9 01, 2023


2023-01-09T16:42:26-05:00January 9th, 2023|2- Daily Briefing|

FRB Staff Criticizes GSIB Climate Action Plans

A new FRB staff paper assesses GSIB climate-action plans, finding them better but still wanting with regard to risk measurement, disclosure, and management as well as the alignment of financing activities with stated net-zero targets.  The paper largely depends on GSIB disclosures, likely not only leading authors to call for improvements given the well-known early stage of these releases, but also making uncertain its analysis of opaque areas such as internal policy alignment.  The study notes the lack of standardization in GSIB disclosures, efforts, and terminology but does not seem to address it in reaching its conclusions.

FRB-NY Staff Find Banks Target Repurchases to Constrain Capital Distribution

Reaching no conclusions about the wisdom of the Fed’s 2020 restrictions on bank capital distributions, a new blog post from FRB-NY staff finds that changes in repurchases account for almost all of the movement in bank shareholder payout since the pandemic and that the greater volatility of repurchases relative to dividends reflects long held trends.  This is because changes to repurchases are more discretionary than “highly visible” dividend changes.


10 02, 2022


2023-04-05T09:57:51-04:00February 10th, 2022|2- Daily Briefing|

KC Fed: 2020 Capital-Distribution Constraints Worked
Touching on a subject of considerable sensitivity as well as a policy issue subject to change under a new Fed, the Kansas City Federal Reserve Bank has released a study arguing that 2020’s limits on capital distributions contributed to greater systemic resilience.  The paper tracks both share buy-backs and dividends over recent years, noting that GSIBs often distributed more than their income.  Repurchases succeeded dividends as the principal capital-distribution medium since the great financial crisis, a shift found to give banks more flexibility to adjust distribution levels without significant investor backlash.

FHFA Leads Way on U.S. AI/ML Standards
FHFA today issued the first U.S. financial-agency supervisory guidance on AI/ML use by Fannie Mae, Freddie Mac and Common Securitization Solutions (not also the FHLBs).  This goes well beyond the 2020 RFI released so far by the banking agencies (see FSM Report AI), with the standards also reflecting FHFA’s new equity focus in supervisory guidance specific to inclusive considerations.

Toomey Takes on the Entire Reserve-Bank System
In remarks today, Senate Banking Ranking Member Toomey (R-PA) heightened his critique of the Federal Reserve’s regional banks, suggesting that the System needs a sweeping overhaul.

CFPB Assesses Overdraft-Fee Marketplace
Reflecting the CFPB’s continuing critique of overdraft fees (see FSM Report CONSUMER38), the Bureau today posted a chart of overdraft and NSF fees at the largest banks, calling recent changes “encouraging.”  However, the release does not retract recent allegations about their anti-consumer or -competition impact, …

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