#end-game

19 03, 2024

Daily031924

2024-03-20T11:57:36-04:00March 19th, 2024|2- Daily Briefing|

Progressive Dems Keep Pressure on Powell

 

Ahead of today’s FOMC meeting, progressive Democrats again sent a letter to Chair Powell calling for an interest-rate reduction timeline on grounds that higher-for-longer adversely affects the public good.  Signed by Sens. Warren (D-MA), Sanders (I-VT), and nineteen House Democrats, the letter calls the Fed’s monetary policy “excessively contractionary,” stressing its negative impacts on the housing market and financial stability.

HFSC GOP Takes on GSE Title-Insurance Pilot

Laying pipe before HFSC’s housing hearing tomorrow, Subcommittee Chairs Davidson (R-OH) and Huizenga (R-MI) along with Rep. Garbarino (R-NY) sent a letter to FHFA Director Thompson Friday sharply criticizing her for undue politicization given the President’s recent call for title-insurance reform.  Th

HFSC GOP Takes on GSE Title-Insurance Pilot

Joining attacks against the Basel end-game rules, Republican CFTC Commissioner Mersinger today criticized the proposal for its impact on derivatives markets.  It would, she said, disincentivize banks from offering client-clearing services to derivatives end-users, exacerbate the downward trend in the number of entities offering client clearing services, challenge the portability of customer positions, and increase systemic risk.

KC Fed Study: Vulnerable Crypto Users at Financial Risk

Buttressing calls for cryptoasset standards, the Kansas City Fed today published an article finding that crypto transactors are less financially literate and more risk tolerant compared to nonowners, stressing the importance of improved education regarding cryptoasset risks.  C

HFSC GOP Goes after Climate-Risk Standards

HFSC’s majority staff memo on Thursday’s hearing indicates that the panel of top federal bank supervisors …

22 01, 2024

Karen Petrou: How the Banking Agencies Dealt Themselves Such a Weak End-Game Hand

2024-01-22T09:22:56-05:00January 22nd, 2024|The Vault|

We said from the start that finalizing the capital rules as proposed would be difficult because I have truly never seen a sweeping rule buttressed by such shoddy analytics.  It’s of course true that lots of rules make little sense, but rules that cost companies as much as the capital rules are uniquely vulnerable to substantive and legal challenges.  This is even more likely when, as now, the proposal’s victims know how to temper political claims with well-founded assertions of analytical flaws and unintended consequences.  When regulatory credibility is effectively undermined, even those who might otherwise side with the regulators become cautious, if not actually averse to doing so.  And thus, it has come to pass for the end-game rules.

As our analyses of all of the comment letters filed last week by dozens of Democrats make clear, only a few super-progressive Democrats now stand firmly with the regulators and even they have a few qualms.  Maybe the agencies will try to bull it out – we thought so as recently as early this month in our outlook.  We were clear there that major changes would need to be made to finalize the end-game rules; now, we’re not sure even these will do.  The odds now are considerably higher for the re-proposal pressed last week by FRB Govs. Waller and Bowman.

The agencies are of course not naïve.  They knew that the final rule would have to show a few concessions to its critics.  As a result, …

19 01, 2024

Al012224

2024-01-19T16:12:35-05:00January 19th, 2024|3- This Week|

Keep Those Cards and Letters… 

Although the comment deadline on the capital standards (see FSM Report CAPITAL230) closed last Tuesday, Members of Congress viewed that deadline with the same insouciance they adopt for keeping the federal government open.  That is, they got around to it when they felt like it.  As a result, letters on the capital rule keep coming in and FedFin analyses keep sending you summaries of each of their key points.  As Karen Petrou’s Monday memo will lay out, the most surprising aspect of most of the letters from Democrats is how guardedly they express support for the capital proposal.

Al012224.pdf

3 10, 2023

DAILY100323

2023-10-03T16:38:58-04:00October 3rd, 2023|2- Daily Briefing|

Hsu Notes Benefits of International Data Hub, Warns of Nonbank Risks

In remarks today, Acting Comptroller Hsu focused on the benefits of the BIS International Data Hub, noting for example that it provides national authorities with a horizontal view of key risks affecting the global financial system difficult to obtain elsewhere.

Basel Sees End-Game in Sight, US Off Late List

Finally taking the U.S. off the tardy list, the Basel Committee today updated its Basel III implementation dashboard, finding that as of Q3 2023 the US, along with the EU, UK, China, Switzerland, South Africa, and Hong Kong are now working to adopt revisions to the credit valuation adjustment and operational risk frameworks, the standardized approach for credit risk, the minimum requirements for market risk, and the output floor – i.e., Basel’s end-game.

Daily100323.pdf

2 06, 2023

GSE-060223

2023-06-02T14:11:16-04:00June 2nd, 2023|4- GSE Activity Report|

Watch Out

As we detailed earlier this week, the OCC’s new enforcement policy is a paradigm shift in terms of the legal and reputational risk run by national banks and federal thrifts – that is, by the depository institutions that matter the most to mortgage finance.  The most important strategic driver of what these companies do in this sector are the forthcoming end-game capital rules and subsequent changes to stress testing and the broader regulatory-capital regime.  However, these new enforcement standards matter, as this report makes clear.

GSE-060223.pdf

Go to Top