SIFIs

WASHINGTON — The Federal Reserve Board and the Federal Deposit Insurance Corp. should rethink the review process for big banks' resolution plans, the Government Accountability Office said in a report released Tuesday.

Several years after regulators began developing the "net stable funding ratio," there is good reason to ask if its utility has been eclipsed by other liquidity-related rules.

In a panel featuring the four living chairs of the Federal Reserve Board, Janet Yellen said that she does not share Minneapolis Fed President Neel Kashkari's view that the biggest banks need to be broken up – but respects his opinion and the role of regional banks in the Fed system.

In a ruling that was unsealed Thursday, D.C. District Court Judge Rosemary Collyer upbraided the Financial Stability Oversight Council for disregarding its own rules in its decision to designate the insurer MetLife as a systemically risky nonbank.

The U.S. government panel that decided MetLife was too big to fail erred by not evaluating the insurer's vulnerability to financial distress, according to the federal judge who rescinded that designation last week.

The international standard-setting body highlighted the benefits of a Federal Reserve-style supplementary leverage ratio for global systemically important banks, but stopped short of a full-throated endorsement and committed only to take public comment on the issue.

The United Kingdom's potential departure from the European Union has implications not just for British banks but for large interconnected financial institutions based here as well.

In a forum at the Federal Reserve Bank of Minneapolis aimed at examining progress made in ending the era of Too Big to Fail banks, academics engaged widely differing views on the nature of bank risk and how far regulators have come in addressing them since the crisis.

Rather than look at the hard problem of restructuring the banking system, critics of the largest institutions should focus on the more immediate issues pertaining to extremely high capital requirements, which may hamper economic activity.

The Commodity Futures Trading Commission's proposal to obtain trader source code sets a dangerous precedent of regulators impinging on firms' constitutional protection from search and seizure.