#discount window – Federal Financial Analytics

18 05, 2023

DAILY051823

Eliza Allen2023-05-18T16:51:22-04:00May 18th, 2023|2- Daily Briefing|

FRB-NY: SLR, Other Bank Stress Led to ONRRP Growth

A new post from the Federal Reserve Bank of New York summarizes a recent staff report analyzing the ONRRP’s explosive growth. As we have noted before, the study confirms that the combination of a revised SLR and strong deposit in flows in 2021 severely stressed bank balance-sheet capacity, leading large institutions to push deposits to sponsored MMFs. Indeed, bank-sponsored MMFs had larger inflows than independent MMFs at this time and banks with tighter capital ratios moved disproportionately more funds to their sponsored MMFs.

Reserve Banks Reconsider Liquidity-Backstop Standards, Set-Up

FRB-Dallas President Logan today reinforced findings in recent bank failures about the importance of advance planning for accessing FRB liquidity, urging banks to have legal documentation and collateral arrangements well in advance of possible stress. Presaging standards we expect shortly from the banking agencies, she also urged regular operational dry runs to ensure ready access to funding sources such as Home Loan Banks and Fed liquidity windows, noting that this would reduce discount-window stigma.

Daily051823.pdf…

21 04, 2023

DAILY042123

Eliza Allen2023-04-21T17:02:12-04:00April 21st, 2023|2- Daily Briefing|

House Republicans Renew Anti-Woke Banking Battle

In the latest GOP-led action against “woke” finance, HFSC Financial Institutions Subcommittee Chairman Barr (R-KY) yesterday reintroduced the Fair Access to Banking Act (H.R. 2743), which would prevent large banks from limiting or refusing services to the fossil-fuel, digital-asset, and gun industries.

FRB Review Of CBDC Comments Leaves Open All Options

The Federal Reserve late yesterday released a summary of public comments received on its 2022 CBDC discussion draft (see FSM Report CBDC10), arraying comments in ways that make it difficult to judge who said what or where the preponderance of comments is to be found.

FSOC Advances Activity, Nonbank Systemic Designation, Regulation

As anticipated, all FSOC members today voted to advance two key proposals to redesign the U.S. systemic framework and speed action on two clear systemic designation priorities: hedge-fund interconnectedness with the banking system and nonbank mortgage companies.

Waters Praises FSOC, Presses for New Bank Standards

While commending FSOC’s action earlier today, HFSC Ranking Member Waters (D-CA) urged it to quickly go farther, pressing the Council to send the FRB and other banking agencies recommendations for post-SVB reforms.

BIS Paper: Fintech Innovation Amplifies Inequality

A new BIS working paper on fintech concludes that increased financial-technology innovation amplifies inequalities between sophisticated and unsophisticated investors and that bridging this gap will require policy focus on fintech accessibility and usability.

Daily042123.pdf…

14 04, 2023

DAILY041423

Eliza Allen2023-04-14T16:36:06-04:00April 14th, 2023|2- Daily Briefing|

Waller Defends Fed SVB Policy

FRB Gov. Waller today defended recent Fed actions, reiterating that SVB was an idiosyncratic risk but it also posed systemic run risk, the most fundamental threat to financial stability.

FHFA Opens the Suggestion Box

FHFA today sought views on its corpus of GSE regulation.

FRB-NY Proposes Novel Way To Prevent Bank Runs

A new post from FRB-NY staff adapts the minimum-balance-at-risk (MBR) policy long discussed for MMFs (see FSM Report MMF16) to bank deposits to determine the extent to which it would quell uninsured-deposit runs.

CFPB Announces Revisions To APOR Methodology

The CFPB today announced a revised version of its Methodology for Determining Average Prime Offer Rates (APOR).

Bowman Rejects Calls For New Rules

In remarks today, FRB Gov. Bowman again differed from Vice Chairman Barr, emphasizing that recent failures are likely not an “indictment” of current rules and that judgment should await the Fed’s report and those from others.

Daily041423.pdf…

24 03, 2023

FedFin Analysis: Whom and What the FDIC and Fed Can Save How

Arezou Rafikian2023-03-24T17:05:38-04:00March 24th, 2023|The Vault|

Recent editorials and other media have often said that the FRB and/or FDIC have powers or taken actions that is not the factual case as we understand it. Members of Congress also appear sometimes willing to make assertions about what agencies can do now even if it is unclear if there is statutory authority to do so. We have provided individual clients with key clarifications, but do so now more generally to support strategic and advocacy decision-making. Of particular importance is the authority the FDIC is said to have or lack related to uninsured deposits; as detailed below, the agency actually has significant authority to do so as well as even to back BHC debt, as long as certain stringent conditions are met. As detailed in FSM Report RESCUE65, Congress limited both the FDIC and Fed in hopes that….

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

24 03, 2023

RESCUE79

Eliza Allen2023-03-24T16:30:20-04:00March 24th, 2023|5- Client Report|

FedFin Analysis: Whom and What the FDIC and Fed Can Save How

Recent editorials and other media have often said that the FRB and/or FDIC have powers or taken actions that is not the factual case as we understand it. Members of Congress also appear sometimes willing to make assertions about what agencies can do now even if it is unclear if there is statutory authority to do so. We have provided individual clients with key clarifications, but do so now more generally to support strategic and advocacy decision-making. Of particular importance is the authority the FDIC is said to have or lack related to uninsured deposits; as detailed below, the agency actually has significant authority to do so as well as even to back BHC debt, as long as certain stringent conditions are met. As detailed in FSM Report RESCUE65, Congress limited both the FDIC and Fed in hopes that the Dodd-Frank orderly-liquidation authority (OLA, see FSM Report SYSTEMIC30) would permit orderly resolution of even the largest banks and nonbanks without long-term federal support; a subsequent FedFin report will bring the assessment of OLA powers into the current crises’ context given that Congress will surely seek to determine why the FDIC and its sister authorities chose to provide taxpayer support rather than deploy OLA.

RESCUE79.pdf…

18 01, 2023

DAILY011823

Eliza Allen2023-01-18T16:37:19-05:00January 18th, 2023|2- Daily Briefing|

FSB Pledges Further Work on Bank NBFI Capital Exposures, MMFs, OEFs

The FSB today published an update on its non-bank financial intermediation (NBFI) reforms, finding that further progress is needed in implementing capital requirements for bank exposures to investment funds and large exposures.

CFPB Tells Examiners To Look At Servicer Fees, Foreclosure Process

The CFPB today released updated Mortgage Servicing Examination Procedures reflecting newly identified consumer risks since its 2016 update as well as pandemic-era servicing changes.

FRB-NY: Small Banks Behind Recent Discount Window Lending Spike

A new post from FRB-NY staff looks at why discount-window lending has recently increased, providing data that make it still more interesting that Silvergate chose emergency support from Home Loan Banks, not the Fed.

Daily011823.pdf…