The Board of Governors of the Federal Reserve System (FED) a report that assesses the stability of the financial system in the United States. The report reviews vulnerabilities related to valuation pressures, borrowing by businesses and households, financial leverage, and funding risk. It also highlights several near-term risks that, if realized, could interact with these vulnerabilities. Additionally, FED published results of the October 2021 Senior Loan Officer Opinion Survey on bank lending practices; the survey focused on changes in the standards and terms on, and demand for, bank loans to businesses and households over the past three months, which generally correspond to the third quarter of 2021.
Regarding loans to businesses, respondents to the October survey, on balance, reported easier standards and stronger demand for commercial and industrial loans to large and middle-market firms over the third quarter. Banks also reported easier standards for commercial and industrial loans to small firms, while demand from small firms remained basically unchanged. For commercial real estate, banks reported easier standards for all loan categories. Banks also reported stronger demand for multi-family loans and for loans secured by nonfarm nonresidential properties, while demand for construction and land development loans remained basically unchanged. For loans to households, banks eased standards across most categories of residential real estate loans, on net, and reported weaker demand for most types of residential real estate loans over the third quarter. Banks also eased standards across all three consumer loan categories—credit card loans, auto loans, and other consumer loans—while reports on demand for consumer loans were mixed.
The survey included a set of special questions enquiring about the current level of demand relative to pre-pandemic levels (defined as the end of 2019) for commercial and industrial and credit card loans as well as banks’ outlook for demand for such loans over the next six months. On balance, banks reported weaker levels of demand for all queried commercial and industrial and credit card loan categories compared with the end of 2019. Banks expect stronger demand for both commercial and industrial and credit card loans over the next six months.
Keywords: Americas, US, Banking, Lending, Financial Stability Report, Credit Risk, Residential Real Estate, Commercial Real Estate, Survey Results, RRE, CRE, FED
The Australian Prudential Regulation Authority (APRA) found that Heritage Bank Limited had incorrectly reported capital because of weaknesses in operational risk and compliance frameworks, although the bank did not breach minimum prudential capital ratios at any point and remains well-capitalized.
The Office of the Superintendent of Financial Institutions (OSFI) released the annual report for 2020-2021.
The Australian Prudential Regulation Authority (APRA) released the final Prudential Practice Guide on management of climate change financial risks (CPG 229) for banks, insurers, and superannuation trustees.
The European Banking Authority (EBA) Single Rulebook Question and Answer (Q&A) tool updates for this month include answers to 10 questions.
The European Commission (EC) has adopted a package of measures related to the Capital Markets Union.
The European Council adopted its position on two proposals that are part of the digital finance package adopted by the European Commission in September 2020, with one of the proposals involving the regulation on markets in crypto-assets (MiCA) and the other involving the Digital Operational Resilience Act (DORA).
The Prudential Regulation Authority (PRA) is proposing, via the consultation paper CP21/21, to apply group provisions in the Operational Resilience Part of the PRA Rulebook (relevant for the Capital Requirements Regulation or CRR firms) to holding companies.
The Board of Governors of the Federal Reserve System (FED) published a report that summarizes banking conditions in the United States, along with the supervisory and regulatory activities of FED.
The European Banking Authority (EBA) published the final report on draft regulatory technical standards for the calculation of risk-weighted exposure amounts of collective investment undertakings or CIUs, in line with the Capital Requirements Regulation (CRR).
The Australian Prudential Regulation Authority (APRA) recently completed two pilot initiatives in its 2020-2024 Cyber Security Strategy, which was published in November 2020.