OCC will be hosting Tennessee workshops on risk governance and credit risk.The Office of the Comptroller of the Currency (OCC) has announced that it will be hosting two workshops in Knoxville, Tenn., at the Hilton Knoxville, December 1-2, for directors of national community banks and federal savings associations. On December 1, the risk governance workshop will include lectures, discussion, and exercises to provide practical information for directors to effectively measure and manage risks. That workshop will also focus on the OCC’s approach to risk-based supervision and major risks in the financial industry. On December 2, the credit risk workshop will focus on credit risk within the loan portfolio, such as identifying trends and recognizing problems. That workshop will also cover the roles of the board and management, how to stay informed of changes in credit risk, and how to effect change. (10/23/2015) Tennessee workshops.
Dodd-Frank final swaps margins rule for banks is set. OCC Comptroller of the Currency Thomas J. Curry signed the final rule implementing margin requirements for non-cleared swap transactions in accord with the Dodd-Frank Wall Street Reform and Consumer Protection Act. OCC News Release 2015-142. This action is a joint final rule with the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Board, the Farm Credit Administration, and the Federal Housing Finance Agency and will apply to entities supervised by these agencies that register with the CFTC or SEC as a dealer or major participant in swaps. FDIC Press Release 81-2015. FDIC Chairman Martin J. Gruenberg said, “[e]stablishing margin requirements for non-cleared swaps is one of the most important reforms of the Dodd-Frank Act … These margining practices will promote financial stability by reducing systemic leverage in the swaps marketplace, and promote the safety and soundness of banks by discouraging the excessive growth of risky non-cleared swap positions.” FDIC Vice Chairman Thomas Hoenig said, “[w]hile the system overall would have been best served if banks posted as well as collected margin with their affiliates, much is accomplished with the requirement that the insured bank collect margin … I also recognize that other agencies with jurisdiction over non-bank affiliates could require these firms to collect margin as they finalize their rules on this matter.” (10/22/2015) See also DealBook Article.
FDIC board adopts proposal to increase DIF to statutorily required minimum.The FDIC’s board adopted a proposal to increase the Deposit Insurance Fund (DIF) to the statutorily required minimum level of 1.35 percent. The proposed rule would impose on banks with at least US$10 billion in total assets a surcharge of 4.5 cents per US$100 of their assessment base, after making certain adjustments. The FDIC expects the reserve ratio would likely reach 1.35 percent after around two years of payments of the proposed surcharges. The main purposes of the DIF are to protect the depositors of insured banks and to resolve failed banks. The DIF is funded largely through quarterly assessments on insured banks. Comptroller Curry also voted for the rule in his capacity as a director of the FDIC, and discussed the rule at the FDIC board meeting. OCC News Release 2015-143. Comments will be due 60 days after the rule is published in the Federal Register, which is expected shortly. (10/22/2015) FDIC Press Release 82-2015.
Comptroller of the Currency discusses increasing credit risk. Comptroller Curry, during a speech at the Exchequer Club, discussed increasing credit risk in the federal banking system. (10/21/2015) OCC speech.
US Treasury Department’s Deputy Assistant Secretary speaks about market structure at Risk USA Conference. Patrick Pinschmidt, Deputy Assistant Secretary of the US Department of the Treasury, spoke at a Risk USA Conference about market structure and its potential impacts on financial stability. After giving an brief overview of some of the secular and cyclical factors that are affecting the way our markets are functioning, he discussed how an array of changes since the crisis should help strengthen the resilience of the overall financial system and finally outlined the steps that Treasury and the Financial Stability Oversight Council (FSOC) are taking to address these matters. (10/21/2015) Treasury press release.
A Joint Statement is released on the Obama administration’s legislative proposal to address Puerto Rico’s urgent fiscal condition. US Treasury Secretary Jacob J. Lew, National Economic Council Director Jeff Zients, and Health and Human Services Secretary Sylvia Mathews Burwell released a statement in response to the Obama Administration’s unveiling of a detailed legislative outline to help Puerto Rico address its serious fiscal challenges.
(10/21/2015) Treasury press release.