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29 08, 2023

DAILY082923

2023-08-29T16:55:20-04:00August 29th, 2023|2- Daily Briefing|

Agencies Advance Controversial Long-Term Debt, Resolution Proposals

The FDIC, OCC, and FRB today tackled several critical resolution issues in the wake of recent bank failures, proposals that raise strong objections from regional banks despite FDIC and FRB unanimity today on at least one of them.  As anticipated, the FDIC and FRB approved an NPR that would impose minimum long-term debt requirements for banks and BHCs with assets over $100 billion, with the FDIC and Fed boards voting unanimously in favor even as FRB Gov. Bowman strongly dissented despite a three-year transition period.  Similar to the ANPR floating this rule (see FSM Report RESOLVE48), the proposal would require large banks to hold a minimum amount of eligible long-term debt equal to the greater of six percent of risk weighted assets, 3.5% of average total consolidated assets, or 2.5% of total leverage exposure for banks subject to the SLR.

Daily082923.pdf

27 07, 2023

DAILY072723

2023-07-27T17:47:02-04:00July 27th, 2023|2- Daily Briefing|

FSB Tries to Calm CoCo Confusion

Doubtless responding to the CoCo chaos when Credit Suisse failed, the FSB today issued a report laying out how cross-border crisis-management groups are to handle unallocated TLAC (UTLAC) such as the “alternative Tier 1” bonds popular in the EU.

FDIC 3-2 Vote Presages Knock-Down Basel Battle

As anticipated, the FDIC today voted 3-2 to issue a sweeping rewrite of U.S. regulatory capital requirements.

Divided, Cautious Fed Advances End-Game, GSIB Rewrites

As anticipated, Gov. Bowman today voted against the new capital framework, as did Gov. Waller; as a result, the vote was 4-2.

Stablecoin Bill Advances, Compromises to Come

At a fiery HFSC markup today, Chairman McHenry (R-NC) announced that bipartisan negotiations had broken down largely due to the White House, choosing to proceed to a final package as he remains open to amendment before floor action.

House Republicans Skewer Basel Rules

Hill comment so far in response to the new capital rules is sparse.

Daily072723.pdf

6 06, 2023

DAILY060623

2023-06-06T16:49:29-04:00June 6th, 2023|2- Daily Briefing|

HFSC Tackles China, CBDC

The committee memo for the HFSC National Security Subcommittee hearing tomorrow makes it clear that China is the main focus of dollar-sovereignty considerations and CBDC will play a central role in this debate.

CFPB Wants Chatbots To Stop Talking

The CFPB today released an “issue spotlight” looking at how AI in general and chatbots in particular may adversely affect retail-finance consumers, concluding that chatbots may be useful for simple inquiries, but effectiveness wanes as complexity rises.

Third-Party Guidance Gets Still More Stringent

After repeatedly saying that third-party risk management is a top priority, the banking agencies today finalized a 2021 proposal (see FSM Report VENDOR9) tightening current requirements.

GOP Questions ONRRP, Treasury RWAs

Although HFSC Financial Institutions Subcommittee Chairman Barr (R-KY) today highlighted the legislation on which today’s hearing was to focus, much of the discussion over Treasury-management policy revisited last week’s debt-ceiling battles.

Daily060623.pdf

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