Sky Blog
Financial regulatory institutions are at the center of intense debates over how to supervise financial firms and markets. They are also the focus of an important and growing body of literature that is mainly concerned with the question, “Who…
The 2008 financial crisis was catastrophic for the U.S. banking industry. Between 2007 and 2014, 510 banks failed. Another 700-plus banks received some type of federal monetary assistance. Unsurprisingly, this led to calls to hold bank directors and officers legally …
After a period of public consultation, the European Central Bank (the “ECB”) published its final Guidance on Leveraged Transactions (the “Guidance”) on May 16, 2017[1]. Twenty-four organisations (comprising credit institutions and market associations) commented directly on the ECB’s …
We can learn a lot from the evolution of smartphones as we try to envisage where the fintech ecosystem–and banks’ role within it–might be heading in the future. Smartphones have ushered in an age when different companies can easily work …
On January 26 the Basel Committee on Banking Supervision (BCBS) released its first set of Frequently Asked Questions (FAQs) on the Fundamental Review of the Trading Book (FRTB). The BCBS published the FRTB in January 2016 with the intent to …
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 …
In recent years, policymakers have struggled with the question of how to prevent bank failures. The Dodd-Frank Act offers one answer, calling for stress tests that examine through economic models how banks of a certain size would react to a …
The Comptroller of the Currency (the “OCC”) has been working for over a year to develop a comprehensive framework to improve the OCC’s ability to identify and understand trends and innovations in the financial services industry, as well …
The latest chapter in the saga of resolution planning under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) unfolded in December 2016 when the Federal Deposit Insurance Corporation (the “FDIC”) and the Board of Governors of …
New York’s Department of Financial Services (DFS or the Department) has responded to a large volume of comments about its proposed, sweeping cybersecurity regulation for banks, insurers and other financial service providers by softening a number of provisions that many …
The pendulum swung sharply back last year from 2015’s record volume of corporate non-prosecution agreements (“NPAs”) and deferred prosecution agreements (“DPAs”), but the overall yield remained generally consistent with the prosecutions we have seen since the 2008–2009 economic recession.[1]…
The regulation of bank capital and liquidity has been in sharp focus ever since the financial crisis of 2008-09. The Basel Committee on Banking Supervision (“BCBS”) has led the work internationally to develop a revised set of capital and liquidity …
The syndicated loan market is one of the largest sources of financing for U.S. firms. This market has experienced tremendous growth over the past 20 years. In fact, some recent estimates suggest that U.S. firms obtain over $1 trillion in …
There are two established explanations for bank runs: coordination problems among depositors and information asymmetries between bank managers and depositors. In a new paper, “Information Gaps and Shadow Banking,” forthcoming in the Virginia Law Review and available here, I …
Small and medium-size enterprises (SMEs) play a significant role in the global economy, accounting for a substantial portion of employment and domestic production. According to some estimates, SMEs’ contribution to gross domestic product exceeds 51 percent in high-income countries, consistent …
U.S. regulators, led by the Office of the Comptroller of the Currency (OCC), are starting to examine sales practices at large and mid-size banks. They will likely first focus on whether banks have opened accounts for customers without consent as …
Prior to the 2008 financial crisis and the Great Recession, global banks were big, broad and borderless. They operated as integrated groups. Separate legal entities within a group were an afterthought: The results that mattered were those for lines of …
The New York State Department of Financial Services (the “Department”) issued a guidance memorandum on October 11[1] requiring regulated New York-chartered banking institutions to align their incentive compensation practices with the general principles laid out in the Interagency Guidance …
Over the summer, the Federal Reserve Board (Fed) concluded the comment period on its reproposed single counterparty credit limits (SCCL) rule issued in March 2016.[1] SCCL is intended to reduce systemic risk by limiting a banking organization’s credit exposure …
Many contemporary discussions of finance or of subjects that implicate finance – for example, federal budgetary or finance-regulatory policy – seem to be systematically colored by a seldom-examined presumption. We call this presumption the “intermediated scarce private capital myth.”
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