Blog: Bank regulations as a tax on lending
May 22, 2017
Some bank regulators have concluded that when they require banks to hold more liquidity or capital against a specific type of lending, the banks will do more of it. In this blog post, we explain why that thinking is mistaken and how excessive capital and liquidity regulations lead to banks lending less.
Blog: CCAR Scenarios are Countercyclical, but Fed Staff's Projections show them to be Farfetched
May 17, 2017
Under the Federal Reserve’s published standard, the severely adverse scenario used in its annual CCAR stress tests should be constructed to “generate scenarios that…do not induce greater procyclicality in the financial system and macroeconomy” and to match “…severe post-war U.S. recessions….” We conclude that, when evaluated using the assessment of the outlook that the Fed staff provides the Federal Open Market Committee (FOMC), the supervisory stress scenarios are countercyclical but extraordinary implausible.
TCH Research Note: Are the Supervisory Bank Stress Tests Constraining the Supply of Credit to Small Businesses?
May 11, 2017
The Clearing House (TCH) research finds that the U.S. stress tests are constraining the availability of small business loans secured by nonfarm nonresidential (NFNR) properties, which account for approximately half of small business loans on the books of all banks.
Blog: Improvements to the Existing Regulatory Regime could Lead to Additional Economic Growth
May 2, 2017
The Clearing House Association submitted a paper to the Treasury Department to help support Treasury’s study of how financial regulation could be better aligned with the core principles for financial regulation identified in President Trump’s Executive Order 13772.
Blog: Reinstating Glass-Steagall is Unnecessary and Doesn't Make Sense
Apr 26, 2017
Notwithstanding the successful global effort to strengthen the resiliency of the banking and financial system that was initiated after the 2008 financial crisis, a number of policymakers have proposed plans to “reinstate” the Glass-Steagall Act, which, until 1999, had prohibited commercial banks from affiliating with any company that engaged in securities underwriting or dealing. The following identifies several key shortcomings of such proposals.