Tag Archives: Federal Reserve

News Release: Federal Reserve Rendering Volcker Rule on Speculative Trading “Close to Useless”

In August regulators issued a rule that dramatically weakened the Volcker Rule limits on direct proprietary trading by banks. Today, they have proposed new changes that would greatly weaken restrictions on banks taking risks through ownership of external funds, including venture capital funds and securitization vehicles like collateralized debt obligations.

In The News: Wall Street Venture-Fund Curbs to Be Eased in Volcker Revamp (Bloomberg)

In revising the Volcker Rule’s proprietary trading ban last year, the regulators had already relaxed one component of the limits on investment in funds, clarifying the industry’s ability to do so on behalf of clients. Backing off some of the fund restrictions will “complete the process of neutering the rule,” Marcus Stanley, policy director at Americans for Financial Reform, said in a criticism of the regulators’ actions last year.

Letter to Regulators: AFR Ed Fund Opposes Elimination of Derivatives Risk Controls

We strongly oppose the proposal to remove requirements to post initial margin when engaging in inter-affiliate derivatives transactions with covered swaps entities. The Agencies instituted this requirement just four years ago, concluding that these margin postings were necessary to “protect the safety and soundness of the covered swap entity in the event of an affiliated counterparty default”. Since this issue affects the key depository affiliates of the largest U.S. banks – entities at the heart of the taxpayer-supported safety net for systemically critical banks – the 2015 Final Rule also concluded that failing to require initial margin for inter-affiliate swaps would pose a threat to broader systemic stability.

Letter to Regulators: AFR Ed Fund and Demand Progress Ed Fund urge the Federal Reserve Board to enact strong consumer protections into their FedNow system

The development of a real-time, ubiquitous payment system is an especially complex, expensive undertaking. Because of the scale of the endeavor, and its potential to impact the American public as a whole, we firmly believe the Board is the appropriate entity to establish a universal 21st century payments system.

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Event: Former Fed Governor Tarullo Decries “Low-Intensity Deregulation”

“[A] good bit of that progress … could be endangered by a kind of low-intensity deregulation, consisting of an accumulation of non-headline-grabbing changes and an opaque relaxation of supervisory rigor. There are things to be concerned about in many of the individual proposals on such matters as the leverage ratio, resolution planning, and foreign banking organizations. It’s the cumulative effect, though, that is truly worrisome.”

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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.