Risk Quantum/Federal Reserve
Post-Brexit vote, large US banks have curbed UK exposures
US G-Sibs shed $171 billion of claims on UK private sector between Q1 2016 and Q1 2019
Following Fed changes, Morgan Stanley’s leverage bind to loosen
Bank chief cannot see capital requirements going up when stress capital buffer and new SLR come into effect
US Bancorp could trim liquidity buffer by $15bn
Relaxation of liquidity coverage ratio for mid-sized banks would reduce HQLA requirement
Large banks set for capital boost through Fed’s AOCI opt-out
Unrealised losses on certain assets will not longer filter in CET1 capital for non-systemic lenders
US bank minnows growing faster than giants
Banks $1 billion to $10 billion in size accumulated assets at faster rate than those over $10 billion in size in 2018
HSBC leads foreign banks in fed fund and repo borrowings
Large intermediate holding company money market borrowings equivalent to 15.9% of total assets
Buy-to-hold inventories empty at US banks
Mid-sized lenders have trimmed held-to-maturity portfolios the most
DTCC’s total liquidity pool shrank in Q2
Aggregate liquidity resources fall to $260 billion
Short-term interest rate ETD notionals leap $14trn in Q2
Open interest in exchange-traded options with maturities of a year or less rise 19%
Fed fund and repo borrowings top $1trn at big banks in Q2
JP Morgan had 16.8% of total outstanding borrowings of the largest banks at end-June
Earnings fuel capital build at systemic US banks
Aggregate CET1 capital hits $1.1 trillion in Q2 2019, of which 86% is retained earnings
US G-Sibs shun unsecured short-term funding
Trend towards borrowings secured by high-quality collateral accelerates
Wells Fargo, BNY Mellon, State Street build repo exposures in Q2
Wells Fargo increases gross repo assets by 12.4% in three months to end-June