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15 11, 2022

REFORM214

2022-11-22T15:27:38-05:00November 15th, 2022|5- Client Report|

Crypto, Deposit Rates, Capital Top Senate Discussion

At today’s Senate Banking oversight hearing with the banking agencies, Chairman Brown (D-OH) generally applauded the work of regulators, emphasizing the need for tough standards, like-kind rules for bigtech companies, and an inquiry into why depositor interest rates lag Fed rate hikes along lines posed earlier by Sen. Reed (D-RI).  FDIC Acting Chairman Gruenberg concurred, criticizing banks for sluggish rates.  Ranking Member Toomey (R-PA) reiterated his longstanding complaints about regulators straying outside their mission in areas such as climate change.  He also called for SLR relief to reduce Treasury-market risk and opposed pending large-bank resolution guidance (see FSM Report LIVINGWILL19) on grounds that it is unnecessary.

REFORM214.pdf

9 11, 2022

Al090522

2022-11-09T16:27:23-05:00November 9th, 2022|3- This Week|

Summer’s Over

Last week marked the end of meteorological summer and this week the end of Congressional recesses and the bit of downtime global and U.S. regulators and other officials allow themselves.  We’re gearing up for a busy session ahead of the midterms in which U.S. regulators will try to finalize as much as they can as fast as they can to avoid political obstacles should the GOP gain Congressional control and members of Congress position bills for possible enactment in the lame-duck or, should anything occur before then, as riders to a must-pass bill.  Last week did include an important announcement of a new initiative assessing the future of the Federal Home Loan Banks which, as we noted, raises big issues about a little-noticed GSE with big implications for housing policy, funding strategy, and much more….

Al090522.pdf

4 10, 2022

DAILY100422

2022-10-05T10:36:14-04:00October 4th, 2022|2- Daily Briefing|

IMF Calls for Open-End Fund Swing Pricing

The IMF today released a study of open-end funds sure to guide the action promised by SEC Chairman Gensler (see Client Report INVESTOR20).

Fed Study: Climate-Risk Insurance Cross-Subsidies Pose Moral Hazard, Financial Risk

Using homeowners’ insurance as a proxy for climate-risk insurance, a Fed staff study finds that the decoupling of rates and risk raises moral hazard and causes policy-holders in lower-risk and less restrictively regulated states to subsidize those in riskier states, where rates have been outpaced by losses.

Yellen Highlights Need for Crypto Reg at Racial Equity Roundtable

At a Treasury roundtable on racial equity and economic inequality, Treasury Secretary Yellen today reiterated the importance of the cryptoasset standards recommended yesterday by the Financial Stability Oversight Council.

Fed Sets Supervisory Standards for a Non-Traditional IDI Parent

The Federal Register today includes the Federal Reserve’s final supervisory framework for DIHCs controlled by insurance companies.

Final FHLB Listening Session Brings System Praise, Resistance to Change

We will shortly provide clients with an in-depth report on the last session FHFA held today listening to dozens of views on the future of the Federal Home Loan Bank System.

Daily100422.pdf

4 10, 2022

GSE-100422

2022-10-05T10:38:31-04:00October 4th, 2022|4- GSE Activity Report|

The Sweet Smell of Success?

Although one witness at the FHFA listening session on the Home Loan Banks took strong issue with their mission and meaning, another who called them the “most successful program of the last hundred years” pretty much summed up today’s testimony.

GSE100422.pdf

3 10, 2022

GSE-100322

2022-10-03T11:11:55-04:00October 3rd, 2022|4- GSE Activity Report|

FHLB-o-Rama

Our take on the first two days of FHFA’s FHLB “listening session” last week is that battle lines are shaping up much as we expected with the exception of a couple of powerful groups with new ideas about how the System could be put to better use for themselves and/or the public interest.  As noted when these sessions were announced, our strategic thinking centers around what FHFA can do on its own under current law or how far it decides to stretch it.  Key questions and our forecasts for next steps follow.

GSE-100322.pdf

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9 09, 2022

INSURANCE61

2022-11-09T12:56:29-05:00September 9th, 2022|5- Client Report|

Senate Banking Considers Insurance Risk, Reach

Chairman Brown (D-OH) convened a hearing today focused on the insurance industry largely focusing on the extent to which private-equity takeovers endanger insurance solvency and threaten pensioners following risk transfers.  Republicans generally denied any concerns but joined the chairman in urging U.S. agencies to play an active role in IAIS and decline to join global standards adverse to U.S. interests.  Sen. Van Hollen (D-MD) also raised the issue of insurance-industry reliance on the Home Loan Banks, but a witness representing the NAIC and the head of the Federal Insurance Office took no stand on any concerns here.  Senators also addressed insurance discrimination, reparations, cyber risk coverage, and climate hazards, but no legislation in any of these arenas was advanced.

INSURANCE61.PDF

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