Risk Quantum/Federal Reserve
US branches of foreign banks shed $91 billion of reserves in 2018
Drop-off coincides with Fed’s ‘normalisation’ strategy
New SLR could cut $63bn off BNY Mellon’s leverage exposure
Proposed rule change would exempt central bank reserves from SLR denominator
Foreign banks stockpile HQLA in US branches
Median FBO has 48% of total HQLA in branches, but only 31% of total assets
Foreign banks eye HQLA savings in US
Liquid asset minimum requirements could drop by $14.9 billion at TD Bank alone
Fed reserves $749bn above banks’ ‘comfort levels’
Lenders could shed excess reserves by up to 61% without breaking a sweat
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