Dodd-Frank Act
WHAT IS THIS? Properly known as the Dodd-Frank Wall Street Reform and Consumer Protection Act, this controversial US legislative package enacted a host of reforms agreed by the G20 nations in the aftermath of the financial crisis, including rules on the clearing, execution and reporting of standardised swaps. It also introduced the Volcker rule ban on proprietary trading by banks, and a new way of liquidating big institutions.
Fair valuations – Change for good?
The regulatory framework governing fair valuation practices in the US hasn’t undergone any substantial change for the best part of a decade. Now, thanks to a recently proposed rule by the US Securities and Exchange Commission (SEC), that is all about to…
CFTC’s swap stay plan for clearing houses sparks alarm
Lawyers warn proposal could invalidate close-out netting and expose members to higher risks
Dutch banks seek quantum edge for stress tests
ABN, ING and Rabobank working together; US quantum developer seeks patent for CCAR
Fed’s second round of stress tests to push banks’ limits
Worst-case scenario sees unemployment peak at 12.5%
The unintended impact of swap stays on financial stability
As swaps leverage shrinks, bankruptcy stay rules are not guaranteed to reduce systemic risk, says economist
CFTC block trade plan gets cold shoulder
Industry divided over swaps reform proposal, and advisory committee casts doubt on need for it
At top US banks, stress test capital hit driven by dividends
Shareholder giveaways make up bulk of post-stress capital losses at JP Morgan, Morgan Stanley, Bank of America
Foreign banks and Fed at odds on stress test impacts
HSBC North America predicted a loan-loss rate of 2.7%, well below the Fed’s 6% estimate
US banks lowball loan pain, overstate trading hit in Fed tests
In aggregate, systemic lenders underestimated loan-loss provisions by 18%
Discover, Capital One loans ravaged by Fed stress test
Credit card losses especially pronounced among regional US lenders
Fed’s Covid scenarios far harsher than latest stress tests
Under worst-case, 25% of banks would have post-stress CET1 ratios of less than 4.8%
Goldman faces high stress capital buffer after Fed tests
Bank projects 640bp peak-to-trough capital hit in DFAST
EU banks expect further margin reprieve for equity options
Exemptions for intra-group and equity options from non-cleared margin rules expire by January 2021
Capital One oil swaps waiver could haunt CFTC
Oil price collapse raises fresh questions about regulator’s justification for offering relief
Goldman hits the Collins floor
Changes to loss-given-default models caused advanced approaches credit RWAs to plummet
Mifid’s free data mirage vexes markets
Users struggle to access post-trade data despite European regulator’s push for transparency
Mid-cycle stress tests tougher on banks than DFAST
Median CET1 ratio drops 200bp more under mid-cycle than Fed-run tests
Wells Fargo could escape Collins floor
Op risk-weighted asset increases see advanced RWAs near standardised measures
BNY, Goldman, HSBC lag in mid-cycle stress tests
Periodic health checks show banks would hurdle regulatory minimums under severe market crisis
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
On CCP oversight, US and EU may be closer than they appear
Competing proposals on foreign CCP oversight have more in common than recent rhetoric implies
‘Living wills’ show some G-Sibs will be simpler to resolve
Four big banks reported fewer wind-up entities in 2019 resolution plans compared with 2017
EU banks seek last-minute margin reprieve for equity options
European dealers want exemption rolled over, to avoid handing US firms a regulatory advantage
Regulators plan to delay IM ‘big bang’ – market sources
Most see final phase of initial margin rules coming a year later, in September 2021