A summary of noteworthy news and publications from financial regulatory agencies on Monday, May 4, 2015:
The IMF published a host of working papers
The New York Fed published two papers on negative interest rates and peer analysis benchmarking
The FDIC issued a list of banks examined for CRA compliance, only 1 didn't pass
The Federal Reserve published the April 2015 Senior Loan Officer Opinion Survey on Bank Lending Practices
The Federal Reserve Bank of New York released interactive maps highlighting credit conditions in communities across the United States. Referred to as the "Community Credit interactive" the tool provides users with a way to measure credit inclusion at the county level. Data runs from 2005 to 2014 and shows that, for the most part, Americans are paying bills on time. North Dakota (87 percent) ranks the highest, whereas Mississippi (71 percent) ranks the lowest. New Hampshire ranked the highest for inclusion rates (# of people with a credit file) and Alaska ranked the lowest. The county with the lowest percentage of on-time payers, at 48 percent was in New Mexico, the county with the highest at 93% was in Sioux County, Iowa.The Bureau of Economic Analysis (BEA) launched a tool that gives users statistics on trade and investment between the United States and another country. Data within the tool includes:
You can also view a country specific factsheet with canned graphs and charts for each country.
- Total exports, imports and trade balance between the United States and the country you select.
- The top five categories of goods and services the United States buys from and sells to that country.
- Country level data on U.S. direct investment abroad and foreign direct investment in the United States and on the activities of multinational enterprises such as employment and sales.
SEC Commissioner Kara M. Stein dissented against the decision to grant Deutsche Bank a waiver allowing the bank to maintain "well-known seasoned issuer" status. This status would have been automatically revoked if it weren't for the waiver.
Deutsche Bank’s illegal conduct involved nearly a decade of lying, cheating, and stealing. This criminal conduct was pervasive and widespread, involving dozens of employees from Deutsche Bank offices including New York, Frankfurt, Tokyo, and London. Deutsche Bank’s traders engaged in a brazen scheme to defraud Deutsche Bank’s counterparties and the worldwide financial marketplace by secretly manipulating LIBOR. The conduct is appalling. It was a complete criminal fraud upon the worldwide marketplace.Stein, the Fed's most ardent advocate on the benefits of financial regulation, believes the "WKSI status is available 'for the most widely followed issuers representing the most significant amount of capital raised and traded in the United States.'" This status gives certain firms advantages over other firms in the way of capital access and Stein doesn't think Deutsche Bank should be allowed to maintain this status -- I'm inclined to agree.
The IMF was busy over the weekend and published a host of working papers including:
- The Potential Macroeconomic Impact of the Unconventional Oil and Gas Boom in the United States - "The results suggest that the impact on the level of U.S. real GDP over roughly the next decade could be significant, but modest, ranging between 1 and 1½ percent."
- Determinants of Firm Profitability in Colombia’s Manufacturing Sector: Exchange Rate or Structural? - "paper examines the effects of the real exchange rate, external and domestic demand, and structural changes on firms’ profitability in Colombia’s manufacturing sector between 2000 and 2012."
- What Drives Interest Rate Spreads in Pacific Island Countries? An Empirical Investigation - "This paper examines the determinants of lending rates and interest rate spreads in a panel of six PICs, extending the literature that was largely descriptive in nature or focused on a single country."
- The Macroeconomic Effects of Public Investment : Evidence from Advanced Economies - "The paper finds that increased public investment raises output, both in the short term and in the long term, crowds in private investment, and reduces unemployment."
- How Important are Debt and Growth Expectations for Interest Rates? - "The results show, consistent with the literature, that a one-percent rise in the long-run projected debt-to-GDP ratio causes an increase in bond yields of a relatively modest 1-to-6 basis points."
- The Role of Productivity, Transportation Costs, and Barriers to Intersectoral Mobility in Structural Transformation - "In this paper, we construct a multi-sector model in which there are barriers to the movement of labor from low-productivity traditional agriculture to modern sectors."
- Too Much of a Good Thing? Prudent Management of Inflows under Economic Citizenship Programs - "This paper discusses recent developments and implications of such programs for fiscal discipline and the real economy, including risks to macroeconomic and financial stability, with a focus on small state economies."
- Fair Weather or Foul? The Macroeconomic Effects of El Niño - "The results show that there are considerable heterogeneities in the responses of different countries to El Niño shocks. While Australia, Chile, Indonesia, India, Japan, New Zealand and South Africa face a short-lived fall in economic activity in response to an El Niño shock, for other countries (including the United States and European region), an El Niño occurrence has a growth-enhancing effect."
- What has Capital Liberalization Meant for Economic and Financial Statistics - "The paper considers that there has been nothing short of a revolution in the field of economic and financial statistics over the past two decades led by a need for greater transparency; greater standardization; new data sets to support understanding of financial interconnections and financial sector risks; and the strengthening of the governance of the statistical function through greater independence of statistical agencies."
They also published another working paper entitled Asset Price Effects of Peer Benchmarking: Evidence from a Natural Experiment - "We estimate the effects of peer benchmarking by institutional investors on asset prices." "We find that these peer effects generate excess stock return volatility, with stocks exhibiting short-term abnormal returns followed by returns reversal in the subsequent quarter. Additionally, peer benchmarking produces an excess in comovement across stock returns beyond the correlation implied by fundamentals". Look for my analysis on SeekingAlpha about this paper shortly. Be sure to follow us there to read more ---> (http://seekingalpha.com/author/celan-bryant/articles)
The FDIC issued a list of banks examined for CRA compliance. Of the 80+ banks examined only The Morris Plan Company of Terre Haute, Inc located in Indiana received a poor rating.
|32907||The Morris Plan Company of Terre Haute, Inc.||P.O. BOX 869||TERRE HAUTE||IN||47808-0869||NI|
|13292||The Bank of Castile||90 MAIN STREET||BATAVIA||NY||14020-0000||O|
|9204||Central Bank||75 NORTH UNIVERSITY AVENUE||PROVO||UT||84601-0000||O|
The Federal Reserve published the April 2015 Senior Loan Officer Opinion Survey on Bank Lending Practices which is only published once a quarter. The report addresses "changes in the standards and terms on, and demand for, bank loans to businesses and households over the past three months." The report summarizes the responses from 76+ banks. Look for my analysis of this report on SeekingAlpha as well.
Wednesday, May 6 @ 9am: Scott Bauguess, Deputy Director and Deputy Chief Economist, Division of Economic and Risk Analysis, will participate in the NRS Investment Adviser and Broker-Dealer Compliance Conference. Location: The Westin, 321 N. Fort Lauderdale Beach Blvd., Fort Lauderdale, Fla. Contact: Elisabeth Law, email@example.com
Wednesday, May 6 @ 10:45 a.m. ET: SEC Commissioner Kara Stein will participate in a panel entitled, “Other People’s Money: Governance, Integrity and Ethics” at the Institute for New Economic Thinking’s “Finance and Society” Conference. Location: International Monetary Fund, 1900 Pennsylvania Ave. N.W., Washington, D.C. Contact: firstname.lastname@example.org
May 7 @ 8:30 a.m. ET: James Schnurr, Chief Accountant, will be a featured speaker at the Annual Financial Reporting Conference. Location: Zicklin School of Business, 55 Lexington Ave. Room 14-220, New York Contact: Matthew LePere, 646-312-3231, Matthew.LePere@baruch.cuny.edu
May 7 @ 10 a.m. ET: SEC Chair Mary Jo White will participate in a Q&A discussion with Julie Lutz, Director, Denver Regional Office, at the Rocky Mountain Securities Conference. Other SEC senior officials will also participate in the event. Location: Denver Marriott City Center, 1701 California Street, Denver Contact: Mary Dilworth, email@example.com
May 8 @ 8 a.m.: SEC Chair Mary Jo White will participate in a Q&A discussion with Investment Company Institute’s (ICI) President and CEO Paul Schott Stevens at their Annual Regulatory General Membership Meeting. Location: Marriott Wardman Park Hotel, 2660 Woodley Road, N.W., Washington, D.C. Contact: Olivia Caverly, 202-326-5945, firstname.lastname@example.org
In case you missed it...
- Monday, April 27, 2015 Recap: Credit Detail, More CFTC Charges, Puzzling Low T-Yields, and the Fed Testifies Before The Senate
- Tuesday, April 28,
2015 Recap: Ex-Evercore Banker & Girlfriend Charged, IMF on Islamic
Banking, Bank Profitability, and a $600K Payday For Whistleblower
- Wednesday, April 29,
2015 Recap: Fed Funds, Bernake's Response To Taylor's Rebuke, GDP,
China's Looming RE Battle & Pay Vs. Performance
April 30, 2015 Recap: Algorithmic Trading, Community Banks, Personal
Income Report, Another FX Scheme, Banking Applications and Compliance
- Friday, May 1, 2015 Recap: Financial Literacy, 18yrs For Investment Fraud, FCStone Sanctioned, Pan-African Banks, Piwowar's Dissent and Alaska's $51B Fund
Two Weeks Ago
- Monday, April 20, 2015 Recap: Treasury Auctions, FX Ponzi, BlackRock Fail, Dudley's Fed Speech, and the FFER
- Tuesday, April 21, 2015 Recap: More Regulation For Large Banks, Youth Savings, Piwowar's Speech, Flash Crash Culprit, the OFAC & FNRG Halted
- Wednesday, April 22, 2015 Recap: #EXIM2015, Obama's PPPs, Goldman Sachs In The "Dark", $1.5M Payday, Massad Speaks, and Yellen Stabilizes
- Thursday, April 23, 2015 Recap: GDP, Deutsche Bank, Community Banks, Repos, and the Treasury Gets New Blood
- Friday, April 24, 2015 Recap: New Federal Reserve Auditor, Inventories Up, CEI Same, Insider Trading, Fair Fund Delays & Alizadeh's Grand Jury Indictment