The Filing Cabinet

The Federal Reserve Board on Tuesday finalized changes to its stress testing program for the nation’s largest and most complex banks. The intent is to make the resiliency assessments “more open, transparent, and effective.”

The cutting-edge question asked by Federal Reserve Governor Lael Brainard at a recent conference: “What are we learning about artificial intelligence in financial services?” She answered with a look at the regulatory landscape.

Marking his three-month anniversary as the Board of Governors for the Federal Reserve’s vice chairman for supervision, Randal Quarles discussed plans for improving the effectiveness of post-crisis financial regulation.

Federal and state bank regulators have issued guidance for institutions in Texas suffering from the devastating effects of Hurricane Harvey. The advisory addresses temporary branches, loan modifications, and leniency regarding regulatory obligations and compliance deadlines.

The Board of Governors of the Federal Reserve has announced proposals to streamline post-financial crisis regulatory burdens imposed on directors at banks and reassess how ratings are issued.

Citing negligence of their risk management duties, Sen. Elizabeth Warren is demanding that the Federal Reserve intervene and fire embattled board members of Wells Fargo.

Federal Reserve Bank of Minneapolis President Neel Kashkari has unveiled a new plan he says would substantially reduce the rish of systemic threats from “too big to fail” financial institutions. More from Joe Mont.

The Federal Reserve has released the results of its annual Comprehensive Capital Analysis and Review, an assessment of whether bank holding companies with $50 billion or more in total consolidated assets have effective capital planning processes and adequate assets on-hand to absorb losses during stressful conditions. While many plans passed muster with no objections, not every bank received top marks. Joe Mont has more.

The Federal Reserve Board has clarified its procedures for emergency lending to banking institutions and placed new restrictions on future bailouts. A final rule, approved Monday and effective on Jan. 1, broadens the existing definition of insolvency and requires that emergency lending be approved by the Treasury Department. These and other lending limitations included in the rule were required by the Dodd-Frank Act. Details inside.

There was a warning last week from Fed Governor Daniel Tarullo to expect an increase to stress test minimum capital requirements and a proposed rule requiring banks to publicly disclose aspects of their liquidity profile. Also announced was an effort to improve the consistency of supervisory examinations and a one-year deadline extension for certain capital requirements. Details inside.

The Board of Governors of the Federal Reserve has issued a final rule that establishes risk-based capital surcharges for financial institutions designated as “global systemically important bank holding companies.” JPMorgan was handed the largest surcharge among the nation’s eight largest banks, 4.5 percent of its risk-weighted assets. More inside.

The Federal Reserve Board is giving financial insitutions more time to comply with the Volcker rule’s demand that they extricate themselves from investments in hedge funds and private equity funds and wind down speculative positions held on their own behalf, rather than for clients. Banks will until 2017 to unwind from certain holdings.

Dec. 9—The Federal Reserve is proposing a new risk-based capital surcharge for the most systemically important firms. The proposed rule would implement a new methodology for determining “global systemically important” banks and increase mandated capital conservation buffers by as much as 4 percent. The proposal establishes five broad categories correlated with systemic importance: size, interconnectedness, cross-jurisdictional activity, substitutability, and complexity. Chairman Janet Yellen described the move as a “milestone” in efforts to mitigate threats to financial stability. Details inside.

The Federal Reserve Board has approved a rule that places new limits on mergers and acquisitions in the banking industry, effectively slowing the growth of the largest institutions in yet another strike against “too big to fail” banks. The rule prohibits a financial company from combining with another company if the ratio of the resulting company's liabilities exceeds 10 percent of the consolidated liabilities of all financial companies. Among banks that are already nearing the forthcoming 10 percent concentration limit are Bank of America, JPMorgan, and Citigroup.