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18 11, 2022

DAILY111822

2022-11-18T16:59:14-05:00November 18th, 2022|2- Daily Briefing|

GAO Study Hikes Pressure on SEC Process

Adding to the Chairman Gensler’s woes, the GAO today released a report finding that the SEC Division of Enforcement did not document its work reviewing staff procedure assessments, hindering future internal reviews.  Republicans have been harshly critical of SEC procedures and processes, as well as of the Commission’s enforcement-focused approach to cryptoassets.  The GAO’s finding adds fuel to a campaign sure to gain force next year, recommending as it does that the Division Director ensure that information is collected and reported in its memorandum as required by Dodd-Frank.

Fed Study Endorses Bank Supervision

A new Fed staff study uses their unique access to bank examination reports from banks with less than $10 billion in assets to evaluate the extent to which supervisory reports and associated CAMELS ratings predict bank outcomes.  Looking at reports from 2004 through 2016 and thus capturing the great financial crisis, the study concludes that ratings for capital, assets, management, and earnings are effective even after controlling for factors including the ratings themselves.  Ratings are also associated with bank improvement in areas censured in earlier supervisory reports.  The analytical method is textual – i.e., based on a reading of supervisory reports then run through various models to determine impact.

Daily111822.pdf

18 11, 2022

Al112122

2022-11-18T16:46:22-05:00November 18th, 2022|3- This Week|

Things To Come

Last week, banking-agency supervisory heads found themselves before Congressional Committees that – at least in the House – will look very different in the next Congress.  As Karen Petrou’s remarks last week made clear, only some legislation will be enacted into law, but many inquiries and investigations will put the Fed, OCC, and FDIC on very hot seats.  The heat will be hottest on the right when it comes to HFSC and around the circumference of the seat in the Senate, where only the little bit that’s left of the middle is likely to view many banking-agency actions with the deference that was once the norm for all but the highest-profile or most-disastrous calls.

Al112122.pdf

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