Chair of US Senate Banking Committee proposes financial reform bill. The Chair of the US Senate’s Banking Committee, Senator Richard Shelby, published the text of a proposed bill that would, among other things, limit the reach of the Dodd-Frank Act’s prohibition against proprietary trading, require a review of the regulations implementing the Dodd-Frank Act to determine their impact on financial institutions and revise the manner in which a bank holding company is determined to be systemically important. (5/12/2015) Shelby press release.

US Treasury studies CCP risk. The US Treasury Department’s Office of Financial Research published two papers concerning the potential risks of central clearing of over-the-counter derivative transactions. They are, “Systemic Risk: The Dynamics under Central Clearing” and “Hidden Illiquidity with Multiple Central Counterparties.” The papers suggest the need for attention to concentration risks in central clearing to strengthen central counterparties and to guard against threats to financial stability from disparities in clearing member size and their portfolio liquidation impacts. (5/7/2015) OFR press release.