Tag Archives: Systemic Risk

eagle statue outside a federal reserve bank

Statement: AFR on the Fed’s “Broad Market Index” for the Secondary Market Corporate Credit Facility

The Federal Reserve Bank of New York announced the initial composition of the index they will be using to purchase corporate bonds through its Secondary Market Corporate Credit Facility (SMCCF). The corporations included in their June 5 “Broad Market Index” raise serious concerns about public benefit, solvency, and further incentivizing companies to take on additional debt unnecessarily.

In The News: How the COVID-19 Bailout Gave Wall Street a No-Lose Casino (Rolling Stone)

In place of a heartless free market of panicked investors who might want to cut their losses and sell, the plan is to simulate real buying and selling of financial products like mortgages and bonds with directed deployments of the Fed’s endless trillions. And they will be endless … Marcus Stanley of Americans for Financial Reform said, “The Fed’s perspective on this is, they want to create normalcy.” But what does “normal” mean in an economy that may be changed forever?

Event: Convening on Fund Regulation

AFR held a day-long convening of experts to discuss emerging issues in the SEC regulation of registered investment companies (mutual funds and Exchange Traded Funds that are registered under the 1940 Act).

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Letters to Regulators: Americans for Financial Reform Education Fund letter opposing the FDIC relaxing the process of resolution planning for Insured Depository Institutions

Americans for Financial Reform Education Fund raised concerns over weakening resolution planning requirements intended to prepare large bank holding companies for an orderly resolution in conventional bankruptcy without risk to financial stability and without any reliance on extraordinary public support of the failed bank or its counterparties.

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Letters to Regulators: Americans for Financial Reform Education Fund letter opposing banking regulators weakening big banks’ resolution planning requirements

Americans for Financial Reform Education Fund sent a letter to banking regulators opposing a proposal that would make the resolution planning process substantially less stringent than it currently is, and raising concerns over the safety and soundness of individual banks and the effect on U.S. financial stability.

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News Release: Fed Proposal Chips Away At Post-Crisis Reforms

Today’s proposals to restructure capital and liquidity requirements for large banks represent the latest chapter in the gradual chipping away of post-crisis financial reforms. The proposals go well beyond anything required by Congress, and significantly weaken requirements for large banks to hold cash and easily salable liquid assets to satisfy payment requirements in times of economic stress.

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News Release: Regulators were wrong to remove Prudential Financial from list of systemically important financial companies

The Financial Stability Oversight Council (FSOC) announced that it has reversed its designation of Prudential Financial, Inc. as a systemically important financial institution (SIFI). The Council, under the leadership of Secretary Mnuchin, has now freed from Federal Reserve consolidated oversight the last of the four previously designated nonbank SIFIs.