For many decades, the private debt market in the U.S. meant one thing: U.S. private placements. Private placements are the placement of debt or equity securities by a company (issuer) to an investor or group of institutional investors in a private transaction, as contrasted to the better-known and highly regulated public market.U.S. private placements refer … Read more
Those behind electronification The growth in electronic credit trading is no accident. For two decades, regulators, investors, and tech-savvy disruptors encouraged electronic credit trading to create more stability, transparency, liquidity, and access. Progress, though, was erratic, as periods of volatility often drove investors back to familiar traditional voice trading. COVID on the other hand, while … Read more
The bank failures in spring 2023 have increased recognition of the importance of the discount window for liquidity risk management. The focus on discount window preparedness is a welcome development, but any new liquidity requirement should be developed thoughtfully and with input from all stakeholders. This note describes 10 pitfalls the banking agencies should seek … Read more
News reports suggest that some federal financial regulators are planning to resurrect a 2016 proposed rule on executive compensation.[1] Limits on banker pay continue to play well politically in some quarters as a way of punishing banks or their executives for failings or misbehavior, or simply to lower compensation for bankers in general. That enthusiasm, however, … Read more
The banking crisis in March 2023 highlighted the shortcomings of the discount window’s current operations. Silicon Valley Bank and Signature Bank were not prepared to borrow from the Fed. This has led to calls for requiring banks to pre-position collateral at the Fed and test their arrangements to ensure that they can access the window … Read more
The Consumer Financial Protection Bureau published a Data Spotlight on Feb. 16 indicating that small credit card issuers offer much lower interest rates compared to the largest issuers. The report makes use of pricing data from the recently expanded Terms of Credit Card Plans (TCCP) survey, which is conducted by the CFPB every six months.[1] The added detail in … Read more
In July 2023, the U.S. banking agencies proposed a new capital charge for the unused portion of consumer credit card lines, as part of the Basel III Endgame package. The proposal introduced a new 10-percent Credit Conversion Factor (CCF), which functions largely as a risk weight applied to the unused credit line amount. Although this … Read more
Short-term consumer installment loans (commonly referred to as personal loans) are provided to consumers by banks and other regulated depository institutions as well as nonbank financial institutions. Since at least 2015, there has been a major shift in the market share of personal loans to so-called fintech companies. Generally speaking, fintechs are nonbank consumer finance … Read more
The Department of Justice merger guidelines, which were revised and reissued in December of last year, specify market concentration and change-in-concentration thresholds for determining whether a proposed merger raises competitive concerns. These thresholds are grounded in many years of legal precedent, theoretical and empirical economic research, as well as in the practical experience of the Department … Read more
An overview of The Council of Insurance Agents & Brokers’ Commercial Property/Casualty Market Index Q2/2023 Each quarter, The Council of Insurance Agents & Brokers releases its Commercial Property/Casualty Market Index. Here, we review the Q2 2023 findings, which utilize data from April 1 through June 30, 2023, and provide insights for the current quarter. PREMIUM … Read more