Source: https://www.linkedin.com/feed/update/urn%3Ali%3Ashare%3A7041757654989377536
#SiliconValleyBank #SVB #Failure From #RiskManagement #Malpractice #HIDING #Unrealized #Losses: Get Rid of #SIFI #BailOut-#BackStop: #Enforce #RiskManagement: https://lnkd.in/gj25RfaF : https://lnkd.in/dSEUTFGc
First Things First: #MTM #MarkToMarket #Securities To Show HIDDEN #Unrealized #Losses on #BalanceSheet: https://lnkd.in/g2HHH9Az
#Fed-other bank #regulators imposed many new #rules on banks in response to last #FinancialCrisis. Lawmakers in 2018 #rolled #back some #restrictions by raising a threshold so that the #standards applied to firms with more than $250 billion in #assets. The changes under consideration, allowed under that 2018 law, could have effect of reversing that shift to correct the mistake made by the Congress.
The #Fed was already reviewing a number of its #regulations, led by #MichaelBarr, Fed pointman on #banking #supervision. But the past weekend’s #banking #crisis caused officials to rethink parts of their review to refocus their efforts on #smaller #institutions.
#Enforce #RiskManagement #RM #Standards Instead of Encouraging
#SiFi #Systemically #Important #Financial #Institutions To #Fail:
***** What Exactly is #SIFI? To Be Bailed Out By #Taxpayers! *****
***** Get Rid of #SIFI #BackStop #BailOut To #Enforce #RM ****
***** Rules Useless, Compliance Matters, Enforcement Needed ****
“The rules were not meant to only apply to the largest handful of systemically important firms…It is the very antithesis of macro-prudential supervision to focus only on the largest handful of financial firms and to ignore risks elsewhere in the system.”:
#Congress #FastAndLoose in #ReWrite of #DoddFrank #Act:
Dear Congress: Reg relief bill is a #giveaway for large banks: https://lnkd.in/gxhUR9Kq
University of Michigan Dean Michael S. Barr writes Congress in American Banker op-ed to discourage re-write of Dodd-Frank Act
https://lnkd.in/gQPtAAyi
*****
The Fed is expected to propose changes that could require more banks to show #unrealized #gains and #losses on some #securities in their #regulatory #capital. The move would affect their #regulatory #capital #ratios, a key measure of a bank’s strength.
While banks regularly #borrow #short-#term to #lend for #longer #periods, #SVB [DID OPPOSITE] concentrated its #balancesheet in long-dated assets. That left it sitting on #HIDDEN #unrealized #losses, making it more susceptible to customers pulling funds.
An October plan floated by the Fed and FDIC would have required firms with more than $250 billion to raise long-term debt that can help absorb losses in case of their own insolvency. Regulators now are considering proposing the measure to apply to banks below that threshold.
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