SIFIs

WASHINGTON — Republican lawmakers continued their assault Wednesday on a portion of the Dodd-Frank Act that grants the Federal Deposit Insurance Corp. the ability to seize and unwind a failing banking company, arguing that reforming the bankruptcy code is a better way to tackle "too big to fail."

Regulators have given the merger between CIT Group and OneWest Bank the green light — so long as CIT comes up with a revised Community Reinvestment Act plan. This condition is good news for the low-income communities impacted by the merger and sets a strong precedent for regulators' review of future bank deals.

WASHINGTON — Three nonbank giants designated for tougher federal supervision received added guidance Tuesday on what regulators expect to see in the companies' mandated resolution plans.

The debate about how big a bank needs to be before it poses a threat to the economy heated up again Thursday as lawmakers battled over the $50 billion threshold imposed by the Dodd-Frank Act.

Regulators and lawmakers are wrong to focus on bank size as a measure of risk. A far better indicator of bank stability is the riskiness of a bank's assets, as well as which of the bank's sources of funding bear that risk.

Republican lawmakers continued their legislative attempts Wednesday to require more transparency from the Federal Reserve Board and force the central bank to more accountable to lawmakers.

Despite recent changes to the Financial Stability Oversight Council's systemically risky designation process, Senate Banking Committee members feared that once a designation is made, there is no way for a company to remove that label.

A growing number of regulators have indicated their support for raising the asset thresholds at which banks face new regulatory requirements. That's welcome news — but time is of the essence in implementing any changes.

Key proponents and critics of the 2010 financial reform law commemorated its anniversary by keeping the debate over its legacy front and center.

In one fell swoop, the Federal Reserve Board completed two of the most significant rules on its docket, completing a surcharge rule for the largest and most systemically risky U.S. banks and outlining the first capital rules for a nonbank systemically important financial institution.

In a surprise move, the Federal Reserve Board proposed significant changes to its stress testing regime, including dropping its Tier 1 Common Capital requirements and delay leverage and risk-based capital ratio requirements for banks with "advanced approaches" in risk-based modeling.

A recap of the informed opinions (and the discussions they generated) on BankThink this week, including ways to make megabanks pay for their “too big to fail” subsidy and how banks can help put an end to human trafficking.

Citigroup's second-quarter profit got a modest boost from Citi Holdings, a unit set up six years ago as a dumping ground for toxic assets. After losing billions for years, Citi Holdings has now become a minor profit source for its parent.

Final guidelines for dealing with failing institutions from the international Basel Committee include direct capital injections — something the Dodd-Frank Act tried to end in the U.S. — as a last-ditch option.

Wall Street's favored bank-resolution strategy would virtually guarantee future bailouts while imposing the costs on taxpayers and ordinary investors. At the very least, the damage can be mitigated with three key reforms.

Federal Reserve Board Chair Janet Yellen sounded at least open to the idea that new regulations have contributed to potential liquidity problems, but said more study is needed.

Nobody wants a big-bank bailout, but compared to the risk of contagion, it's the lesser of two evils.

Those looking for easy answers from a government report about what caused recent volatility in the Treasury markets — including whether regulation is to blame — were likely disappointed.

Democratic presidential fron-trunner called for tougher reforms on Wall Street and harsher penalties for financial misconduct, but avoided more aggressive positions embraced by other candidates to break up the biggest banks.

While the Federal Reserve and other regulators extended the deadline for some parts of the Volcker rule, July 21 is the deadline for all banks to have a compliance regime in place.