#scenario analysis – Page 3 – Federal Financial Analytics

22 06, 2022

FedFin on: Climate Risk Management

Arezou Rafikian2023-01-26T11:37:39-05:00June 22nd, 2022|The Vault|

The Basel Committee has finalized its proposed climate-risk management principles largely unchanged from its proposal, establishing over-arching goals at which both banks and their supervisors are asked to aim. Much in the final standards echoes proposed OCC risk-management standards proposed in a slightly different form by the FDIC and likely soon to be taken up by the Federal Reserve in inter-agency U.S. goals. Neither Basel’s standards nor these U.S. principles are…..

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

…

22 06, 2022

CLIMATE14

Eliza Allen2023-01-26T11:37:31-05:00June 22nd, 2022|1- Financial Services Management|

Climate Risk Management

The Basel Committee has finalized its proposed climate-risk management principles largely unchanged from its proposal, establishing over-arching goals at which both banks and their supervisors are asked to aim. Much in the final standards echoes proposed OCC risk-management standards proposed in a slightly different form by the FDIC and likely soon to be taken up by the Federal Reserve in inter-agency U.S. goals. Neither Basel’s standards nor these U.S. principles are binding in terms of specific requirements related to capital, scenario analysis, stress testing, or governance. Indeed, Basel’s final standards back away from suggestions in the consultation about the need in the near term for specific climate-related capital charges and for stress tests. However, these standards are intended to and likely will lay the groundwork for more binding actions as regulators gain more confidence in the data on which concrete requirements can be based and judged.

CLIMATE14.pdf…

8 06, 2022

DAILY060822

Eliza Allen2023-02-10T15:47:09-05:00June 8th, 2022|2- Daily Briefing|

CFTC Contemplates Broad Climate-Risk Action Plan

Acting on the President’s executive order (see FSM Report GREEN8) , the CFTC is seeking comments on how climate risk affects the derivatives market, underlying commodities markets, the entities it regulates, and financial institutions that might be directly affected by climate risk in this sector. Supporting FSOC’s work, the Commission also seeks comments on systemic risk implications as well as near-term initiatives.

CFPB Plans Fit-for-Purpose Data-Privacy Regime

When we yesterday predicted that Sen. Brown’s comments about data privacy would spark CFPB action, we didn’t expect that it would come today. However, Director Chopra used his opening comments and those throughout an advisory-committee meeting to argue, as had the Senate Banking chairman, that personal data are now being used for purposes adverse to fair markets and consumer protection.

Board Soon to Get Barr

The Senate Banking Committee today voted 17-7 to advance Michael Barr’s nomination for Vice Chairman for Supervision at the Federal Reserve to a full Senate vote. Given Sen. Toomey (R-PA)’s support for Mr. Barr, rapid confirmation is almost certain. Those voting against Mr. Barr were Sens. Shelby (R-AL), Crapo (R-ID), Tillis (R-NC), Kennedy (R-LA), Hagerty (R-TN), Cramer (R-ND), and Daines (R-MT).

Daily060822.pdf…

31 05, 2022

DAILY053122

Eliza Allen2023-02-21T13:29:23-05:00May 31st, 2022|2- Daily Briefing|

Basel Finalizes Climate Standards, Advances Those for Crypto

The Basel Committee today announced progress on two key policy concerns: climate risk and cryptoassets. Although it did not release its final action, the Committee has finalized proposed high-level principles for climate-risk management and scenario analysis (see FSM Report CLIMATE12). As we noted in our initial analysis, Basel tried here to give banks and regulators considerable time to ramp up climate-risk analytics and yet make clear that doing so is urgent.

Brown Portrays Wells Fargo as Repeat Offender

Senate Banking Chairman Brown (D-OH) today sent a blistering letter to Wells Fargo CEO Charles Scharf accusing the bank of failing to combat racial and gender discrimination in light of allegations that Wells Fargo conducted fake job interviews for minority and female candidates. The Senator also contends that the bank’s commitment of $150 million to its new refinancing program in response to the chairman’s letter is inadequate.

Daily053122.pdf…

21 03, 2022

DAILY032122

Eliza Allen2023-04-03T13:15:47-04:00March 21st, 2022|2- Daily Briefing|

FSB Cites Growing FinTech/BigTech Concerns, Policy Solutions Await

The FSB today published its latest assessment of fintech, now adding bigtech to the picture and elaborating on the array of policy concerns it and BIS have previously sketched out. We will shortly provide clients with an in-depth analysis of a report which concludes that the pandemic has significantly accelerated digital transformation. This improves financial inclusion, but raises growing risk of structural change by way of dominant players outside the regulatory perimeter.

SEC Sets Out Sweeping U.S. Climate-Risk Disclosure Construct

On unsurprising party lines (3-1), the SEC today released proposed climate-risk disclosures for public registrants. Although Congressional Democrats pressed for express materiality standards, the proposal relies on current interpretations of what must be disclosed. Although Congressional Republicans derided the proposal as far outside the Commission’s mandate, it would require not only Scope 1 and 2 disclosures, but also an initial construct designed to lead gradually, but indisputably, to Scope 3 disclosures from larger companies.

Daily032122.pdf…

7 03, 2022

DAILY030722

Eliza Allen2023-04-04T12:23:58-04:00March 7th, 2022|2- Daily Briefing|

Liang Reiterates Climate, Digital Worries

Treasury Under-Secretary Liang’s comments to international bankers today addressed the U.S. financial-reform agenda after noting market turbulence and reiterating the importance and effectiveness of current Russian sanctions.

Mandatory Disclosures for Mandatory Arbitration?

Ahead of a hearing tomorrow, Senate Banking Chairman Brown (D-OH) released a statement on S. 3755, legislation cosponsored by senior Democrats on both the Banking and Judiciary Committees banning pre-dispute arbitration clauses and class-action waivers.

Hsu Emphasizes Sanctions Compliance, Climate, Inclusion

Acting Comptroller Hsu today told international bankers that they must ensure compliance with U.S. sanctions, heighten cybersecurity vigilance, and work together to protect continuing trust in cross-border finance.

FinCEN Sets Up Red Flags, High Alert

FinCEN today issued sanctions “red flags”, assisting compliance, but also laying out clearer markers for enforcement should its concerns about cryptocurrency and other possible evasions remain at individual institutions or exchanges. The release emphasizes SARs for immediate reporting of suspicious activities related to Russian state actors and/or oligarchs and related entities.

GOP Seeks to Widen Russian Financial Sanctions

As Congress and the White House wrestle with additional ways to sanction Russia, senior House Republicans today have advanced a package of bills which may well find at least some Democratic support. Among the most likely to advance on a bipartisan basis is H.R. 6900 from Rep. Huizenga (R-MI) expanding current sanctions on Russian sovereign debt to bar U.S. financial institutions from secondary dealings in Russian sovereign debt regardless of issuance date.

Daily030722.pdf…

14 01, 2022

Daily011422

Arezou Rafikian2023-04-24T15:22:34-04:00January 14th, 2022|2- Daily Briefing|

Biden Fills Out Controversial Fed Slate

As anticipated in our report earlier this week forecasting 2022 regulatory action (see Client Report REFORM211), President Biden today nominated Sarah Bloom Raskin to become the Fed’s supervisory vice chair.

Daily011422.pdf…

10 01, 2022

Al011022

Arezou Rafikian2023-04-25T14:02:41-04:00January 10th, 2022|3- This Week|

2022 BUILDING BLOCKS

We hope the holidays gave you a relaxing break no matter your travel and omicron worries. FedFin staff stayed busy because so did federal policy-makers. Actions in the last two weeks or so lay a solid platform for game-changing decisions in 2022 on…

Al011022.pdf…

24 11, 2021

GSE-112421

Arezou Rafikian2023-05-23T15:06:17-04:00November 24th, 2021|4- GSE Activity Report|

GSEs Get Greener

Because FHFA tends to take its cue from both the Basel Committee on Banking Supervision and its U.S. cousins, we here drill down to look at the housing-finance implications of the proposed global framework we assessed in a recent in-depth report. Although Basel’s standards are only high-level principles and even then not yet final, we expect this framework to combine with work under way at the Fed and OCC to pressure FHFA to speedier action on express climate-risk governance and scenario-analysis requirements.

GSE-112421.pdf…

22 11, 2021

CLIMATE12

Arezou Rafikian2023-05-23T15:28:04-04:00November 22nd, 2021|1- Financial Services Management|

Global Climate-Risk Management and Supervisory Principles

Following the UN’s COP26 climate-risk summit, the Basel Committee has proposed high-level principles guiding risk management and supervision related to both physical and transition climate risk.

CLIMATE12.pdf…