Aug 012014
 

The US monetary policy outlook was front and center in financial markets this week.  On Wednesday, the Federal Reserve affirmed that the bond buying program will end in October.   The statement also indicated that rates will stay low for “a considerable period of time after the asset purchase program ends.”  When surveyed in June, policy makers said they did not expect to move to raise rates until the middle of next year.  Today’s non-farm payrolls report confirmed their patient outlook, but that’s provided little comfort to equity markets which are down for the second day in a row at the time of writing.

The FSOC met yesterday regarding the designation of some asset managers as systemically important (SIFIs).  GE’s financial unit and AIG are expected to be reaffirmed as SIFIs, while asset managers Blackrock and Fidelity are expected to escape this designation.  The council directed staff to do a more focused analysis of industry wide products and activities to assess potential risks within the asset management industry.  The committee could hand the SEC additional oversight responsibilities and require them to address specific risky activities.  The council pressured to SEC to address the risks posed by the money-market industry back in 2012, which were announced last week.  Next week should be fairly quiet on the policy front with Congress adjourning for the summer and no major economic data releases on tap.

 

 Federal Reserve Statement

http://www.federalreserve.gov/newsevents/press/monetary/20140730a.htm

 Fed Keeps Same Narrative Taper Proceeds But Markets Move

CFP Senior Fellow, Cliff Rossi on the FOMC Meeting

 https://moneymorning.com/2014/07/30/fomc-meeting-fed-keeps-same-narrative-taper-proceeds-but-markets-move/

 Fed Boosts View of Economy

http://online.wsj.com/articles/fed-boosts-economic-outlook-1406743735

Hilsenrath: Fed Can Remain Patient on Rate Hike Debate After Data

http://online.wsj.com/articles/wsjs-hilsenrath-fed-can-remain-patient-on-rate-hike-debate-after-data-1406901937

Asset Managers May Avoid Oversight

 http://online.wsj.com/articles/asset-managers-may-avoid-more-oversight-by-fsoc-1406828103

http://www.bloomberg.com/news/2014-07-31/risk-panel-to-focus-on-u-s-asset-managers-activities.html

OFR’s Initial Report on Asset Management Industry to FSOC (2013)

http://www.treasury.gov/initiatives/ofr/research/Pages/AssetManagementFinancialStability.aspx

http://www.treasury.gov/press-center/press-releases/Pages/jl2177.aspx

 China’s Banks Post World’s Largest Systemic Risk

 http://blogs.wsj.com/economics/2014/07/29/chinas-banks-pose-worlds-largest-systemic-risk/

http://www.euromoney.com/GatewayAd.aspx?Redirect=http%3a%2f%2fwww.euromoney.com%2fArticle%2f3364453%2fCategory%2f6%2fChannelPage%2f8959%2fChina-banking-risks-three-times-higher-than-US.html

New Accounting Rules on Bad Debts for Banks Outside U.S.

http://online.wsj.com/articles/iasb-gives-non-u-s-banks-a-loan-accounting-overhaul-1406203202

 

  One Response to “8/1 News & Policy Round-Up”

  1. […] Market participants and regulators wasted no time getting back to work despite a shortened week.  The FSOC met yesterday assigning the insurer, Metlife, with SIFI status.  The OCC released new guidelines requiring the nation’s banks to improve their risk management practices and another economist warned of a possible bank crisis in China, something we highlighted in our news and policy round-up several weeks ago. […]

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