Press Release: Financial Trade Associations Comment on Banking Agencies’ Newly Issued Report on Banking Activities and Investments
In response to the Federal Reserve, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency’s report on banking activities and investments, Financial Services Forum, The Clearing House, American Bankers Association, SIFMA, and Financial Services Roundtable released a joint statement opposing the recommendations.
“Today’s CCAR results, together with the findings of the recent DFAST exercise, reflect the significant progress achieved since the financial crisis to improve the strength and resilience of the U.S. banking system. Since 2009, capital levels have doubled, liquidity has tripled, bank concentration has been significantly reduced, and regulators have successfully operationalized important new tools to address instability. As a result, the U.S. banking system has never been stronger and is now able to withstand the shock of even the highly unlikely severely adverse scenario imposed by CCAR."
Forum, Other Organizations Supporting EU-U.S. Financial Services Marketplace Form New International Coalition for Transatlantic Cooperation in Financial Regulation
An international group of fourteen trade associations and business groups recently announced the formation of a Transatlantic Financial Regulatory Coherence (TFRC) Coalition. The Coalition, which represents a large part of the transatlantic financial services community, has been brought together by a strong and shared belief on both sides of the Atlantic that improving regulatory cooperation between the U.S. and EU must be a priority. It believes that a comprehensive Transatlantic Trade and Investment Partnership (TTIP) that includes both market-opening measures and a framework for regulatory coherence in financial services is the best way of achieving this.
Forum Statement on Federal Reserve, FDIC Feedback on Resolution Plans for Large Financial Institutions
“Over the past six years enormous progress has been made to improve the safety, stability, and resilience of the U.S. financial system. Capital has doubled, liquidity has tripled, and annual stress tests show that large financial institutions can withstand a crisis far worse than 2008. Since the last living wills determinations, large financial institutions have worked strenuously to implement structural changes, streamline business models and lower risk in line with feedback received from the Federal Reserve and FDIC. By design, the living will process is iterative and will be ongoing, and the industry remains committed to continuing to work with regulators to ensure effective resolution and recovery planning."
“Since he left government to enter politics, it seems Mr. Kashkari hasn’t kept up to date with the many ways in which US-based global financial companies have become simpler, stronger, and more streamlined to serve their customers and clients and drive the real economy. Since none of those financial institutions are within the jurisdiction of the Minneapolis Federal Reserve Bank, it isn't clear why this is his area of interest now, but hopefully some of the progress that has been made will be discussed today in Minneapolis.”
Financial Industry Associations: Total Loss Absorbency Requirement to Help Ensure G-SIBs Can Be Resolved
Today, The Clearing House, the Securities Industry and Financial Markets Association, the American Bankers Association, the Financial Services Roundtable, and the Financial Services Forum submitted comments to the Federal Reserve in response to its proposal to impose total loss absorbing capacity, long-term debt and related “clean holding company” requirements on global systemically important banking groups (G-SIBs). The associations express the industry’s strong support for a TLAC requirement for G-SIBs, which is a crucial aspect of ending “Too Big to Fail” by helping ensure that these institutions can be resolved in an orderly way at the expense of creditors and shareholders (and not taxpayers).