#Hsu – Page 2 – Federal Financial Analytics

12 01, 2022

FedFin Forecast: Prudential Regulatory Framework Set for Structural Change Largely Built on Current Standards

Arezou Rafikian2023-04-24T15:49:23-04:00January 12th, 2022|The Vault|

As promised, FedFin begins our 2022 forecasts with this in-depth report on bank regulation. In general, we conclude that the context of decisions in 2022 and beyond will shift from a focus on tailoring efficiencies and burden relief to one emphasizing risk mitigation, fairness, equity, and — for the very biggest banks — a smaller systemic footprint. This report looks at the impact of pending personnel decisions as well as the outlook for climate-risk, new capital rules, FBO standards, and other key issues….

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

16 12, 2021

FedFin: Bank Merger Policy

Arezou Rafikian2023-05-22T16:11:59-04:00December 16th, 2021|The Vault|

Released in a highly-controversial fashion (see below) by two Democrats on the FDIC’s board, this RFI posits the need for a significant review of mergers involving insured depository institutions (IDIs) due to many changes in the financial industry and, so it says, the lack of substantive competitive analysis over past decades even of the largest transactions.

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

2 12, 2021

FedFin: Going Down?

Arezou Rafikian2023-05-23T13:59:59-04:00December 2nd, 2021|The Vault|

Two recent studies add fuel to the fire we first spotted late last year: demands for ARMs that only go down. Director Thompson’s latest scorecard combines with her equitable-finance mission to make this option a top political priority even if its market feasibility remains at best uncertain.

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

1 12, 2021

FedFin: HFSC Throws Partisan Brickbats without Financial-Policy Impact

Arezou Rafikian2023-05-23T14:19:51-04:00December 1st, 2021|The Vault|

Continuing the partisan and often-acrimonious tone of the Senate Banking hearing (see Client Report FEDERALRESERVE64), HFSC today heard from Chairman Powell and Secretary Yellen. Much of the session was preoccupied by differing views of whom or what is to blame for inflation, with Members also squaring off on the benefit of the BBB and infrastructure bills. Many financial-policy priorities were sidelined by these big-picture battles, with the session omitting discussion of topics such as digital currency, bank consolidation, and even fair lending and diversity.

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

22 11, 2021

Analysis of: Global Climate-Risk Management and Supervisory Principles

Arezou Rafikian2023-05-23T15:28:18-04:00November 22nd, 2021|The Vault|

Following the UN’s COP26 climate-risk summit, the Basel Committee has proposed high-level principles guiding risk management and supervision related to both physical and transition climate risk.

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

18 11, 2021

FedFin on: Omarova Nomination Threatened

Arezou Rafikian2023-05-25T16:01:16-04:00November 18th, 2021|The Vault|

As expected, today’s hearing with Comptroller-nominee Saule Omarova included an unprecedented amount of fireworks for what is normally a low profile appointment. In this report, we omit analysis of the debate on Ms. Omarova’s origins and alleged Marxism, instead assessing policy issues germane should Ms. Omarova succeed in what seems an increasingly difficult confirmation. Notably, moderate Democrats such as Sens. Tester (D-MT) and Warner (D-VA) were clearly concerned with Ms. Omarova’s opposition to the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA), while Republicans lambasted her for previous comments about cutting off credit to the oil and gas industry and proposals they believed would nationalize U.S. banking.

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

7 09, 2021

Karen Petrou: The Coming Fair-Lending Fracas

Arezou Rafikian2023-08-22T12:43:29-04:00September 7th, 2021|The Vault|

A week ago Thursday, I was honored to participate in a Congressional Black Caucus Foundation forum assessing the extent to which the Fed exacerbates U.S. economic inequality. Views were mixed on that front, but several panelists stoutly condemned financial institutions for actively discriminating against people and communities of color and the Fed for allowing them to get away with it. That won’t be the last we hear of this.

As our recent assessment of the latest mortgage data make clear, these allegations are not without merit. That underlying factors are complex and sometimes include contradictory evidence does not belie the fact that data remain problematic, the industry is deeply distrusted, and the White House has made racial equity a top-priority Presidential action item. First to what the data do and don’t show and then to what will be done about them unless some of the things that can instead be done are quickly done.

The latest HMDA data show troubling denial disparity ratios (DDRs), interest-rate, and cost disparities when minorities are compared to whites. The DDR for Blacks was 2.6:1, rates were .125 percentage points higher, and the cost of a loan was 38% more. Black credit scores were the lowest among demographic groups (690) and loan amounts were the smallest, but these differences are still striking.

Little noticed but even more puzzling are the DDRs for Asians versus whites. Asian DDRs were 1.4:1 even though credit score and loan amounts were the highest of all demographic groups. …