The Clearing House research note finds that the Federal Reserve’s CCAR stress test is imposing dramatically higher capital requirements on certain asset classes – most notably, small business loans and residential mortgages – than Basel standardized models and banks’ internal models that are approved by the Federal Reserve.

TLAC requirement is a “final piece in the regulatory puzzle” needed to end risk of TBTF.

The Clearing House, along with the Securities Industry and Financial Markets, Financial Services Roundtable, American Bankers Association, Institute of International Bankers and  CRE Finance Council submitted a comment letter to bank regulators Friday on the proposed Net Stable Funding Ratio (“NSFR”) rule.  In the letter, the Associations express continued support for the maintenance of stable funding and liquidity profiles by banks, but urge that the NSFR not be implemented in the United States without an analytically sound rationale that considers its marginal benefits and economic costs.

The Clearing House today issued a white paper, The Custody Services of Banks, which describes the role of bank-chartered custodians.  The paper discusses the services provided by bank-chartered custodians, their relationships with financial market utilities (FMUs), and describes the different risks associated with custody services in comparison to those associated with other banking activities.

Jeremy Newell, General Counsel of The Clearing House Association (TCH), testified today before the House Financial Services Committee at a hearing focused on the tradeoffs in using a leverage ratio to assess capital adequacy as proposed in the discussion draft of the Financial CHOICE Act recently released by Chairman Hensarling.

In a new research note, The Net Stable Funding Ratio: Neither Necessary nor Harmless, The Clearing House finds the Net Stable Funding Ratio (NSFR) has no clear, defining objective and its benefits are in doubt while its economic costs may be substantial.

Greg Baer, President of The Clearing House Association (TCH), today testified before the Senate Committee on Banking, Housing and Urban Affairs at a hearing focused on bank capital and liquidity regulation.

In the letter, to the Basel Committee on Banking Supervision, the associations affirmed their support for the proposed withdrawal of the Advanced Measurement Approach framework.  The letter also offered recommendations on changes that would make the proposed standardized measurement approach more risk-sensitive and reflective of the current banking operational risk environment.

The letter to the Federal Reserve on its reproposal of the single-counterparty credit limit (SCCL) requirement of the Dodd-Frank Act, notes substantial improvements included in the March 2016 reproposal, and details some problematic aspects that still remain that could make the rule needlessly difficult to implement and in some instances unworkable.

The Clearing House and the International Swaps and Derivatives Association today issued a white paper identifying key issues that regulators should consider as they develop a comprehensive resolution framework for systemically important CCPs.

The Clearing House (TCH) issued a report, The Role of the Board of Directors in Promoting Effective Governance and Safety and Soundness for Large U.S. Banking Organizations, to serve as a resource to both banks and their supervisors about the respective roles of directors and management.  The report highlights the growing responsibilities and emphasis being placed on banking organizations’ board of directors by U.S. regulators.  It also provides recommendations to regulators on how best to address what is often seen as a divergence between the role of the board, which is one of oversight, and regulatory compliance-related expectations for directors which at times may overlap with management’s responsibility. 

In a letter to the Federal Reserve Board, The Clearing House (TCH) calls for the proposal for implementing a countercyclical capital buffer to be revised to ensure that any future decision to establish a countercyclical capital buffer is subject to notice-and-comment rulemaking, as required by the Administrative Procedure Act.  The letter also suggests that the proposal be empirically grounded.

Jack Henry & Associates, Inc. (NASDAQ:JKHY) is a leading provider of technology solutions and payment processing services primarily for the financial services industry. Its JHA Payment Solutions™ group today announced a partnership with The Clearing House (TCH) to expand the scope of U.S. financial institutions equipped to send and receive new real-time transactions. 

Late Friday, The Clearing House, the Securities Industry and Financial Markets Association, the American Bankers Association, the Financial Services Roundtable, and the Financial Services Forum submitted comments to the Federal Reserve in response to its proposal to impose  total loss absorbing capacity, long-term debt and related “clean holding company” requirements on global systemically important banking groups (G-SIBs).  The associations express the industry’s strong support for a TLAC requirement for G-SIBs, which is a crucial aspect of ending “Too Big to Fail” by helping ensure that these institutions can be resolved in an orderly way at the expense of creditors and shareholders (and not taxpayers). The associations also assert that the proposal contains a number of requirements that are counterproductive or unnecessary to achieving the Fed’s policy objectives.  In response, the associations provide a number of suggestions aimed at making the proposal more workable and effective. 
 

The Clearing House Association (TCH) today published a final updated version of its Guiding Principles for Anti-Money Laundering Policies and Procedures in Correspondent Banking. The Guiding Principles, which were initially published in 2002, are intended to provide guidance to U.S. banks engaged in foreign correspondent banking and to assist U.S. banks in implementing key anti-money laundering (AML) procedures.

The Clearing House (TCH) today welcomed the release of a report by the Federal Reserve outlining its progress in support of improvements to the U.S. payment system.  The Clearing House is the only ACH (automated clearing house) and wire operator in the U.S. other than the Federal Reserve, and TCH is currently working to build a new, ubiquitous real-time payment system.  As part of its effort, TCH worked to align its new real-time system with the Federal Reserve’s efforts to improve the U.S. payments system.

The Clearing House Payments Company acquired The Payments Authority, a Michigan based regional payments association. Located throughout the U.S., Puerto Rico, Virgin Islands, and Guam, regional payments associations (RPAs) are specially recognized providers of payments education, publications and support, historically focused on ACH. Following the acquisition, The Payments Authority will be combined with The Clearing House’s existing RPA, with the resulting RPA organization doing business as The Clearing House Payments Authority.

VocaLink, the UK-based international payment systems provider, has signed a contract with The Clearing House (TCH) to develop a national real-time payment service in the U.S. In October, the two companies announced they had signed a letter of intent, and today’s contract signing finalizes the partnership and clears the way for work to build the system to begin immediately.

The Clearing House (TCH) provided recommendations to the Committee on Payments and Market Infrastructures (CPMI) in response to CPMI’s recent report on concerns about the safe and efficient functioning of the correspondent banking market and potential measures to improve the correspondent banking environment.  In its letter, TCH agreed that technical improvements to information sharing and similar anti-money laundering and counterterrorism financing tools may be helpful in improving access to correspondent banking services.  However, TCH also stressed that it is just as important that policymakers and banks work together to better and more clearly define the roles and responsibilities of various stakeholders.

This working paper says payments systems need to evolve to deliver new value to users, support appropriate risk management, and reward innovation and investment.

The Clearing House (TCH) today announced that it is teaming with FIS^TM to deliver a ubiquitous real-time payment system for the United States.

Today, The Clearing House (TCH) announced it has entered into a letter of intent with VocaLink, the UK-based international payment systems provider, to help build and deliver core elements of TCH’s new real-time payment system for the United States. 

The Clearing House welcomes the Federal Reserve’s decision to adopt NACHA’s rules for same-day ACH.   Under the terms of NACHA’s ballot, the effective date of NACHA’s rules was contingent upon NACHA receiving written confirmation from the Federal Reserve Board that it will support the rules.  By confirming its support, NACHA’s same-day ACH rules will begin to take effect as of September 23, 2016, as indicated in NACHA’s ballot.

On September 18, The Clearing House Association (TCH) submitted a letter to the Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) recommending that global supervisory authorities require central counterparties (CCPs) to adopt four key enhancements to CCP risk governance and member consultation processes. 

In his statement, The Clearing House CEO Jim Aramanda noted that  although the final rule appears to include some improvements to the proposal, The Clearing House (TCH) remains concerned that the final rule failed to address a number of significant flaws identified in our comment letter. These remaining flaws will have meaningful and negative consequences, especially for the robustness and liquidity of markets served by activities disproportionately impacted by the final rule, and will result in adverse impacts to customers and the real economy.