#RFC – Federal Financial Analytics

The Secondary-Market Suggestion Box

As we noted yesterday, the global banking, securities, and insurance regulators who comprise the Financial Stability Board (FSB) are heading back to look again at securitization to see if the post-08 framework it crafted still works. The FSB is in our view increasingly irrelevant to home- and host-country rulemaking, but that’s not to say it’s totally toothless. If – and this is a big if – the FSB comes up with concrete suggestions in key areas such as revisions to regulatory capital or risk-retention standards, U.S. agencies will take a hard look.

GSE-083123.pdf…

Daily083023

William Cross2023-08-31T07:41:42-04:00August 30th, 2023|2- Daily Briefing|

FRB Chicago Study Finds Nonbanks Act as Global Shock Absorbers

A new empirical FRB Chicago study finds that nonbanks act as global shock absorbers during times of stress because tightening US monetary policy is associated with increased nonbank syndicated dollar lending compared to banks. This of course frustrates monetary-policy transmission in the U.S., but the paper focuses on EMEs where the principal risk is macroeconomic and financial shock.

Comment Period Reopened on Controversial Custody Proposal

The SEC today reopened the comment period on its controversial investment-advisor asset custody NPR. As noted (see FSM Report CUSTODY5), this thorough rewrite would redefine qualified custodians to exclude most crypto firms, as well as foreign firms and other entities the Commission does not believe ensures sufficient safeguards.

FSB Seeks Comment On Securitization Reforms

The FSB today announced that it will evaluate the impact of G20 securitization reforms (see FSM Report ABS37) on its financial-stability objectives as well as on securitization markets. The evaluation will focus on regulatory capital regulation governing securitization exposures and RMBS and CDO/CLO market segments, although the FSB will also consider including other segments.

Warren Blasts Powell, Alleging Capital-Reg Delay, Concessions

Expanding on her longstanding criticism of Chair Powell, Sen. Warren (D-MA) sent him a letter today chastising him for what she views as undue deference to big-bank lobbying and demanding that he press for the rapid completion of tough new capital rules.

Daily083023.pdf…