#TLAC

Home/Tag:#TLAC
16 11, 2022

REFORM215

2022-11-22T15:02:46-05:00November 16th, 2022|5- Client Report|

HFSC Session Brings Crypto Action to Fore, “Holistic” Capital Under Scrutiny

HFSC today largely focused bank regulators on the same range of questions posed at yesterday’s Senate Banking session (see Client Report REFORM214).  However, Chairwoman Waters (D-CA) emphasized the importance of federal legislation in sharp contrast to Chairman Brown (D-OH), also announcing a hearing in December on FTX.  Ranking Member McHenry (R-NC), who will become HFSC chairman in the next Congress, concurred with the chairwoman’s views on the need for digital-finance statutory reform.  However, he took strong issue with inter-agency policy with regard to new capital rules, merger restrictions, and third-party relationship constraints.  Republican members also targeted Vice Chairman Barr’s holistic capital review, arguing that banks are currently well capitalized and that additional standards would hamper lending.  Mr. Barr indicated that an SLR rewrite is part of the holistic review but not immediately necessary to quell Treasury-market volatility or illiquidity.  As discussed in more detail below, regulators promised banking-sector crypto rules at least as stringent as Basel’s proposal.

REFORM215.pdf

 …

9 11, 2022

DAILY110922

2022-11-09T16:59:00-05:00November 9th, 2022|2- Daily Briefing|

FIO, HHS Plan Longer Ponder on Federal Cyberinsurance

The Federal Insurance Office and the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency today extended the comment deadline for comments on whether a federal insurance response is warranted for catastrophic cyber risk.  The earlier notice asked what type of catastrophic attacks on U.S. critical infrastructure are most likely, how best to measure their effect, the current catastrophic insurance landscape, and how any federal insurance should be structured.

FDIC Board Stands By DSIB Resolution Reform

At today’s FDIC Systemic Resolution Advisory Committee session, Acting Chairman Martin Gruenberg defended the release of proposed DSIB resolution standards as guidelines, not rules.  Director Chopra reiterated concerns he expressed at a recent FDIC board meeting (see Client Report DEPOSITINSURANCE115), pressing for a structural rewrite of both DSIB and GSIB resolution standards.  Acting Comptroller Hsu focused largely on supervisory build-out, noting the need for more creative, forward-looking assessments of resolution plans.  Mr. Hsu also wants regulatory statements to ensure that investors understand that TLAC is a buffer of capital-at-risk in the event of extreme stress.

Daily110922.pdf

24 10, 2022

DAILY102422

2022-10-24T16:48:00-04:00October 24th, 2022|2- Daily Briefing|

Deadline Set for D-SIB Resolution Comment

The Federal Register today included the Fed/FDIC D-SIB resolution ANPR, as announced last week (see Client Report DEPOSITINSURANCE115).  As analyzed in our in-depth report (see FSM Report RESOLVE48), the agencies seek comment on whether requiring D-SIBs to have TLAC standards akin to those mandated for G-SIBs would enhance resolvability, as well as seeking input on extending clearing holding company requirements to D-SIBs, disclosure standards in the event of a resolution, and explicit severability plans.

FHFA Advances Equitable Finance With New Fees, Credit Score Options

Building on its 2022 scorecards and January’s up-front fee price hikes, FHFA today announced it will eliminate upfront fees – aka, delivery fees or loan-level price adjustments (LLPAs) – for certain borrowers and affordable mortgage products.  The Agency will also implement targeted increases to the upfront fees for most cash-out refinance loans.  Upfront fees will be eliminated for: first time homebuyers at or below 100% of area median income (AMI) and below 120% AMI in high-cost areas; HomeReady and Home Possible loans, which are Fannie and Freddie’s flagship affordable housing products; HFA Advantage and HFA Preferred loans; and single-family loans supporting the Duty to Serve program.

Daily102422.pdf

21 10, 2022

Al102422

2022-10-24T11:05:45-04:00October 21st, 2022|3- This Week|

Resolved…What Was That Again?

As evidenced again last week at the FDIC meeting (see Client Report DEPOSITINSURANCE115), structural  change is under way in how larger regional banks are required to prepare for an orderly demise.  This comes not just from the new FRB/FDIC request for views on what will clearly now be new resolution standards for these companies (see FSM Report RESOLVE48), but also how large M&A transactions are reviewed even while these standards undergo the lengthy comment-and-approval process kicked off by a release that hasn’t yet even hit the Federal Register.  As we noted in our assessment of the approval of the USB/MUFG acquisition (see Client Report MERGER11), the FRB and OCC have altered the conditions they impose on super-regionals even if – as in this case – the Fed thinks the resulting company is already resolvable.  Our analyses assess the strategic implications of what could be structural rewrites not only of how large regionals are resolved, but also even of how they operate while still in the pink.

Al102422.pdf

30 09, 2022

DAILY093022

2022-10-03T13:40:26-04:00September 30th, 2022|2- Daily Briefing|

Brainard Acknowledges Risk But Sticks to Policy Guns

Responding to acute concerns that Fed policy will shatter global financial stability, Fed Vice Chair Brainard today emphasized her longstanding and once-isolated view that monetary policy must consider financial stability.

Global Standard-Setters Turn to Clearing Margin, Liquidity

The Basel Committee, IOSCO, and CPMI issued the first substantive response to the FSB’s decision to target margining practices following its review of the 2020 financial crisis and the need to address nonbank financial intermediation (see Client Report NBFI).

HFSC Republicans Denounce Beneficial Ownership Rule

HFSC Ranking Member McHenry (R-NC) and Rep. Luetkemeyer (R-MO) released a statement today sharply criticizing FinCEN’s beneficial ownership final rule as overly broad and complex.

Basel Concludes High Capital Compatible with Sustained Profitability

The Basel Committee today released its latest report on bank capitalization, finding that profitability remains robust despite capital ratios increasing to the highest level since the beginning of the exercise in 2012.

Bowman Comes Out Swinging on New, Costly Big-Bank Rules

Following a speech earlier this week largely siding with banks on merger policy, FRB Gov. Bowman today agreed with assertions from bank CEOs (see Client Report REFORM213) and others that the largest U.S. banks are now well capitalized as judged by ratios and effective stress testing.

FRB/FDIC Turn to Regional Resolvability

The Fed and FDIC today announced that they will shortly propose resolution guidance for most regional banks.

Daily093022.pdf

20 09, 2022

DAILY092022

2022-09-27T16:49:38-04:00September 20th, 2022|2- Daily Briefing|

FedFin Assessment: Tales of a New TLAC

With press reports strongly suggesting that U.S. banking agencies will impose TLAC requirements on at least some regional BHCs, we think it helpful to provide an update on the 2016 rule imposing this resolution buffer (see FSM Report TLAC6) to note the implications of reopening the regulation.

HFSC Dems Attack Lack of Diversity in Insurance

Ahead of an HFSC hearing on Thursday, Chairwoman Waters (D-CA) and Rep. Beatty (D-OH) released a report sharply critical of the lack of diversity in the largest US insurance companies.  Noting an array of problematic practices, the report also calls for action on legislation to require insurance companies to report their diversity data and policies to their respective regulators and to publicly disclose the gender and race makeup of their board directors and senior executives.

Senate Banking Fires Another Shot at Big Banks

Following yesterday’s “snapshots” of Truist, PNC, and USB ahead of the Thursday big-bank hearing, Senate Banking Democrats today continued their attack on large banks, releasing similar reports on Citi and Bank of America.  These snapshots again focus on consumer issues such as Zelle fraud and also highlight recent enforcement actions.

Daily092022.pdf

Go to Top