Dodd-Frank News Center

Fed expands scope and duration of Municipal Liquidity Facility

This story appeared in Bank Digest.

The Federal Reserve Board is expanding the scope and duration of the Municipal Liquidity Facility (MLF), which was announced on April 9, 2020, and will offer up to $500 billion in lending to states and municipalities to help manage cash flow stresses caused by the coronavirus pandemic.

Among other changes, the Fed announced new population thresholds it said will allow substantially more entities to borrow directly from the MLF than the initial plan announced on April 9. The termination date for the facility has been extended to Dec. 31, 2020, in order to provide eligible issuers more time and flexibility.

Fed takes temporary actions to increase availability of intraday credit

This story appeared in Bank Digest.

The Federal Reserve Board has announced temporary actions aimed at increasing the availability of intraday credit extended by Federal Reserve Banks on both a collateralized and uncollateralized basis. The Fed said these temporary actions are consistent with the series of actions it has announced to support the flow of credit to households and businesses and to mitigate the disruptions from COVID-19. These temporary actions will be applied immediately and will remain in effect until Sept. 30, 2020, unless the Fed communicates otherwise prior to that date.

 

Agencies to host webinar on transition provision delaying CECL’s impact on regulatory capital

This story appeared in Bank Digest.

The Federal Deposit Insurance Corporation, Federal Reserve Board, and Office of the Comptroller of the Currency will host a webinar to discuss a new transition provision in an interagency interim final rule to delay the impact that the current expected credit losses (CECL) methodology for estimating allowances for credit losses has on regulatory capital. The webinar is scheduled for April 14, 2020, at 3:00 p.m. Eastern Time. The transition provision under the interim final rule is available to banking organizations that are required by U.S. generally accepted accounting principles to adopt CECL in 2020.

Fed announces temporary change to supplementary leverage ratio rule

This story appeared in Bank Digest.

To ease strains in the Treasury market resulting from the coronavirus and increase banking organizations' ability to provide credit to households and businesses, the Fed is implementing a temporary change to its supplementary leverage ratio rule. According to the Fed's press release, the change would exclude U.S. Treasury securities and deposits at Federal Reserve Banks from the calculation of the rule for holding companies and will be in effect until March 31, 2021.

The change is effective immediately, and the public comment period will be 45 days.

Primary Dealer Credit Facility Examined

This story appeared in Bank Digest.

In their continuing series on the emergency lending facilities created to address the financial crisis, New York Federal Reserve Bank Vice President Tobias Adrian and Research Officer Ernst Schaumburg examine the Primary Dealer Credit Facility (PDCF), which they describe as a borrowing facility open to any of the Federal Reserve Board's registered primary dealers--a subset of securities brokers and dealers that have an ongoing trading relationship with the Fed in their capacity as market makers for Treasury securities.

Fed Officials Testify About Lending Disclosures and Dodd-Frank Compliance

This story appeared in Bank Digest.

In a hearing (webcast) before the House Subcommittee on Domestic Monetary Policy and Technology, Scott G. Alvarez, General Counsel, Federal Reserve Board, and Thomas C. Baxter Jr., General Counsel, Federal Reserve Bank of New York provided testimony the different ways in which the Federal Reserve informs Congress and the American people about our policies and actions. The witnesses noted that their testimony was to “promote understanding of how the Federal Reserve fosters financial and economic stability and to facilitate an evaluation of our actions while also preserving the ability to effectively fulfill the responsibilities that the Congress has given the Federal Reserve.” They also described the Federal Reserve’s compliance with the disclosure provisions of the Dodd-Frank Act, as well as the March 2011 release, under the Freedom of Information Act, of documents regarding the use of the Federal Reserve’s discount window during the crisis.

Reg. W Exemption Provided for Purchase of Merrill Lynch Assets

This story appeared in Bank Digest

The Fed has granted Bank of America Corporation an exemption from Section 23A of the Federal Reserve Act and Regulation W to allow Bank of America, National Association, to purchase certain credit facilities from its affiliate, Merrill Lynch & Company, Inc.

In seeking the exemption, Bank of America Corporation noted that consolidating the two assets in its national bank subsidiary would better align the ongoing business and management of the assets with the bank's existing business unit, risk-management processes, and controls. Bank of America Corporation added that it was in the process of “transitioning towards a single, integrated operating model that will involve the alignment of one personnel unit to cover particular types of assets and technology platforms and to provide uniform underwriting and risk-management policies and procedures.”

Temporary U.S. Dollar Liquidity Swap Facilities Re-Established

This story appeared in Bank Digest.

In response to the re-emergence of strains in U.S. dollar short-term funding markets in Europe, the Bank of Canada, the Bank of England, the European Central Bank, the Federal Reserve, and the Swiss National Bank are announcing the re-establishment of temporary U.S. dollar liquidity swap facilities. These facilities are designed to help improve liquidity conditions in U.S. dollar funding markets and to prevent the spread of strains to other markets and financial centers. The Bank of Japan will be considering similar measures soon. Central banks will continue to work together closely as needed to address pressures in funding markets. The Federal Open Market Committee has authorized temporary reciprocal currency arrangements (swap lines) with the Bank of Canada, the Bank of England, the European Central Bank (ECB), and the Swiss National Bank. The arrangements with the Bank of England, the ECB, and the Swiss National Bank will provide these central banks with the capacity to conduct tenders of U.S. dollars in their local markets at fixed rates for full allotment, similar to arrangements that had been in place previously.

Monthly Report Issued on Credit and Liquidity Programs and Fed Balance Sheet

This story appeared in Bank Digest.

The Federal Reserve Board has issued its monthly report on the credit and liquidity programs that were created to address the financial crisis and the effect those programs have had on the Fed’s balance sheet. The report was issued as part of the Fed’s efforts to enhance transparency and to ensure appropriate accountability to Congress and the public concerning policy actions taken to address the financial crisis.

Monthly Report Issued on Fed’s Credit and Liquidity Programs

This story appeared in Bank Digest.

The Fed has issued its monthly report on the credit and liquidity programs that were created to address the financial crisis and the effect those programs have had on the Fed's balance sheet. The report was issued as part of the Fed's efforts to enhance transparency and to ensure appropriate accountability to Congress and the public concerning policy actions taken to address the financial crisis.