#Carstens

27 11, 2023

Daily112723

2023-11-27T16:53:58-05:00November 27th, 2023|2- Daily Briefing|

Global Regulators Unveil 2023 GSIB List Methodology

Following publication of the FSB’s updated 2023 GSIB list, the BCBS today published additional details of the assessment including denominators of the high-level indicators used to calculate bank scores, high-level indicators for each bank in the sample, cut-off scores, and thresholds used to allocate GSIBs to buckets for calculating higher loss-absorbency requirements.

Carstens Presses for Unified Ledger, CBDC

Pointing to the speed of AI adoption in sharp contrast to financial-system innovation, BIS General Manager Agustín Carstens has reiterated his call for central bank “unified ledgers.” These would serve as a “network of networks” digital infrastructure, with Mr. Carstens indicating that the result would enable instantaneous payment and settlement of any transaction, use of smart contracts and composability, and seamless integration and automation of digital asset payments.

SEC Finalizes Massive, Controversial ABS-Conflict Standards

Thirteen years after the Dodd-Frank Act demanded it (see FSM Report ABS17), the SEC today voted 4-1 to approve controversial conflict-of-interest standards for asset-backed securities (ABS). The final rule is significantly amended from the proposal, so much so that SEC Commissioner Peirce said that a new proposal was required prior to final adoption.

 

Daily112723.pdf

19 10, 2023

DAILY101923

2023-10-19T16:30:42-04:00October 19th, 2023|2- Daily Briefing|

OIG Blasts FDIC’s Crypto-Policy Delay

Late yesterday, the FDIC’s Office of Inspector General (OIG) issued a report critical of the FDIC’s supervisory crypto policy.

Fed May Signal Possible Compromise as GOP Barr Demands Capital Answers

Amid press reports that Chair Powell has implicitly promised capital-rule compromise, HFSC Financial Institutions Chair Barr (R-KY) released a letter today pressing Vice Chair Barr still harder on the cost-benefit analytical (CBA) and cumulative-impact issues raised at the September hearing at which Karen Petrou testified.

Fed Data Show Increases in Household Financial Resilience, Profound Home-Affordability Gap

The Federal Reserve yesterday released its triennial Survey of Consumer Finances (SCF).  As always, we here highlight data with financial-policy implications; Petrou blogs and other releases will update economic-equality indicators.

BIS Head Calls for Review of Large Bank Supervision

BIS General Manager Agustin Carstens today said that the mid-March failures show the need for nations to review how they supervise larger banks, specifically highlighting liquidity risk and setting frameworks for emergency liquidity assistance.

OCC Analysis Shows Broad IRR Resilience With Startling Risk Pockets

Showing some pockets of severe risk but overall resilience, the OCC today released a statistical analysis of interest rate risk based on projected changes in twelve-month net interest income as well as the economic value of equity in parallel interest rate shock scenarios ranging from -200 basis points to +400 bps.

CFPB Thinks Big on Open Banking

As anticipated, the CFPB today advanced from a review of consumer data rights (see FSM Report

27 09, 2023

DAILY092723

2023-09-27T16:36:21-04:00September 27th, 2023|2- Daily Briefing|

FinCEN Bows to BOI Pressure

Responding to bipartisan concerns, FinCEN today issued an NPR to extend the beneficial ownership information (BOI) report filing deadline from thirty to ninety days for companies created or registered in 2024.

Chopra Considering Refi, Point Rules

The CFPB today released its annual report on residential mortgage lending, finding that mortgage applications, originations, and affordability declined significantly in 2022 while costs, loan denials, HELOC originations, and the percentage of cash-out refinances all increased.

HFSC GOP Presses Gensler on Banking-Reg Cumulative Impact

During Chairman Gensler’s as-always contentious HFSC hearing today, Rep. Barr (R-KY) asked if the SEC is in consultation with the Federal Reserve regarding the combined CRE effects of recent SEC proposals and the Basel III endgame standards (see Client Report CAPITAL234).

Carstens Says Law Must Catch Up To CBDC

BIS General Manager Agustín Carstens today emphatically called for rapid development of clear CBDC legal frameworks based on defined rights and obligations for privacy, AML compliance, and user choice.

Daily092723.pdf

1 06, 2023

Daily060123

2023-06-01T16:58:53-04:00June 1st, 2023|2- Daily Briefing|

BIS Head Presses for New-Age, Tough Bank Supervision

BIS General Manager Carstens today absolved central banks in general and the Fed by clear inference from fault in recent bank failures by way of recent interest-rate hikes.  Noting also that the Basel III construct is very resilient in design and should have prevented these collapses and then the secondary systemic risk that resulted around the world, Mr. Carstens points instead to failures by bank senior management and directors to execute basic risk-management obligations.

Exec-Comp Clawback Bill Takes Shape

With additional GOP support now also on the Banking Committee, Sen. Warren (D-MA) today introduced a revised version of the earlier, also-bipartisan bill on executive-compensation clawbacks following mid-March bank failures (see FSM Report COMPENSATION35).  The new bill covers only banks with assets above $10 billion and direct and indirect compensation over three years, a change from the prior bill’s attempt to capture all compensation.

CFPB Sounds P2P Alarm

Building on its 2022 deposit-insurance representations circular (see FSM Report DEPOSITINSURANCE113), the CFPB today released an issue spotlight warning consumers that funds are at risk with payment apps such as Venmo.  The FDIC is heightening pressure on nonbanks that gather funds which consumers may confuse with insured deposits (see FSM Report DEPOSITINSURANCE117), but doing so for payment apps is far more challenging because funds move quickly in and out of insured accounts.

Daily060123.pdf

21 10, 2021

Daily102121

2023-06-05T15:25:18-04:00October 21st, 2021|2- Daily Briefing|

BIS Advances Push for Central Bank Green Investment
The BIS today announced a new program channeling central-bank funds to green bonds in the Asia-Pacific region. Eligible bonds will be issued by sovereigns, supranational, and corporates that comply with relevant anti-greenwashing standards. While limited, this program adds to growing global pressure for “green” central-bank investments, advancing an initial design for doing so in a 2020 BIS policy paper on green finance, supervision, and regulation (see Client Report GREEN).

CFPB Plows New Path into Bigtech, Competition Policy
With a newly-confirmed director with long experience battling bigtech, the CFPB today issued orders requiring large tech companies operating payments systems to turn over information on their payments products, business plans, and practices. Orders have initially been sent to Amazon, Apple, Facebook, Google, PayPal, and Square, but the Bureau is also studying Alipay and WeChat Pay.

Fed Hops To After Latest Ethics Revelation
Following a still more embarrassing story about Fed trading in today’s New York Times, the FRB this afternoon announced conclusion of a “comprehensive review” and new senior-officer trading restrictions. These bar holding individual securities, restrict active trading, and increase reporting requirements.

FSOC Adopts Tough-Talk, Cautious-Action Climate Plan
FSOC today approved the report on climate-related financial risk required by President Biden’s Executive Order (see FSM Report GREEN8) adopting the cautious, disclosure-focused framework we anticipated when the executive order was issued.

Daily102121.pdf

18 10, 2021

Daily101821

2023-06-07T15:45:43-04:00October 18th, 2021|2- Daily Briefing|

Quarles Takes FSB Victory Lap
Speaking as he heads toward the end of his term as FSB chair, FRB Gov. Quarles today applauded the FSB for all the work it did to ensure financial stability during the pandemic.

Fed Researchers Conclude U.S. Regulatory Perimeter More Permeable Than Ever
A new Fed staff note builds on a major recent research paper to assess the U.S. regulatory perimeter. It concludes that the debate between entity- and activity-based regulation is a “red herring” in the U.S., urging an “if you do, you are and because you are, you do” approach.

BIS Advances CBDC, Payments Projects
In remarks today, BIS Managing Director Carstens reinforced the benefits of ongoing global work to advance CBDCs, focusing in particular on the BIS Innovation Hub’s recent project on CBDC cross-border settlement and the retail-facing construct (see Client Report CBDC6) endorsed last week by the G7.

OCC’s Libor Assessment Addresses Benchmark Replacement
The OCC today provided national banks with an updated self-assessment tool to gauge their readiness for the end of LIBOR. While a self-assessment, the tool is also an important advisory as to issues about which examiners are likely to inquire.

FHFA Revises Refi Standards, Continues Capital and Mission Rewrite
In remarks today, Acting FHFA Director Thompson announced changes to the GSEs’ refi-underwriting standards aimed at expanding access for low- and moderate-income households.

 

Daily101821.pdf

6 10, 2021

Daily100621

2023-06-20T16:34:10-04:00October 6th, 2021|2- Daily Briefing|

Toomey Continues GOP Attack on Comptroller Nomination
Making clear Senate Banking Republicans intend to give Comptroller-nominee Omarova no quarter, Ranking Member Toomey (R-PA) today requested a copy of her college thesis authored while Ms. Omarova was studying at Moscow State University.

Carstens Reiterates: Big Tech Demands Entity-Based Rules
Although U.S. policymakers have yet to reckon with big tech in financial services, global regulators continue to advance plans for new rules to govern the sector, with BIS General Manager Agustín Carstens today reiterating the need for entity-based rules.

BIS, IOSCO: FMI Principles Apply to Systemically-Important Stablecoins
The BIS Committee on Payments and Market Infrastructures (CPMI) and IOSCO today issued for consultation guidance on the application of their Principles for Financial Market Infrastructures (PFMI) to stablecoin arrangements.

Daily100621.pdf

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