FED issued a statement to provide additional information to financial institutions regarding adjustments to its supervisory approach in light of the COVID-19. The key topics on which additional information has been provided include increased focus on monitoring, changed focus on examinations, extended time periods for remediation of supervisory findings, and continuous communication with institutions. Additionally, FED announced that it will establish a Primary Dealer Credit Facility (PDCF) and Commercial Paper Funding Facility (CPFF) to support credit needs of households and businesses.
In its statement on adjustments to its supervisory approach, FED provides the following key information:
- FED will focus on monitoring and outreach to help financial institutions of all sizes understand the challenges and risks of the current environment
- To minimize disruption and to focus on outreach and monitoring, FED will temporarily reduce its examination activities, with the greatest reduction in activities occurring at the smallest banks. FED intends to reassess its approach to examinations in the last week of April to determine whether conditions have changed.
- Large banks should still submit their capital plans that they have developed as part of the Comprehensive Capital Analysis and Review (CCAR) by April 06, 2020. The plans will be used to monitor how firms are managing their capital in the current environment
- To allow firms to focus on heightened risks in this current environment and assist consumers, additional time will be granted for resolving non-critical existing supervisory findings. FED is extending the time periods for remediating existing supervisory findings by 90 days, unless FED notifies the firm that a more timely remediation would aid the firm in addressing a heightened risk or help consumers.
Additionally, CFTC announced that in response to the COVID-19 pandemic, the Division of Swap Dealer and Intermediary Oversight (DSIO) issued two additional no-action letters providing temporary, targeted relief to a large U.S. bank that helps finance America’s oil and gas sector and to those who operate commodity-focused investment funds the CFTC regulates. DSIO has granted temporary, targeted no-action relief to Commodity Pool Operators from certain reporting requirements.
- Press Release on Supervisory Approach
- Statement on Supervisory Approach (PDF)
- Press Release on PDCF
- Press Release on CPFF
Keywords: Americas, US, Banking, Securities, COVID-19, Supervisory Approach, CCAR, PDCF, CPFF, Deadline Extension, Swaps, Swap Dealer, Investment Funds, Reporting, CFTC, FED
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
ECB published Guideline 2021/975, which amends Guideline ECB/2014/31, on the additional temporary measures relating to Eurosystem refinancing operations and eligibility of collateral.
EIOPA published a report, from the Consultative Expert Group on Digital Ethics, that sets out artificial intelligence governance principles for an ethical and trustworthy artificial intelligence in the insurance sector in EU.
HKMA published the seventh and final issue of the Regtech Watch series, which outlines the three-year roadmap of HKMA to integrate supervisory technology, or suptech, into its processes.
EC launched a targeted consultation to improve transparency and efficiency in the secondary markets for nonperforming loans (NPLs).
BIS, Danmarks Nationalbank, Central Bank of Iceland, Norges Bank, and Sveriges Riksbank launched an Innovation Hub in Stockholm, making this the fifth BIS Innovation Hub Center to be opened in the past two years.
FDITECH, the technology lab of FDIC, announced a tech sprint that is designed to explore new technologies and techniques that would help expand the capabilities of community banks to meet the needs of unbanked individuals and households.
EC released the EU Taxonomy Compass, which visually represents the contents of the EU Taxonomy starting with the EU Taxonomy Climate Delegated Act.
FDIC is seeking comments on a rule to amend the interagency guidelines for real estate lending policies—also known as the Real Estate Lending Standards.
EIOPA published its annual report, which sets out the work done in 2020 and indicates the planned work areas for the coming months.
The ESRB paper that presents an analytical framework that assesses and quantifies the potential impact of a bank failure on the real economy through the lending function.