Jeremy Kress

Stress Tests Give Banks More Say on Criteria in Fed’s Proposal Wall Street lenders would get an early peek into criteria for upcoming stress tests under a new plan being considered by the Federal Reserve to overhaul its marquee exam.

"There is simply no legal requirement to turn the stress test into an open-book exam where banks get to help pick the questions. This is a policy choice, and a bad one at that." -- Me, being grumpy about the Fed capitulating to the banks, yet again

www.bloomberg.com/news/article...

Inexplicable that Lisa Cook continues to support harmful bank deregulation by the administration that's trying to illegally fire her. SMDH.

www.federalreserve.gov/aboutthefed/...

Despite what the Fed claims, there is no legal requirement to turn the stress test into an open-book exam where the banks get to help pick the questions. This is a policy choice, and a bad one at that.

Reminds me of a cartoon a colleague once taped to my door.

JPMorgan warns First Brands fallout driving up banks’ funding costs Concerns mount about hidden exposure to private capital firms and hedge funds in wake of credit market wobbles

From today's FT:
www.ft.com/content/0fb7...

Earlier this year, JPMorgan refused to comply with new nonbank lending disclosure requirements [left].

Today, JPMorgan attributed recent turmoil in bank stocks to "very poor" nonbank lending disclosure [right].

🫠

A deeply unserious statement on the Fed’s decision today to ignore the financial implications of climate change from the supposedly moderate, institutionalist candidate to be the next Fed chair.

Agencies announce withdrawal of principles for climate-related financial risk management The federal bank regulatory agencies today announced the withdrawal of interagency Principles for Climate-Related Financial Risk Management for Large Financial

The Fed, FDIC, and OCC proposed climate-related financial risk management principles for public comment before adopting them in 2023.

Today, the agencies rescinded them with no notice and comment.

Once again, the APA only applies in one direction. SMDH.

www.federalreserve.gov/newsevents/p...

Banks’ Stock Buybacks Jump $10 Billion After Easier Fed Test Four of the biggest US banks almost doubled their stock buybacks in the first full quarter following the Federal Reserve’s annual stress test, which the lenders all comfortably passed in June.

Bookmarking for later this week when the Fed proposes further weakening the stress test “to boost lending.”

www.bloomberg.com/news/article...

All of these Domestic Systemically Important Bank mergers might be less objectionable if regulators had done *literally anything* to improve DSIB regulation in the aftermath of March 2023.

Important story about what we lose when a handful of behemoths dominate the banking system.

“We don’t talk much about small businesses with enduring financial needs that have been forced into shotgun weddings with soulless institutions that are disinterested in their futures.”

With the US potentially coming to Argentina's financial rescue, I'm sharing my new paper on "Financial Statecraft."

It critiques the government's deployment of the banking system for geopolitical purposes and proposes reforms to rebalance public and private power.
papers.ssrn.com/sol3/papers....

Kate Judge, Co-Chair, Better Markets Academic Advisory Board & Columbia Law Prof. joins @jeremykress.bsky.social, Assoc. Professor U-M Business and Co-Faculty Dir. U-M Ctr on Finance, Law & Policy; @skandaamarnath.bsky.social, Exec. Dir. @employamerica.bsky.social to discuss what's next for the Fed.

May help explain why Bessent threatened to punch Pulte “in his fucking face”?

Looking forward to speaking at this event on Friday, where I will try to answer the question, "What's Next for the Federal Reserve?" 👇

The story tonight is not that Gov. Cook gets to vote this week.

The Katsas dissent is *the* story.

That the only Trump-appointed judge to opine on this case would effectively eliminate Fed independence is an ominous sign for what SCOTUS may ultimately do…

I was delighted to contribute to the Yale JREG symposium on @seanvanatta.bsky.social and @petercontibrown.bsky.social's excellent new book.

My essay examines what the book can teach us about efforts to eliminate management ratings from the supervisory toolkit.
www.yalejreg.com/nc/in-defens...

Nobel laureate Peter Diamond's Fed nomination languished in the Senate for more than a year.

Stephan Miran is going to get confirmed in less than two weeks.

Today, the FSOC cut its own budget by >30%.

The FSOC is funded through fees paid by large financial institutions, so this saves taxpayers $0.

home.treasury.gov/policy-issue...

I am very much done with the histrionics about *Biden* politicizing the Fed.

Judge to Trump: Either prosecute and convict Gov. Cook or GTFO.

People who rent out dubiously mortgaged houses shouldn’t throw stones.

The ease with which the Senate Banking Committee let Stephan Miran disown his past writings contrasts sharply with how they forced Saule Omarova to defend mischaracterization of her scholarship just four years ago.

By my count, a solid majority of the comment letters on the banking agencies' supplementary leverage ratio proposal oppose the rule.

Definitely inconsistent with Powell's standard that final rules should have "broad support among the broader community of commenters on all sides."

I’m starting to think the Fed appeasing Trump at every step of the way was not the right move.

Full letter posted here: www.federalreserve.gov/apps/proposa...

This week's grumpy comment letter is a big one: the enhanced supplementary leverage ratio.

Regulators want to cut big-bank capital requirements by $213B.

Decades from now, when we look back at all of Trump's bad banking rules, decent chance this one stands out as the worst.

💯

Killer kicker in this article:

Brad Lipton and @srf1802.bsky.social just wrote a really important piece about the weaponization of standing and venue that everyone should read.

I think I strained a muscle from rolling my eyes so hard after reading this quote.

www.californialawreview.org/online/rigge...