Posts Tagged ‘Systemic risk’
Wells Fargo’s Foreign Exchange Operations Under Investigation for Over-Charging: Sound Familiar?
Much has been written on Wells Fargo’s continuing compliance woes, including by this blog last year on its unauthorized retail account opening scandal. The most recent compliance issue involves the bank’s foreign exchange (forex) desk, where it is accused of overcharging mid-market corporate clients. To be sure, overcharging for forex transactions has resulted in multibillion dollar fines…Read More
Trump Administration Continues Moderate Deregulatory Approach to Financial Markets with OTC Derivatives Proposals
Early this month the Trump Administration published its second of a four-part series of recommendations on changing the regulation of the finance industry, weighing in on how to improve regulation of the capital markets. Last Thursday it published its third report, on the asset management and insurance industries. I found the first report on banking regulation, published…Read More
Government Removes AIG’s “Systemically Important” Label: Reading the Tea Leaves
On September 29, the Financial Stability Oversight Council (FSOC) removed AIG’s designation as a systemically important financial institution (SIFI), relieving it of significant regulatory burdens, such as stress testing by the Fed and high capital requirements. FSOC is the chief regulator of systemic risk put in place by the Dodd-Frank Act. In its own words,…Read More
Financial CHOICE Act v. 2: Reducing Protections Against Systemic Risk
The nearly 600-page Republican bill to deregulate the financial markets moved forward in the House earlier this month, exiting the Financial Services Committee on May 4. Emboldened by the results of the 2016 election, the bill takes a considerably more aggressive approach than the original Financial Choice Act introduced in the last Congress. The next…Read More
Governor Tarullo’s Departure Will Create a Vacuum in Bank Regulation: How Big Will it Be?
Governor Daniel Tarullo’s resignation as governor of the Federal Reserve Board has important implications for future bank regulation and supervision. Its most likely medium-term effect is to reduce the priority the Fed has given to this component of its mandate. Governor Tarullo has played an outsized role during his eight years at the Fed. He…Read More
Implementing President Trump’s Dodd-Frank Directive May Lead to More Bailouts, Not Fewer, in the Next Crisis
Last Friday, February 3, nearly two weeks into his term, President Trump issued a directive to revamp financial market regulation, aimed squarely at the Dodd-Frank Act of 2010 without naming it but also encompassing the financial regulatory framework as a whole. The directive presents a vague framework in the form of several “core principles” that dovetail…Read More