Fed Issues Update On Dodd-Frank Framework, Director Responsibility And Annual Stress Tests

Tyler Durden's picture

The Fed just released its 'framework' for thinking about planning to implement their proposals to take notice of the Dodd-Frank rules. There is little if any detail in here but the main points, via Bloomberg headlines from the 173 pages of admittedly well structured, but unclarifyingly disappointing prose are as follows:

*FED BOLSTERS TOOLS FOR AVERTING COLLAPSE OF BIG FINANCIAL FIRMS

*FED REGULATIONS FOCUS ON CAPITAL, LIQUIDITY, STRESS TESTS

*FED RULES TARGET RISK MANAGEMENT, REMEDIATION, CREDIT RISK

*FED RULES TO LIMIT FIRMS' CREDIT RISK TO A SINGLE COUNTERPARTY

*FED TO IMPLEMENT RISK-BASED CAPITAL RULES IN TWO PHASES

*FED: FIRMS MUST ANNUALLY HAVE STRESS TESTS, PUBLICIZE RESULTS

*FED TO IMPLEMENT LIQUIDITY RULES IN PHASES

*FED RULE REQUIRES BANK DIRECTORS TO APPROVE LIQUIDITY RISK

*FED: FIRMS MUST ANNUALLY HAVE STRESS TESTS, PUBLICIZE RESULTS

*FED PROPOSES `TRIGGERS' TO `EARLY REMEDIATION' OF WEAKNESSES

Does this mean that we won't see bank CEOs on TV saying they do not have liquidity problems an hour before they go BK?

There is much left unsettled, incuding:

*FED OFFICIALS: INTERNATIONAL LIQUIDITY RULES NOT YET SETTLED

*FED OFFICIALS CONSIDERING WHICH STRESS-TEST RESULTS TO PUBLISH

*FED OFFICIALS WON'T FORECAST WHEN FINAL RULES WILL BE ISSUED

 

The full statement can be read in its entirety here, but we note there are 0 mentions of hypothecation, 453 of credit, 449 of liquidity, and 1 of repo! enjoy...

Fed Dodd Frank Stuff