To help ease the strain on U.S. dollar funding markets and facilitate the supply of credit to households and businesses, the Federal Reserve today established new temporary U.S. dollar swap lines with nine central banks around the globe.
As part of its policy response to the market turmoil triggered by the coronavirus pandemic, the Federal Reserve overnight announced a new Money Market Mutual Fund Liquidity Facility, or MMLF.
Noting that U.S. banking firms “have built up substantial levels of capital and liquidity in excess of regulatory minimums and buffers,” the Fed also encouraged banks to use their capital and liquidity buffers to lend to coronavirus-affected borrowers.
ABA today welcomed the Federal Reserve and FDIC’s effort to revisit the 41-year-old CAMELS uniform rating system and urged the agencies to make CAMELS ratings reflective of today’s regulatory requirements, to communicate ratings expectations in advance and to make the “M” or management component more transparent.
In remarks in New York last night, Federal Reserve Vice Chairman for Supervision Randal Quarles suggested that making reserves and Treasury securities more interchangeable from a liquidity regulation and supervision perspective could help improve the efficiency of the financial system and prevent sudden liquidity crunches in the markets, such as those that occurred last September.
Since the financial crisis, large bank holding companies have seen notable declines in key risk factors, with several risk indicators near or below pre-crisis levels, according to researchers at the Federal Reserve Bank of New York.
The proposed update to Fannie Mae and Freddie Mac seller/servicer eligibility includes new requirements for the servicing of Ginnie Mae mortgages.
While they have increased slightly in recent years, four key measures of banking system vulnerability remain “significantly smaller” than the period prior to the financial crisis, according to economists at the Federal Reserve Bank of New York.
Federal Reserve bank liquidity rules may have contributed to this fall’s repo market volatility, which in turn caused the Fed to resume open market activities, Fed Vice Chairman for Supervision Randal Quarles told the House Financial Services Committee today.
The U.S. banking sector remains strong overall, with banks maintaining strong capital and liquidity levels while seeing healthy loan growth and profitability, according to the Federal Reserve’s supervision and regulation report released today.