Friday, April 24, 2015

GDP, Deutsche Bank, Community Banks, Repos, and the Treasury Gets New Blood

A summary of government activity that impacts investors from Thursday, April 21, 2015:
The Bureau of Economic Analysis (BEA) released a breakout of GDP by industry. Overall, GDP increased 2.2 percent. Finance and insurance decreased 7.7 percent. The graph below provides a breakout by real GDP by sector.
Source: Bureau of Economic Analysis (BEA)
Seven years ago a Libor investigation began at the CFTC which spread to other financial regulatory agencies and culminated in a net settlement of $2.5 billion in penalties by Deutsche Bank. This is a continuation in a line of cases which started at Barclays and UBS -- together they show a culture of collusive behavior that is hard for most to get their heads around, but one New York Times article does a good job. Click the link above to read the full story.

Maryann F. Hunter, Deputy Director of the Division of Banking Supervision and Regulation with the Fed testified about the status of community bank regulations before the Subcommittee on Financial Institutions. She discussed the Federal Reserve's approach to regulating community banks, coordination among other bank agencies and the resulting changes that are happening in the regulatory framework.  

Doreen R. Eberley, Director of the Division of Risk Management Supervision at the Federal Deposit Insurance Corporation (FDIC) also gave her testimony on community banks. "As the primary federal regulator for the majority of community banks, the FDIC has a particular interest in understanding the challenges and opportunities they face," Eberley stated, largely in favor of the current framework.

The Office of Financial Research published a brief entitled Repo and Securities Lending: Improving Transparency with Better Data. The paper looks at the extent to which the 2008 financial crisis was caused by the lack of liquidity in the repo and money markets.

Brodi L. Fontenot, the nominee for Chief Financial Officer of the Treasury testified before the Senate Finance Committee. For the past five years Fontenot has served at the Department of Transportation as Deputy Assistant Secretary for Management and Budget in the office of the Chief Financial Officer. For the past three months he's worked at the Department of the Treasury as the Assistant Secretary for Management. 

Anne Elizabeth Wall, the nominee for Deputy Under Secretary of the Treasury also testified before the Senate Finance Committee. She joined the White House Office of Legislative Affairs as Special Assistant to the President for Legislative Affairs and then served as Deputy Assistant to the President for Legislative Affairs and Senate Liaison.


Thursday, April 30, 2015

2 p.m. ET (1 p.m. CT): SEC Chair Mary Jo White will give keynote remarks at the 35th Annual Ray Garrett Corporate and Securities Law Institute. Keith Higgins, Director, Division of Corporation Finance, will participate in a “Conversation with the Director.” Shelley Parratt, Deputy Director, Division of Corporation Finance, will participate in a panel focusing on disclosure and capital raising.

Event Location: Northwestern University School of Law, Thorne Auditorium, 375 East Chicago Ave., Chicago

Contact: Peter Skrabacz, 312-503-4213,

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