#LCR – Federal Financial Analytics

17 03, 2023

AI032023

William Cross2023-03-17T16:53:34-04:00March 17th, 2023|3- This Week|

What A Week That Was

As the flood of FedFin reports, alerts, and client calls makes clear, the last ten days have not only been busy – they are a threshold moment. Now, U.S. and global bank regulation will proceed to much unfinished business after 2008 along with targeted changes to address hard lessons from SVB, SBNY, Credit Suisse, and broader market stress as this seems still to be evolving. FedFin is continuing to advise clients of each twist and turn in U.S. and global financial policy, but we are also stepping back to provide forward-looking in-depth reports as the shape of things to come becomes clear.

AI032023.pdf

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17 03, 2023

FedFin Assessment: Future of U.S. Bank Capital, Liquidity, Structural Regulation

Eliza Allen2023-03-17T16:50:38-04:00March 17th, 2023|The Vault|

In this report, we continue our policy postmortem of SVB/SBNY and, now, so much more. Prior reports have assessed the overall political context (see Client Report RESOLVE49) and likely changes to FDIC insurance (see Client Report DEPOSITINSURANCE118), with a forthcoming Petrou op-ed in Barron’s focusing on specific ways to reform federal deposit insurance to protect only the innocent. In this report, we look at some key regulatory changes likely as the banking agencies reevaluate the regional-bank capital, liquidity, and the IDI/BHC construct. As noted in our initial assessment and thereafter, we do not expect meaningful legislative action on the Warren, et. al. bill to repeal “tailoring” requirements, but we do expect bipartisan political pressure not just for supervisory accountability (see another forthcoming report), but also regulatory revisions.

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

17 03, 2023

REFORM216

Eliza Allen2023-03-17T14:27:00-04:00March 17th, 2023|5- Client Report|

FedFin Assessment: Future of U.S. Bank Capital, Liquidity, Structural Regulation

In this report, we continue our policy postmortem of SVB/SBNY and, now, so much more. Prior reports have assessed the overall political context (see Client Report RESOLVE49) and likely changes to FDIC insurance (see Client Report DEPOSITINSURANCE118), with a forthcoming Petrou op-ed in Barron’s focusing on specific ways to reform federal deposit insurance to protect only the innocent. In this report, we look at some key regulatory changes likely as the banking agencies reevaluate the regional-bank capital, liquidity, and the IDI/BHC construct. As noted in our initial assessment and thereafter, we do not expect meaningful legislative action on the Warren, et. al. bill to repeal “tailoring” requirements, but we do expect bipartisan political pressure not just for supervisory accountability (see another forthcoming report), but also regulatory revisions. While Republicans strongly opposed tougher capital rules when Chairman Powell appeared before them just last week (see Client Report FEDERALRESERVE73), we expect them now only to make token statements of concern about any changes that do not adversely affect smaller banking organizations. In addition to looking at specific regulatory rewrites, this report assesses timing, noting in particular how the pending end-game rules could serve as the vehicle for changes the agencies hope to muster quickly in order to minimize demands for structural change to their own powers.

REFORM216.pdf…

7 11, 2022

DAILY110722

Eliza Allen2022-11-07T17:22:53-05:00November 7th, 2022|2- Daily Briefing|

Toomey Calls for More Fed Transparency

Sen. Toomey (R-PA) continued Republican demands for still more Fed transparency, sharply criticizing the Fed’s Friday proposal to provide some transparency into which institutions are granted master accounts.

Sweeping CFPB Fee Restrictions Now Effective

The Federal Register today includes the CFPB’s circular on Unanticipated Overdraft Fee Assessment Practices and a bulletin now effective on Unfair Returned Deposited Item Fee Assessment Practices.

CFPB Advances Bigtech Market Power Campaign

Continuing its campaign against bigtech’s market power, the Federal Register today includes the CFPB’s notice and request for comment on what fees bigtech payment operators levy on users for violations of acceptable use policies and whether their policies include provisions to restrict user platform access.

Fed Staff Paper Tries To Gauge Social Welfare Impact Of Liquidity, Capital Regs

A new Fed staff study attempts to lay out the social costs and benefits of large-bank liquidity and capital regulation.

Warren Continues Campaign Against Wells Fargo, Zelle

Sen. Warren (D-MA) today continued her campaign against Zelle by sending letters to its parent company and Wells Fargo, taking particular aim at what she deems the latter’s failure to provide adequate claims and reimbursement data and labelling responses to previous letters “insulting.”

Warren Denounces Fed “Culture of Corruption”

Sen. Warren (D-MA) today also continued her campaign against Chairman Powell, sending him a letter alleging “another set of egregious and embarrassing ethics breaches.”

Daily110722.pdf…

7 07, 2022

CRYPTO29

Eliza Allen2023-01-24T15:33:50-05:00July 7th, 2022|1- Financial Services Management|

Global Standards for Bank Cryptoasset Exposures

Global banking regulators are trying a new, but still stringent, approach to governing bank exposures to certain types of crypto assets, revising an initial consultation to focus more on supervisory limitations than on extremely punitive capital requirements for what are deemed to be lower risk cryptoassets. Under the new approach, it will be easier for banks to offer, facilitate, or otherwise enable tokenized forms of traditional assets without disproportionately-costly capital charges as long as an array of risk-mitigation restrictions are met. Higher-risk cryptoassets would come under exposure limits as well as costly capital requirements, although the new consultation does permit these to be reduced via various hedging methods that might make such stablecoins viable products in certain circumstances.

CRYPTO29.pdf…