Federal Reserve
Quantum computing: a problem for another generation?
Some banks have soured on quantum exploration. Others are playing a game of wait and see.
Western Alliance cuts repos, increases reliance on warehouse borrowing
Drawdown from expanded revolving line helps cut $2bn of costly overnight funding
Fed spares US Bancorp tighter liquidity straitjacket
Having committed to category II standards by end-2024, bank risked incurring LCR shortfall
Filling the gaps in Basel’s interest rate risk measures
Reverse stress-testing or VAR may work better than existing outlier tests, but are hard to manage
Adjusted for AOCI, ratios at five regional banks fall short
Impact of reinclusion on CET1 capital ratio would trip up Truist, Ally and others
Northern Trust rejigs funding as deposit costs rise
Net interest income drops 10.5%, cash at central banks falls by a quarter
Investors cheer Fed guidance on bank credit risk transfers
Institutions say clarification of regulations could jump-start US market
Ally says only a third of long-term debt qualifies for Fed bail-in rule
Bank holding company would face shortfall of $3.5 billion of debt under new standards
JP Morgan, BofA say Basel III plan could wipe out capital cushion
Banks forecast $82 billion cumulative hike in capital requirements from Fed proposals
Bankers warn money market rates could hit Fed’s QT plans
Shrinking Fed bond portfolio could squeeze bank liquidity, though money funds remain flush
US compliance teams face more intrusive Fed supervision
Regional banks look at enhanced data management to handle growing numbers of MRA notices
US takes scissors to repos. In Europe, it’s not cut and dried
Stateside banks fear disadvantage over haircut rules that EU sees as not ready to implement
BTFP becomes top source of Fed funding
Emergency lending programme accounts for over 54% of loans extended to US dealers by the central bank
Don’t count on repo to monetise liquidity books, say experts
QT could force banks to sell bonds during stress, underlining need for fair value accounting
US Basel endgame hits clearing with op risk capital charges
Dealers also fret about unlevel playing field compared with requirements in the EU
Some US banks defy yield uncertainty to grow AFS securities
Treasuries remain preferred buy, but regionals also pile into munis, MBS in Q2
The Fed’s stress test models are inaccurate. Something has to change
First step for US regulator to improve its bank loss forecasts would be to open up its models to public scrutiny, argue two banking industry advocates
Do all roads lead to multi-scenario Fed stress tests?
This year’s CCAR faced criticism for underweighting the risk of higher-for-longer inflation
How operational risk managers won a battle and lost a war
Applying op risk capital to US regional banks is positive, but the SMA may not be fit for purpose
US systemic risk scores hit records at JPM, Citi and 5 others
Riskiness of top dealers inflated by fair-value securities and higher reliance on short-term funding
US banks reshaped liquidity buffers in Q2
Truist, BofA and US Bancorp lead highly liquid assets pile-up
Industry divided on whether Europe should delay FRTB
Most bankers prefer to keep to earlier start date, even though it puts continent out of sync with US
Banks call for direct oversight of cloud providers by US regulators
Tri-opoly of cloud vendors “poses systemic risk” to financial sector, say risk managers
Goldman most threatened by Fed’s rejig of modelled capital charges
End of credit risk modelling and scaling up of SCB’s role could tip six US banks below minimum requirements