Risk

The collapse of Archegos Capital Management revealed vulnerabilities at the banks supervised by the Federal Reserve, the U.S. central bank said in a report released Wednesday.

The problems were revealed during recent examinations conducted by the Federal Reserve Bank of New York on the Chinese bank’s U.S. operations.

The Minneapolis company is planning a dramatic reduction in greenhouse gas emissions from its operations and the activities it finances, matching a commitment made by many of the nation’s largest financial institutions.

The establishment of a climate risk division at the New York State Department of Financial Services is the latest in a series of moves by state and federal banking agencies aimed at requiring regulated companies to reckon with the impacts of global warming.

Federal Reserve Gov. Lael Brainard said she expects scenario analysis exercises will accompany supervisory guidance to ensure that large banks are monitoring and managing climate-related risks.

Risk managers are generally not seen as innovators, but Houston's team is playing a critical role in supporting the development of groundbreaking new products aimed at improving customers’ financial health.

The dispute turns on the “discharge for value” defense, established by a 1991 New York court ruling that creditors can keep money sent to them in error if they didn’t realize the payment was a mistake.

The company will return to selling pieces of its credit exposure to private investors during the last three months of the year, but is still evaluating its strategy for 2022.

Citigroup said it will improve the structure of its commodities-trading business as part of its efforts to satisfy a pair of consent orders it received from regulators last year.

The European Central Bank will look at the trading operations of major lenders as part of climate stress tests next year, after judging that an assessment of loan books alone won’t give enough insight into the fallout they face from global warming.

The Federal Housing Finance Agency is looking to revise the framework intended for when Fannie Mae and Freddie Mac exit conservatorship in order to encourage the transfer of credit risk to private investors.

Banks that embraced their role as a conduit for Paycheck Protection Program loans were likelier to take more risk elsewhere, according to new research by three accounting professors. “Anytime you have that amount of money flowing through the bank, it’s going to affect behavior,” one of the authors said.

Banks in Louisiana and Mississippi are finding less physical branch damage than many expected. Executives say the pace of the recovery will hinge on how quickly power and water are restored, as well as the cost of supplies and labor.

The Fed, FDIC and OCC have issued guidance that says community banks should consider risk factors such as financial strength and business experience when evaluating potential fintech partners.

A consortium including Coinbase Global said all the reserves of the second-largest cryptocurrency stablecoin will shift into cash and short-term U.S. Treasurys, forgoing riskier investments.

Brian Gunn, who will join the Tokyo-based bank on next month, previously served as chief risk officer at Santander Holdings USA, Ally Financial and a GE Capital subsidiary.

Until recently, only the largest financial services firms were tallying the risks from climate change and opportunities in the green economy. But a new report from Regions Financial suggests the practice is gaining wider traction.

Fiscal restraint, the reversal of enormous amounts of monetary stimulus, smarter regulation and job retraining are among the public policy steps that could interrupt the long U.S. tradition of boom-and-bust cycles.

For the first time, the FDIC, Federal Reserve and OCC have combined efforts to advise banks on risk management procedures when working with nonbank partners.

The issues associated with environmental, social and governance policies cut across all the traditional concepts of risk facing bank executives and will endure for years.