#Jefferson – Federal Financial Analytics

12 07, 2023

DAILY071223

Eliza Allen2023-07-12T17:05:21-04:00July 12th, 2023|2- Daily Briefing|

SEC Concedes, Drops MMF Swing Pricing

In a startling bow to industry comments, the SEC today finalized MMF rules for institutional prime and tax-exempt funds that dispense with the proposal’s swing pricing (see FSM Report MMF19).

HFSC Bickers Over ESG, SEC Authority, Investor Rights

Today’s ESG hearing was the partisan show-down we anticipated – indeed, Rep. Sherman (D-CA) denounced the GOP for “waging war” against capitalism like Leon Trotsky.

Fed Nominations Advance

As anticipated, Senate Banking today approved the nominations of all three Federal Reserve Board nominees for the full Senate.

Warren Heightens Anti-Merger Campaign

Republicans were absent today from Senate Banking’s Economic Policy bank-merger hearing. Chair Warren (D-MA) reiterated her strong opposition to virtually all mergers, indicating her plans to reintroduce anti-merger legislation from prior Congresses (see FSM Report MERGER8).

Daily071223.pdf…

31 05, 2023

DAILY053123

Eliza Allen2023-05-31T17:00:40-04:00May 31st, 2023|2- Daily Briefing|

IMF: Housing Risk Not At GFC Level, Still Worrisome

While falling home prices are unlikely to trigger another financial crisis, an IMF blog post today finds that a drop could still harm the global economic outlook.

FDIC Tries Guarded Optimism

The FDIC’s first-quarter report on the condition of the U.S. banking industry was guardedly optimistic, but that in part appears to be due to the way in which the agency foresees its problems. Problem banks are up by 4 to 43 with $58 billion in assets among them.

End-Game Starts Soon

FRB Governor and Vice-Chair nominee Jefferson today expanded on the Fed’s financial-stability objectives, resolutely disavowing any of the credit-allocation ambitions Republicans sometimes ascribe to its work on climate risk.

CFPB Small-Business Disclosures Go Live

The Federal Register today includes the CFPB’s controversial final rule on small business data collection published late March which the Bureau says will increase transparency in small business lending, promote economic development, and combat unlawful discrimination.

FHA Expands Pandemic Mortgage Relief As Rates Rise

FHA today requested comment on a new loss mitigation proposal called the Payment Supplement Partial Claim allowing servicers to use FHA funds to bring a borrower’s mortgage current and temporarily reduce principal payments.

Daily0523123.pdf…

12 05, 2023

DAILY051223

Eliza Allen2023-05-12T17:05:25-04:00May 12th, 2023|2- Daily Briefing|

Bowman Blasts Barr

In another public sign of a growing FRB divide, Gov. Bowman early this morning followed Gov. Waller in taking strong issue with what would otherwise appear to be Board policy.

Fed Nominees Face Tough Confirmation Fight

In response to President Biden’s nomination of Philip Jefferson for Fed Vice Chair and Dr. Adriana Kugler and Lisa Cook to Fed Governor seats, Democrats have voiced strong support while Republicans are biding their time on nominations sure to prove controversial.

GOP Presses Broader FDIC, FRB Backstops

Picking up on the FDIC’s report (see Client Report DEPOSITINSURANCE119), Republicans have introduced legislation to provide limited coverage for transaction accounts and address other issues raised by recent events.

FRB-NY: SVB, Signature are 1930s Redux

Following on its post yesterday regarding changing bank-funding sources, the Federal Reserve Bank of New York today argues that the concentrated, uninsured deposit bases at SVB and SBNY are directly comparable to those of small rural banks in the 1930s.

Daily051223.pdf…

17 11, 2022

DAILY111722

Eliza Allen2022-11-17T17:18:13-05:00November 17th, 2022|2- Daily Briefing|

Warren, Durbin Demand Answers about FTX Collapse

Following FTX’s collapse, Majority Whip Durbin (D-IL) and Sen. Warren (D-MA) sent a letter today to FTX founder Sam Bankman-Fried demanding a detailed accounting of the company’s decisions and business practices. We doubt they will get an answer anytime soon, with this letter joining a flood of Congressional inquiries and likely hearings (see Client Report REFORM215).

Jefferson Supports Limited Fed Mandate

In remarks today, FRB Gov. Phillip Jefferson disputes those – including many progressive Democrats – who believe that racial equity and economic equality are an intrinsic part of the Fed’s mission. Specifically, he states that, while consumer protection, community development, and financial stability can promote inclusive growth, monetary policy cannot directly address it or why low-income households are more acutely affected by inflation.

Fed CBDC Survey Suggests Possible CBDC Upside

A new Fed literature review evaluating the macroeconomic implications of CBDC focuses on the financial inclusion and payment system impacts CBDC would have in the U.S. and advanced economies. As is usually the case with surveys, it reaches cautious conclusions, including that CBDC could increase financial inclusion for the unbanked. It might also reduce financial frictions in deposit markets, enhance retail payment-system efficiency, facilitate international transactions, and spur private-sector banking and payments innovation.

Daily111722.pdf…

1 05, 2022

AL050222

William Cross2023-03-01T14:48:24-05:00May 1st, 2022|3- This Week|

Waiting in the Wings

Although the Senate last week confirmed Lael Brainard as the Fed’s new vice chair, Mr. Powell, Mr. Jefferson, and Ms. Cook remain on hold. The reason is political and powerful: the White House needs all the Democratic votes it can get to confirm Ms. Cook, several Democrats are out with Covid, and Mr. Powell’s confirmation is being held hostage to hers. All this will work itself out and all of the nominees will get confirmed, but it will take time. Similarly, Michael Barr will soon get his confirmation hearing to serve as Fed supervisory vice chair and then on to confirmation absent any untoward remarks or unknown facts Republicans can use to block him.

Al050222.pdf…

16 03, 2022

DAILY031622

Eliza Allen2023-04-03T14:41:40-04:00March 16th, 2022|2- Daily Briefing|

U.S. Merger Construct Clarity Delayed

The DOJ and FTC have extended the deadline for comment on the current U.S. antitrust construct.

Bureau Casts Wide, Sharp Net for Consumer-Finance Discrimination

Renewing his pledge to stamp out financial discrimination, CFPB Director Chopra today announced a new enforcement policy based on a revised examination manual.

Warren Demands Still More Antitrust Reform

Building on her campaigns against bank mergers (see FSM Report MERGER8) and more recent, broader competition concerns, Sen. Warren (D-MA) and Rep. Jones (D-NY) have introduced legislation barring large mergers in any sector and allowing the Department of Justice or FTC to break up companies without necessary resort to court order.

OCC Opens Window to AML Regtech

The OCC has finalized a rule based on its proposal allowing exemptions to SAR filing requirements for national banks and federal thrifts whose AML-compliance programs satisfy a set of criteria designed to spur regtech without undermining compliance. The final rule clarifies a critical question by making it clear that the OCC can only grant an exemption if FinCEN concurs.

Fed-Nominee Voting Advances

Due to the Fed’s monetary-policy shift, today’s press conference after the FOMC meeting provided few insights into regulatory policy. Chairman Powell reiterated that he would like a full Board complement but the System is functioning fine without one.

Daily031622.pdf…

15 03, 2022

DAILY031522

Eliza Allen2023-04-03T14:45:47-04:00March 15th, 2022|2- Daily Briefing|

House Readies Still Tougher Sanctions

Thursday’s HFSC mark-up will advance a series of bills ramping up sanctions designed as amendments to the omnibus legislation advancing through Congress to punish Russia and targeted allies. We expect all these bills to pass by wide margins, with additional measures added after tomorrow’s speech from Ukraine’ president; we will provide clients with an in-depth report of the mark-up and other actions related to financial markets.

What’s Next at the Fed

As anticipated, Sarah Bloom Raskin has reportedly withdrawn her nomination following indication from Sen. Manchin (D-WV) and two moderate Republicans that they will oppose her confirmation. Although this might clear the nominations of Chairman Powell, Gov. Brainard, Lisa Cook, and Phillip Jefferson, this will occur only if Chairman Brown (D-OH) is willing to sacrifice leverage over the next nomination for the supervision vice chair.

More on What’s Next for the Fed

President Biden’s statement today on Ms. Raskin’s withdrawal clarifies the outlook detailed in our alert earlier this afternoon. After praising the nominee, the president urges the Senate to quickly confirm Mr. Powell, Ms. Brainard, Ms. Cook, and Mr. Jefferson.

Daily031522.pdf…

14 03, 2022

DAILY031422

Eliza Allen2023-04-03T15:04:42-04:00March 14th, 2022|2- Daily Briefing|

IOSCO Adds Carbon-Market Review to Work Plan

IOSCO today released a comprehensive sustainability work plan, moving beyond the investor-focused disclosures it previously espoused set for action next week by the SEC. Going forward, global securities regulators have now prioritized reducing greenwashing and encouraging reliable ESG-impact assessment. IOSCO will thus review both the pending IFRS climate- and general-sustainability disclosure requirements and final standards.

Raskin Faces Still Higher Confirmation Odds

Sen. Manchin (D-WV)’s statement today that he will not support Sarah Bloom Raskin makes her path to confirmation difficult, if not impossible. For her appointment as Fed Supervisory Vice Chair to advance, at least one Republican would need to break ranks on the Senate floor even if Ranking Member Toomey (R-PA) is unable to hold his blockade.

Daily031422.pdf…

16 02, 2022

DAILY021622

Eliza Allen2023-04-04T15:53:29-04:00February 16th, 2022|2- Daily Briefing|

FSB Fears Crypto, Contemplates Response
The FSB today issued an in-depth report on systemic crypto risk, concluding that this could so quickly become a real threat that it could warrant preemptive intervention. Even so, the report provides no recommendations on how best to proceed, with global regulators confining themselves to a detailed presentation on vulnerabilities and resulting risk.

CFPB Opens Regulatory Portal to All Petitioners
Taking what it says are steps to democratize its rulemaking, the CFPB today established a process via which consumers may directly petition it to commence a rulemaking, also releasing a guide explaining the submission process.

FedFin Assessment: What’s Next for the Fed
As requested, this alert updates clients on the implications of yesterday’s GOP boycott of the confirmation votes in the Senate Banking Committee for President Biden’s FRB-leadership slate. As anticipated (see Client Report FEDERALRESERVE66), Sarah Bloom Raskin’s nomination as supervisory vice chair is proving to be particularly problematic, leading Democrats to try to attach Chairman Powell’s far more popular confirmation to the rest of the slate in hopes of forcing it through.

Daily021622.pdf…

3 02, 2022

FEDERALRESERVE69

Arezou Rafikian2023-04-05T14:06:42-04:00February 3rd, 2022|5- Client Report|

FedFin Assessment: Raskin Confirmation Possible, But a Squeaker

As this report details, all three Fed nominees before the Senate Banking Committee today emphasized the vital importance of Fed independence and their anti-inflation zeal to quell GOP opposition and cement it among moderate Democrats.

FEDERALRESERVE69.pdf…