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On Topic Archive: 2013

A lot has happened since my July 7 “draft” Post. Here is a summary.

July 16, 2013

  1. The Fed, OCC and FDIC have published for comment new Capital Ratio requirements for G-SIB’s at 5% for Bank Holding Companies and 6% for their banking subsidiaries.  The comment period is 60 days and a lot of action can be expected.
  2. Senators Elizabeth Warren D-MA, John McCain R-AZ, Angus King I-ME and Maria Cantwell D-WA have proposed legislation to reinstate the provisions of Glass Stegal Act which was repealed in 1999.  Similar legislation was introduced in the House in 2011 by Maurice Henchy D-NY22 with 5 Democratic co-sponsors.  That House Bill died in committee.  A similar fate is expected for the new Senate Bill.
  3. Brown-Vitter continues to struggle in the House and is also expected to expire of natural causes this year.
  4. The US Treasury Department has delayed for 6 months the implementation of FACTA. During this delay period, Treasury is reaching out to more foreign governments on bilateral agreements relating to Foreign Financial Institution reporting.


This site went live yesterday morning.  More timely reporting is promised in the future!

BIS Study on Consistency in Risk Weighting

July 7, 2013

The Basel Committee on Banking Supervision has issued a new report on consistency among banks (represented by 32 international banking groups) in assigning risk weights to assets.  The report concludes that there is reasonable consistency in relative risk assessment but significant deviations around the mean in the “Loss Given Default”, “Exposure at Default” and “Probability of Default” applied to the banks’ credit book portfolios.  This inconsistency leads to significant variation in the capital allocated to transactions by the banks.

Senate Banking Committee Opens Another Regulatory Hearing

July 7, 2013

The Senate Committee on Banking, Housing & Urban Affairs has schedule a hearing on July 11, 2013 on “Mitigating Systemic Risk Through Wall Street Reform.”  Representatives of the Treasury Department, Federal Reserve, FDIC and Comptroller of the Currency will give testimony.  Check back on the 12th for a summary.

Federal Reserve Releases Capital Rules

July 3, 2013

On July 2, 2013, the Federal Reserve released its Regulations for the implementation of Basel 3 in the US.  You can find all 972 pages here.  May you be amused over the 4th of July holiday weekend?  Summaries and commentary are available here, here and here.  Sorkin’s reporting team’s take is here.  Fed Governor Daniel Tarullo has already indicated that a 4% non-risk weighted leverage ratio is not adequate for US G-SIFIs; particularly those relying heavily on Money Market Fund short term deposits.  Here is a report of his earlier comments in June.