

Arezou Rafikian2023-04-24T15:49:23-04:00January 12th, 2022|The Vault|

As promised, FedFin begins our 2022 forecasts with this in-depth report on bank regulation. In general, we conclude that the context of decisions in 2022 and beyond will shift from a focus on tailoring efficiencies and burden relief to one emphasizing risk mitigation, fairness, equity, and — for the very biggest banks — a smaller systemic footprint. This report looks at the impact of pending personnel decisions as well as the outlook for climate-risk, new capital rules, FBO standards, and other key issues….

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

12 01, 2022

REFORM211

Arezou Rafikian2023-04-24T15:49:07-04:00January 12th, 2022|5- Client Report|

FedFin Forecast: Prudential Regulatory Framework Set for Structural Change Largely Built on Current Standards

As promised, FedFin begins our 2022 forecasts with this in-depth report on bank regulation. In general, we conclude that the context of decisions in 2022 and beyond will shift from a focus on tailoring efficiencies and burden relief to one emphasizing risk mitigation, fairness, equity, and — for the very biggest banks — a smaller systemic footprint. This report looks at the impact of pending personnel decisions as well as the outlook for climate-risk, new capital rules, FBO standards, and other key issues. The only rule we think might get a near-term substantive rewrite is the stress capital buffer (see FSM Report CAPITAL225) via tougher CCAR standards and a reversal of the prior decision to end qualitative objections. The odds of a leverage rewrite are smaller, but not negligible.

REFORM211.pdf…

10 01, 2022

Daily011022

Arezou Rafikian2023-04-25T15:42:36-04:00January 10th, 2022|2- Daily Briefing|

FDIC Exempts Some Custody Funding from Brokered Deposits
As promised in its brokered-deposit rule (see FSM Report DEPOSIT INSURANCE111), the FDIC today published a notice expanding deposit-making exceptions to funds received from third-party custodians without discretion over the IDIs into which funds are placed.

FSB Turns to Insurance Resolutions
The FSB today expanded on longstanding efforts to ensure successful insurance-company resolution, issuing papers on resolution funding, and resolution planning.

Warren Stands Firm Against Powell
As anticipated in our in-depth report earlier today (see Client Report FEDERALRESERVE22), Sen. Warren (D-MA) is not letting upon Chairman Powell. Today, she sent a tough letter reiterating demands for an array of information on Fed-officer trading, reiterating also that she wants an SEC investigation.

Daily011022.pdf…