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Regulators zero in on commodities

30 May 2022Bankscommodity risk, Federal Reserve, JP Morgan, nickelNick Dunbar

Bank exposures to commodities have reached record highs and in the wake of the nickel market turmoil in March, the Fed is warning about financial stability implications

Commodity bets return at large banks

1 July 2021Bankscommodity risk, ESG, green finance, regulationNick Dunbar

Carmakers and other industries need good risk management as they pivot toward climate-friendly products. This has prompted banks to return to taking outsized commodity bets, which in the past have caused trading losses and compliance disasters for many institutions.

A servant of two masters

17 June 2021Bankscentral banks, corporate bonds, leverage ratios, SLR, TLACNick Dunbar

Caught between a wall of QE cash and a web of capital rules, what is left for bank CEOs to do? The evidence from securities holdings, bond issuance and TLAC.

The $3 trillion hidden exposure behind the Archegos blowup

30 April 2021Banksequity financing, hedge funds, prime brokerage, repo lendingNick Dunbar

How the push for growth turned equity financing into a hotbed of regulatory arbitrage

Facing up to JP Morgan’s leverage relief threats

18 March 2021BanksBank of America, Covid-19, Federal Reserve, JP Morgan, leverage ratios, regulationNick Dunbar

The banking giant warned that it might slash its vast balance sheet if the Fed doesn’t roll over temporary leverage ratio relief. Could it unleash a wave of turmoil in wholesale markets if it doesn’t get what it wants?

How Covid forbearance gave banks a three trillion dollar boost

3 November 2020BanksBasel rules, CECL, Covid-19, Dodd-Frank Act, investment banking, tradingNick Dunbar

To keep banks operating smoothly during the pandemic, regulators eased capital requirements and boosted trading profits by underpinning financial markets. Did they go too far?

How Covid-19 sent a shiver through bank balance sheets

28 May 2020Bankscounterparty credit risk, credit valuation adjustment, Federal Reserve, mortgage-backed securities, quantitative easing, stress VaR, Value-at-riskNick Dunbar

In value-at-risk models, counterparty exposure and securities holdings, the impact of the pandemic appears across bank balance sheets

The adventures of CECL in banking land

27 May 2020BanksAccounting, CECL, corporate loans, IFRS 9, loan loss provisions, retail loansNick Dunbar

Should accounting be independent of bank supervision? The arrival of IFRS 9 provisioning at the height of the Covid-19 crisis has exposed a three way tussle between auditors, regulators and bank management.

US banks face yield curve stress test

9 March 2020BanksBank of America, Goldman Sachs, interest rates, JP Morgan, mortgage-backed securitiesNick Dunbar

The Covid-19 pandemic is driving bond yields to record lows. Meanwhile, the exposure of large US banks to falling rates has been amplified by regulatory changes and ballooning securities portfolios.

Goldman deploys slimmed-down model in retail push

17 December 2019BanksApple Inc, Basel rules, Goldman Sachs, qualifying revolving exposures, retail loansNick Dunbar

Goldman Sachs is venturing into consumer lending, with the help of Apple Card. Part of the strategy involves dramatic changes to the bank’s risk models

Descending the debt mount...
Inflation-busting is likely to involve a recession...
Regulators zero in on com...
Bank exposures to commodities have reached record ...
Cash positioning for an u...
While the Federal Reserve anticipates 2-3% interes...
Inflation and the corpora...
Inflation is supposed to be good for corporate bon...