Sky Blog
The Board of Governors of the Federal Reserve System (FRB) issued two notable documents over the past two weeks involving confidential supervisory information (CSI): a cease and desist order against a former bank employee for improper handling of CSI and …
On April 23, the Federal Reserve Board (the “FRB”) proposed a new, comprehensive framework for determining “control” under the Bank Holding Company Act (“BHC Act”) and Home Owners’ Loan Act (“HOLA”). We provide a high-level overview of the proposal below. …
Identity is fundamental in finance. At a time when huge TechFins like Amazon are making inroads into the financial services industry, major questions are arising as to the most effective methods of customer identification and meeting Know Your Customer obligations …
A federal district court in California has become the latest court to hold that the 10-year statute of limitations under the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (“FIRREA”) for offenses “affecting a financial institution” extends to offenses …
In a bank examination, regulators evaluate a financial institution’s compliance with applicable laws and regulations. The process is generally non-public, and the bank examination privilege helps keep it confidential. But questions have recently arisen about how the privilege is meant …
Two major challenges have arisen for financial services companies since the global financial crisis (GFC) of 2008. On the expense side, post-crisis fines have exceeded $200 billion, and the ongoing cost of regulation and compliance has become massive. On the …
There is an increasing worldwide focus on trying to end the problem of “too big to fail” (“TBTF”). Regulators are concerned that systemically important financial firms might engage in excessive risk-taking because they would profit from a success and be …
The latest Wells Fargo bank scandal has rekindled debates about breaking up banks that are too big to fail, too big to manage or too big to comply.
Echoing the debate between Louis Brandeis and Teddy Roosevelt in the Progressive …
A new type of warfare is upon us. In this new mode of war, finance is the most powerful weapon, bullets are not fired, financial institutions are the targets, and almost everyone is at risk. Instead of smart bombs, improvised …
Attackers last February reportedly stole $81 million from the Bangladesh Central Bank by obtaining and exploiting the bank’s credentials for the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network.[1] The attack – one of the biggest bank robberies in …
Why do sophisticated parties litigate under clouds of (easily resolvable) jurisdictional uncertainty?
In our recent essay available here, we argue that some sophisticated litigants do not raise obvious jurisdictional defects so that they can use jurisdictional uncertainty as a …
EU financial policymakers appear to be once more in a deadlock situation over proposals to limit the sovereign risk exposure of European banks. The strong exposure of some banks in the southern European periphery in their national sovereign’s debt was …
On Monday, LendingClub Corp., a leader in the growing online lending space, announced the surprise resignation of its founder and CEO, Renaud Laplanche. Laplanche resigned in response to a board investigation that revealed a number of internal control failures, including …
Culture is a potent force in shaping individual and group behavior, yet it has received scant attention in the context of financial risk management and the recent financial crisis. In my paper, The Gordon Gekko Effect: The Role of Culture …
A pending rulemaking (the “Proposed Rule”) by the New York State Department of Financial Services (the “NYSDFS”) would add potential New York State criminal liability to the burdens of chief compliance officers of New York chartered banks, trust companies, savings …
In September 2007, Northern Rock, a British bank, sought and received liquidity support from the Bank of England because of financial difficulties resulting from the global financial crisis. As a result of mounting political pressure that Northern Rock was exploiting …
Intermediation is a fundamental fact of finance. Investment banks underwrite stock offerings for companies. Commercial banks safeguard the savings of workers. Fund managers invest the pensions of retirees. Exchanges match orders of buyers and sellers. Brokers facilitate trades of investors. …
My recent paper explains why, from a bank supervisory perspective, the Federal Reserve’s Comprehensive Capital Analysis and Review (CCAR) program is arguably the single most significant and innovative post-crisis regulatory reform. Established in 2011, the CCAR is an annual Federal …
The quasi collapse of the global financial system during the crisis of 2007-2009 has triggered an extensive debate about the role of large complex banks. On the one hand, banks are seen as “too complex to fail”, and researchers and …
The Basel Committee on Banking Supervision (BCBS) on December 10th issued the second iteration of its proposed revisions to the standardized approach (SA) for credit risk measurement. Following up on last year’s initial issuance, the proposed revisions are intended …