Week InReview | Fed's insurance experts look to create "tailored" rules | The Joint Forum unveils credit risk report | Investors can access post-trade ABS prices on FINRA's TRACE | Fed governor talks about asset manager oversight | Binge Reading Disorder
Friday, June 5, 2015
Fed vows diligence on insurance capital standards
Looking to create "tailored" rules
(Jun 4) The Fed is working to implement new tasks mandated by Dodd-Frank and is committed to a formal rulemaking process for insurance capital standards to include a comment period and cost-benefit analysis. To meet its new obligations, the Fed has dedicated more than 70 people with insurance-industry expertise as it looks to create "tailored" rules to regulate the industry's SIFIs, Thomas Sullivan, a senior advisor on insurance at the central bank, said at a conference in New York. The Fed has embedded examiners full time at some of the larger insurers it supervises, and has taken a seat at the International Association of Insurance Supervisors, though it's still "relatively the new kid on the block," Sullivan said.
Regulatory roll-back
The Joint Forum unveils credit risk report
(Jun 2) The Joint Forum (BCBS, IAIS and IOSCO) released its "Developments in credit risk management across sectors; current practices and recommendations" report. It recommends that supervisors should be cautious against over-reliance on internal models for credit risk management and regulatory capital. It also cautions supervisors to caution against the "search for yield" environment created by monetary authorities and says they should be "cognisant of the growth of such risk-taking behaviours and the resulting need for firms to have appropriate risk management processes."
Expanded data on ABS available
Investors can access post-trade price on FINRA's TRACE
(Jun 1) Investors can now can access post-trade information for asset-back securities via the Financial Industry Regulatory Authority's Trade Reporting and Compliance Engine - TRACE. Access includes ABS transactions effected pursuant to the registration safe harbor afforded by 1933 Securities Act Rule 144A. FINRA is currently reviewing comments received for a proposal to expand dissemination of TRACE data to include collateralized mortgage obligations and other securities products.
Fed governor speaks about asset managers
Says oversight should be industry wide
(Jun 4) While he didn't rule out designating individual asset managers for stricter oversight, Fed governor Daniel Tarullo said oversight of asset managers should focus on industry overall, underscoring regulators' shift away from singling out individual companies as systemically important. Any potential risks, such as customer runs on accounts, would be "better addressed with market-wide regulation, as was the case in money-market funds, rather than through the designation of entities," Tarullo said at a conference in New York.
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