Risk Quantum/Federal Reserve
Foreign bank IHCs run more funding risk than US peers
More than 80% of foreign banks' short-term borrowings mature within 30 days
Fed proposal likely to relax rules for foreign banks
Few FBOs will face toughest level of regulation, according to Fed estimates
US G-Sibs owned over $50bn of other banks' capital in 2018
BofA Securities held the most of the group at $10.9 billion
Fed DFAST models project huge credit card losses
Losses of over 57% estimated for high-risk accounts
SA-CCR would dent US dealers’ leverage ratios – trade bodies
Goldman Sachs, Morgan Stanley and JP Morgan would likely see the largest leverage exposure spikes
Schwab, Northern Trust’s funding risk rivals G-Sibs'
Two non-G-Sibs have high short-term wholesale funding scores under Method 2
US banks slashed G-Sib scores in Q4 2018
Big cuts to derivatives and trading securities push systemic risk scores lower
Buoyant US economy, harsher CCAR for regionals
Strong correlation between US GDP variable and CET1 burn at mid-size domestic banks
Fed stress tests tougher in 2019
Severely adverse scenario projects US economy to shrink 9.4%
Fed shackles weigh on Wells Fargo
Total assets and risk-weighted assets down 3% on end-2017
FBOs get smaller, simpler and easier to resolve
Foreign bank IHCs have shrunk between 16% and 41% since Q3 2016
US banks pare reliance on unsecured funding
Average share of unsecured wholesale funding falls to 42% in a year
US life insurers switch to FHLB loans from Fabs
Borrowings from government-backed banks triple in 10 years
US banks bolster quality of short-term funding
Eight US G-Sibs increase share of total borrowings made up of well-collateralised repo
Basel and Fed G-Sib methods pose dual test to US banks
Different emphasis of rival frameworks could frustrate bank efforts to reduce systemic risk
BNPP, Credit Suisse, State Street incur VAR breaches
BNP Paribas capital multiplier increases on seventh breach in nine months
US G-Sibs cut $36bn of HQLA
Wells Fargo clears out $27 billion of HQLA in first nine months of 2017 alone
Fed finds more risk failings at FBOs than at US firms
FBOs attract hundreds more matters requiring attention than domestic banks
Four in 10 big banks fail Fed’s supervisory expectations
42.5% of largest banks branded less-than-satisfactory by RFI ratings
HQLA savings may hit $52bn for big three US regionals
US Bancorp could slash HQLAs by $24 billion if ratio is set at 70% for Category IIIs
Wells Fargo cuts $24 billion of RWAs
Optimisation efforts preserve capital ratio despite $14.5 billion of cash returns to shareholders
Swap books swell at big US banks despite lower risk profile
Total OTC derivatives notional among the eight banks is $222 trillion – a 2% increase on the quarter
Goldman adds bilateral derivatives as rivals cut back
Citi and JP Morgan reduce bilateral derivatives exposures by 10% and 2%, respectively
US big banks shrink systemic footprints in Q2
JP Morgan moves down into 3.5% capital surcharge bucket under Fed G-Sib methodology