#Capital-Reg Defense

23 02, 2024

AL022624

2024-02-23T16:40:22-05:00February 23rd, 2024|3- This Week|

Anniversary Party

March 10 is the one-year anniversary of Silicon Valley Bank’s costly failure, although one might better date the beginning of the end of regional-bank regulation as we knew it to March 8, the date Silvergate bit the digital dust.  Congress has talked much of these failures ever since, but actually done nothing but chide the banking agencies from different sides of the political spectrum based on what Members think of the massive regulatory rewrite proposed in SVB’s wake and ongoing internal work at the banking agencies to improve woefully-inadequate supervision.  We would add the value also of focusing on the FDIC’s inability to resolve troubled banks to the urgent to-do list, but Congress has yet to turn to it and so neither does the FDIC.  Still, lack of action does not mean lack of talk.  There will in fact be much, much talk about recent failures when Chair Powell comes to Congress next week and even, we expect, a bit of legislative action that just might change a little bit of banking law.

Al022624.pdf

23 02, 2024

Daily022324

2024-02-23T16:39:26-05:00February 23rd, 2024|2- Daily Briefing|

FDIC’s OIG: Agency Faces Severe Staffing, Resolution Challenges

The FDIC’s Office of the Inspector General (OIG) late yesterday issued an assessment of ongoing FDIC challenges.  These only indirectly address the workplace-culture inquiry now gripping the agency and Congress, focusing principally on the extent to which the agency has made progress addressing the significant internal failings identified in its reports on Signature Bank’s failure (see Client Report REFORM222) and that of First Republic.

Progressive Dems Argue that De-Risking is Discriminatory

Late yesterday, Sens. Warren (D-MA) and Sanders (D-VT) alongside Reps. Omar (D-MN), Tlaib (D-MI), and Pressley (D-MA) sent letters to the heads of JP Morgan Chase, Wells Fargo, Bank of America, and Citibank criticizing the banks for what they describe as shutting down consumer accounts as part of AML de-risking practices.  Calling this harmful to consumers and a threat to equitable access, Muslim-Americans and other minority communities are said to be disproportionately affected in violation of Treasury policy.

Basel Head Continues Capital-Reg Defense, Work on NBFI Standards

The head of the Basel Committee, Pablo Hernández de Cos, today reiterated his defense of the global capital rules, spending much of the talk arguing against those seeking to roll them back and those who consider bank capital “idle money.”  The talk also emphasized the inter-connected risk to banks highlighted by new exploratory Fed stress tests (see Client Report STRESS32), Acting Comptroller Hsu’s speech earlier this week, and FSOC’s systemic methodology (see FSM Report SYSTEMIC98), noting …

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