Synthetic Risk Transfers Draw Interest from U.S. Banks

Grappling with high interest rates and related balance-sheet management issues, U.S. banks are eyeing deals that transfer their credit risk while keeping loans on their books along with the borrower...

May 10, 2024 | By John Hintze


A New Look at the Supplementary Leverage Ratio

On April 1, 2020, amid the pandemic slowdown and deteriorating liquidity conditions in the U.S. Treasury securities market, the Federal Reserve Board changed a then two-year-old capital requirement...

May 3, 2024 | By John Hintze


Real Estate Risks Are Global, but Impacts and Perceptions Vary

Slower economic growth, inflation and rising interest rates have taken a toll on real estate markets, and risk managers are on high alert. An October 2023 GARP Benchmarking Initiative (GBI) survey...

November 10, 2023 | By John Hintze


Amid Controversy over Capital Requirements, Top-Rated Structured Bonds Offer Respite

The Basel III Endgame is on in the U.S. The rewriting of risk-based capital standards for the biggest banks, formally proposed by regulators in July, is open for public comment through November, and...

September 29, 2023 | By John Hintze


Insurance Regulation Could Stymie Financing for Risky Companies

Concerns are growing among lenders that regulatory initiatives at the National Association of Insurance Commissioners (NAIC) could interfere with financings of riskier companies in the collateralized...

August 18, 2023 | By John Hintze


Catastrophe Risk Protection: Hurricane Ian Dislocates an Already Challenged Market

Catastrophe (cat) bond and insurance-linked securities (ILS) issuance appeared to be on its way to a record this year. That was before Hurricane Ian, a game changer that may hinder start-of-year...

December 2, 2022 | By John Hintze


Consumer Outlook: Continued Growth, or Putting on the Brakes?

While at the World Economic Forum meeting in Davos, Bank of America CEO Brian Moynihan expressed strong optimism about consumer spending going forward. Other observers view the consumer differently...

June 10, 2022 | By Charles Wendel


FASB Update Facilitates Hedging of Fixed-Income Risk

After a pandemic-induced delay, Financial Accounting Standards Board (FASB) guidance is allowing banks and others greater flexibility to hedge fixed-income assets and potentially benefiting those...

May 27, 2022 | By John Hintze


Stress Testing Uncertainty: What Does It Mean for FRMs?

Stress testing for banks seems like a straightforward exercise: assume a series of economic and financial conditions that would hamstring a bank’s performance, then project whether the bank has...

May 20, 2022 | By Tod Ginnis


Stress Testing and ECL: The Illusory Concept of Perfect Forecasting

Forecasting is a key tool used in stress tests and in projections for expected credit losses. The length of a perfect forecast horizon, however, has always been a source of contention in business....

March 11, 2022 | By Deniz Tudor


Fed Study: CECL Boosted Banks’ Reserves, but Impact on Lending Is Unclear

The Current Expected Credit Losses (CECL) accounting standard may have enabled a quicker reaction by banks to the pandemic economy, but whether it successfully bolsters lending during downturns is...

February 18, 2022 | By John Hintze


Biggest U.S. Banks' SLRs Continue Trending Down

Continuing to decline after a temporary rise last year, the largest banks' weighted average supplementary leverage ratios (SLRs) fell in the third quarter as changes from the Federal Reserve are...

October 29, 2021 | By John Hintze


With CECL in Force, Banks Remain Cautious on Loss Reserves

Banks ramped up loan-loss reserves at the onset of the pandemic because of the current expected credit losses (CECL) accounting standard that went into effect at the start of 2020. Although losses...

April 30, 2021 | By John Hintze


Positive Credit Market Outlook Carries Over

Credit market observers are expecting a bull run to continue well into 2021. Volatility is seen as likely to persist as the pandemic continues to rage, and it may deepen if political divisions...

January 8, 2021 | By John Hintze


Credit Risk Insights from India's Frontline: A Q&A with Shashi Ramachandra

Over the past year, amid the COVID-19 pandemic, India's banking system has been plagued by increases in non-performing loans and credit write-offs. Public-sector banks (PSBs) are struggling to raise...

December 28, 2020 | By Michael Sell


COVID-19, Basel III and the Current State of India's Banking System

In response to COVID-19, the Reserve Bank of India recently announced it would defer implementation of certain Basel III capital and funding provisions until April 2021. The intent is to give Indian...

November 25, 2020 | By Shashi Ramachandra


CECL's Downside Averted - for Now

Critics of CECL, the current expected credit losses accounting standard, warned that it would exacerbate an economic downturn. In fact, it enabled banks to build their loan-loss reserves more quickly...

October 23, 2020 | By John Hintze


Stress Testing: A Practical Guide

In February, the Federal Reserve Board is expected to release scenarios for its 2020 Comprehensive Capital Analysis and Review (CCAR) and Dodd-Frank Act stress test (DFAST) exercises. Moreover, the...

January 31, 2020 | By John Thackeray


Credit and Market Risks in FDIC Spotlight as Economic Expansion Ages

While regulatory attention is turning increasingly toward operational, cyber and other growing non-financial risk categories, the Federal Deposit Insurance Corp.'s 2019 Risk Review shines a spotlight...

August 9, 2019 | By Ted Knutson


Amid Mounting Criticism of CECL, a Partial Reprieve

Smaller banks may get three more years to comply with the new Current Expected Credit Loss (CECL) accounting standard, but other banks still will have to adopt it next year, even as more of them...

August 2, 2019 | By John Hintze


Who Owns CLOs? Fed Research Sheds Some Light

While signaling increased concern about leveraged lending as a corporate-credit - and potential financial-stability - risk, senior regulators have lacked a complete picture of the exposure....

July 26, 2019 | By Jeffrey Kutler


Congress Enters the Fray on CECL Delay

Following expressions of investor concern and reports of significant impacts on banks, members of Congress have introduced legislation to require reconsideration of the CECL (Current Expected Credit...

June 21, 2019 | By John Hintze


A Proactive, Integrated Approach to Capital Planning

More than a decade after the financial crisis, senior managers of financial institutions face two challenging tasks. They must deal with evolving regulations and new accounting standards, while...

April 26, 2019 | By Alla Gil


The Next Time Bomb: All Eyes on Debt

Amid a generally healthy run of economic indicators, the conversation at the American Enterprise Institute in Washington, D.C. was strikingly alarmist. The panelists at a February 12 discussion on...

February 25, 2019 | By Ted Knutson and Jeffrey Kutler

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