#capital buffer

13 04, 2023

FedFin Assessment: Implications Of An IRR Capital Charge, New Liquidity Rules

2023-04-13T14:02:25-04:00April 13th, 2023|The Vault|

As we noted yesterday, the head of the Basel Committee has targeted two capital and liquidity  compromises included in the current Basel III construct not addressed in the end-game rules to which the U.S. plans shortly to turn.  Actions whether by Basel or, even without it, the U.S. to return to Basel’s initial proposals have significant strategic consequence.  Thus, this report assesses these options and how the U.S. might act on them.  We conclude that the U.S. will quickly impose a de facto interest-rate risk (IRR) capital charge and tighten LCR assumptions related to uninsured deposits.

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

29 03, 2022

FedFin: Global Securities Regulators Diss DeFi

2023-03-27T15:46:19-04:00March 29th, 2022|The Vault|

As promised, this report provides an in-depth analysis of IOSCO’s new paper on decentralized finance, one sure to advance the FSB’s efforts to bring DeFi systems under greater regulatory scrutiny due to the findings we here detail.  In the U.S., President Biden’s crypto-focused executive order (see FSM Report CRYPTO26) highlights DeFi’s risk with regard to illicit finance.  IOSCO’s work on this report was headed by the SEC, suggesting rapid U.S. action not only on this concern, but also on many other risks by the Commission, as well as the FSOC and other U.S. agencies…

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

1 03, 2022

FedFin: Capital Grease for CRT Expansion

2023-04-04T14:46:28-04:00March 1st, 2022|The Vault|

As we noted late last week, FHFA has finalized revisions to its 2020 capital rule that most importantly lighten the GSEs’ capital load and reinvigorate credit risk transfer.  Deals from both Fannie and Freddie will come fast, but how furiously will depend also on externalities — i.e., how QT redefines RMBS demand and CRT pricing, what Ukraine does to market risk-on tolerance.

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

12 01, 2022

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

2023-04-24T15:49:23-04:00January 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.…

18 10, 2021

FedFin on: Global MMF-Reform Options

2023-06-07T15:52:59-04:00October 18th, 2021|The Vault|

Global regulators have now finalized a framework on which national regulators may base the reforms they deemed necessary after the pandemic sparked profound disruptions in this sector.  However, as with the FSB’s proposed approach, the final framework sets few parameters for jurisdictional action beyond a strong plea for action of some sort that would meaningfully address the redemption and/or liquidity risk the FSB continues to believe presents a threat to national and even global financial stability.

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

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