Posts filed under “Think Tank”

Stress Test Results

http://www.federalreserve.gov/newsevents/press/bcreg/20090507a.htm

For release at 5:00 p.m. EDT
The results of a comprehensive, forward-looking assessment of the financial conditions of the nation’s 19 largest bank holding companies (BHCs) by the federal bank supervisory agencies were released on Thursday.

The exercise–conducted by the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation–was conducted so that supervisors could determine the capital buffers sufficient for the 19 BHCs to withstand losses and sustain lending–even if the economic downturn is more severe than is currently anticipated. In a detailed summary of the results of the Supervisory Capital Assessment Program (SCAP), the supervisors identified the potential losses, resources available to absorb losses, and resulting capital buffer needed for the 19 participating BHCs.

The SCAP is a complement to the Treasury’s Capital Assistance Program (CAP), which makes capital available to financial institutions as a bridge to private capital in the future. Together, these programs play a critical role in ensuring that the U.S. banking sector will be in a position of strength.

Statement by Chairman Ben S. Bernanke

Overview of Results (333 KB PDF)

Related information
Joint statement by Federal Reserve, Treasury, FDIC, and OCC on Treasury Capital Assistance Program and Supervisory Capital Assessment Program (May 6, 2009)

The Supervisory Capital Assessment Program: Design Summary (287 KB PDF)

Agencies to Begin Forward-Looking Economic Assessments (February 25, 2009)

Category: Bailouts, Credit, Federal Reserve, Think Tank

Quick Bullets

David R. Kotok co-founded Cumberland Advisors in 1973 and has been its Chief Investment Officer since inception. He holds a B.S. in Economics from The Wharton School of the University of Pennsylvania, an M.S. in Organizational Dynamics from The School of Arts and Sciences at the University of Pennsylvania, and a Masters in Philosophy from…Read More

Category: Markets, Think Tank

Lessons of the Financial Crisis for Banking Supervision

Chairman Ben S. Bernanke

At the Federal Reserve Bank of Chicago Conference on Bank Structure and Competition, Chicago, Illinois (via satellite)

May 7, 2009

Lessons of the Financial Crisis for Banking Supervision

After more than a year and a half of financial crisis, both bankers and policymakers must contend with two questions: What have we learned from this extraordinary episode? And how can we apply those lessons to strengthen our banking system and to avoid or mitigate future crises? Getting the answers to these questions right is critical for our future financial and economic health.1

The Federal Reserve has been intensively evaluating the lessons of the crisis, both with respect to the companies we supervise and to our own policies and procedures, and we are actively incorporating what we have learned into daily supervisory practice. Increasing the effectiveness of supervision must be a top priority for our institution. In my remarks today I will outline some steps that the Federal Reserve has already taken in the wake of the crisis to strengthen capital, liquidity, and risk management in the banking sector, as well as to improve the supervisory process itself. I will also touch on what we have learned about the importance of effective consolidated supervision and the potential benefits of a more macroprudential orientation to financial oversight.

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Category: Credit, Federal Reserve, Regulation, Think Tank

Bailoutout Recipient’s Lobbying Activity

Jane Hamsher is the founder of Firedoglake. Her work has appeared on the Huffington Post, Alternet and The American Prospect. She has appeared on CNN, MSNBC and PBS and is the author of the best selling book Killer Instinct. She has produced such films Natural Born Killers and Permanent Midnight and currently lives in Washington,…Read More

Category: Bailouts, Politics, Think Tank

Looking Askance at the Stress Test Rally

> The ADP Employment Change at -491k was significantly better than the expected -645k. This pushed stocks higher. However, as we keep noting, ADP has not tracked the NFP number due to BLS’s whacky seasonal adjustments and its dubious Net Business Birth/Death Model. The Street ‘officially’ expects the Employment Report on Friday to show NFP…Read More

Category: Markets, Think Tank

Claims data

Initial Jobless Claims totaled 601k, 34k less than expected and down from a revised 635k last week (up by 4k) and down for a 2nd week to the lowest since Jan 23rd. Continuing Claims though continues its move higher by 56k, 1k more than expected and the differential between the two figures is evident that…Read More

Category: MacroNotes

‘Stress Test the movie,’ hopefully they’ll be no sequel

As we get the official results of the ‘stress test’ today, a key assumption used by the Treasury was a stressed scenario of a 10.3% unemployment rate. With Friday’s report on payrolls, we may be at an unemployment rate of almost 9% and at the current pace, we’ll be at 10% by year end. Thus,…Read More

Category: MacroNotes

Recession Over & All Banks Pass the Stress Test?

Good Evening: Just when the U.S. stock market seemed ready for a round of profit-taking ahead of Friday’s nonfarm payrolls figures, investors decided to throw caution to the wind. Apparently deciding that the recession and the stress over the banking system would soon be in the rearview mirror, market participants once again stampeded into large…Read More

Category: Markets, Think Tank

Congress Quietly Moves Pecora Commission

Tucked into an anti-fraud bill moving through the House and Senate is a Pecora-style commission with subpoena power.  The negotiations are based on the Senate version of the bill, and the Senate version has the commission in there.  I excerpted the section on the commission, you can see the full bill here: http://www.opencongress.org/bill/111-s386/show

Comments, thoughts, etc are always welcome, though in this case there’s probably not much I can do from my position.

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Category: Legal, Politics, Think Tank

Picture du Jour: Stock markets – it’s all about confidence

Picture du Jour: Stock markets – it’s all about confidence A key requirement for the recent stock market gains to be more enduring and for the bear’s corpse to be put to rest, is the restoration of investor confidence. A few comments regarding this issue are highlighted in this post. As shown in Sunday’s “Words…Read More

Category: Psychology, Technical Analysis, Think Tank