Stress tests

The biggest legacy of the current regulatory relief effort may be the increasing focus on whether organizing banks in supervisory buckets by asset size makes sense. Yet the bill deals with just one of the two big asset thresholds in the law.

While regulatory relief legislation would raise the asset threshold for “systemically important” banks, Federal Reserve Chairman Jerome Powell said the central bank could still apply prudential scrutiny to banks below that new cutoff.

The Senate legislation would weaken scrutiny of large financial institutions, undercutting Dodd-Frank’s mission to provide tailored oversight across the system.

The Senate is poised to pass the most substantial bank regulatory relief since the crisis, but any disruption of the post-crisis regime is still eclipsed by how much the bill enshrines Dodd-Frank.

House Chief Deputy Whip Patrick McHenry, R-N.C., said House lawmakers are having discussions with the Senate about ways to go further on rolling back Dodd-Frank before the Senate is expected to hold a floor vote.

Banks may start paying special dividends now that capital levels have improved.

The California company has agreed to buy Grandpoint Capital, a business bank in Los Angeles, for $641 million.

Banks will have to show they can withstand “severely adverse” conditions; the office will be under the direct control of acting director Mick Mulvaney.

The Fed released its stress testing scenarios for banks this year, raising the bar on what constitutes severely adverse hypothetical market conditions.

Swelling capital levels, tax cuts and changing attitudes about post-crisis regulation could encourage bigger banks to issue the one-time payouts to reward shareholders and better manage their returns.

Over the past year, the focus of several banking policymakers has been how much the regulatory pendulum might swing back toward the industry’s liking. That theme will likely continue in 2018.

The McLean, Va., company and several other banks have disclosed the charges they expect to record in the fourth quarter due to lower values on their deferred tax assets.

The holding company structure makes sense for large banks with complex business models and small banks looking to bulk up through acquisitions. But for a large swath of banks in the middle, the benefits are harder to spot.

The 2010 law does very little to constrain regulatory power, explaining why Republicans pushed for reforms during the Obama presidency and why, under President Trump, Democrats are so vigorously opposing agency management changes.

In contrast to initiatives at other agencies, where Trump appointees are poised to go in a significantly different direction than their Obama-appointed predecessors, the stress test work appears aligned with the vision set out by former Fed Gov. Daniel Tarullo.

The JPMorgan Chase CEO supports easing regulations on mortgage lending but says other major provisions of Dodd-Frank should remain intact.

The Federal Reserve Board on Thursday proposed to give banks more insight into portfolio performance under its stress testing models in an effort to help banks better understand the Fed’s methodology.

During a sit-down interview, Bruce Van Saun, the CEO at Citizens Financial, explained how Washington policy changes could boost lending, why cyber threats keep him up nights and how fintechs and AI are changing the industry for the better.

Describing cybersecurity as the biggest risk facing the financial sector, Vice Chairman for Supervision Randal Quarles said regulators should more actively facilitate conversations between banks and national security agencies to boost digital security.

President Trump’s pick to head the Federal Reserve will face the Senate Banking Committee this week. Here’s what to watch for.