#Uninsured-Deposit – Federal Financial Analytics

15 05, 2023

DAILY051523

Eliza Allen2023-05-15T17:23:44-04:00May 15th, 2023|2- Daily Briefing|

Yellen Highlights Investor – Not Uninsured-Deposit – Runs, Buoys Sector Mergers

In an interview over the weekend, Treasury Secretary Yellen struck a decidedly different tone on bank mergers than voiced in the Administration’s policy prior to recent failures.

Gensler Outlines Top Financial Stability Concerns

In remarks today, SEC Chair Gensler outlined his financial-stability priorities.

Failed-Bank CEOs Defend Themselves, Contest Need For Receivership

Ahead of testimony tomorrow before Senate Banking, the CEOs of SVB and Signature have filed statements defending their actions and those of their colleagues.

FHFA Seeks Views On New Pricing Framework

Following last week’s announcement that it would postpone its controversial decision to retain an upfront fee related to a borrower’s debt-to-income level, the FHFA today released a Request for Input on the Enterprises’ single-family pricing framework as well as the process for setting their upfront guarantee fees.

Barr Stands His Supervisory, Regulatory Ground

Vice Chairman Barr’s testimony for Congressional hearings this week has just been released along with the Board’s 2023 supervision-and-regulation report.

Gruenberg Sticks To His Guns

FDIC Chairman Gruenberg’s Congressional testimony largely recounts prior statements about the condition of the banking system, recent bank failures, the new special-assessment proposal (see FSM Report DEPOSITINSURANCE120), and the agency’s deposit-insurance reform conclusion (see Client Report DEPOSITINSURANCE119).

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DAILY051223

Eliza Allen2023-05-12T17:05:25-04:00May 12th, 2023|2- Daily Briefing|

Bowman Blasts Barr

In another public sign of a growing FRB divide, Gov. Bowman early this morning followed Gov. Waller in taking strong issue with what would otherwise appear to be Board policy.

Fed Nominees Face Tough Confirmation Fight

In response to President Biden’s nomination of Philip Jefferson for Fed Vice Chair and Dr. Adriana Kugler and Lisa Cook to Fed Governor seats, Democrats have voiced strong support while Republicans are biding their time on nominations sure to prove controversial.

GOP Presses Broader FDIC, FRB Backstops

Picking up on the FDIC’s report (see Client Report DEPOSITINSURANCE119), Republicans have introduced legislation to provide limited coverage for transaction accounts and address other issues raised by recent events.

FRB-NY: SVB, Signature are 1930s Redux

Following on its post yesterday regarding changing bank-funding sources, the Federal Reserve Bank of New York today argues that the concentrated, uninsured deposit bases at SVB and SBNY are directly comparable to those of small rural banks in the 1930s.

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Daily051123

Arezou Rafikian2023-05-11T17:10:33-04:00May 11th, 2023|2- Daily Briefing|

Treasury Presses Fed Efforts to Contain Systemic Liquidity Risk

In remarks today, Treasury Under-Secretary Nellie Liang addressed systemic liquidity risks such as the 2020 dash-for-cash and recent bank failures. Treasury is cautiously optimistic about increasing regional-bank stability, but systemic liquidity risk is now structural.

FDIC Proposes Special, Costly Uninsured-Deposit Assessment

The FDIC today voted 3-2 to propose the special assessments presaged in Chairman Gruenberg’s Congressional testimony after SVB and SBNY’s failures (see Client Report REFORM218). Notably, the assessment does not also cover the $13 billion of cost estimated for the FRC rescue in conjunction with JPMorgan’s purchase; its rescue was not technically systemic and its cost will thus be covered as the FDIC reviews DIF ratios in coming meetings at which more broadly-shared, traditional premiums are likely also to increase.

GOP Endorses GAO Recommendations; Dems Point To Bank Management

At today’s HFSC Oversight Subcommittee hearing on the GAO’s report (see Client Report REFORM223), Subcommittee Chair Huizenga (R-MI) built the case that the Fed has historically been unable to properly supervise troubled banks and noted that the committee will investigate this along with the Systemic-Risk Exception used in recent failures.

Waller Disavows Fed Climate-Risk Action

Confirming the Fed’s omission of climate risk in its new financial-stability report (see Client Report SYSTEMIC96), Gov. Waller today said not only is climate risk not now a threat to financial stability, but it also does not pose a safety-and-soundness hazard to large banks.

FRB-NY Data Contradict Story …