In wake of Federal Reserve report, ‘signs of developing risks’
Following the release of the Federal Reserve’s inaugural Financial Stability Report, National Association of Federal Credit Unions (NAFCU) Chief Economist and Vice President of Research Curt Long said economic growth is strong, but “there are signs that risks are developing.”
“Corporate debt is one key area to watch, as years of easy money have contributed to a rise in debt levels,” Long cautioned.
The Financial Stability Report revealed that business-sector debt relative to the GDP “is historically high and there are signs of deteriorating credit standards.” Household borrowing, alternatively, “is at a low-to-moderate level relative to incomes,” the report found.
Read more: CU Today
US encourages banks to innovate in anti-money laundering compliance
Banks that find problems with legacy compliance programs when testing new technology won’t necessarily be penalized for prior failures, U.S. regulators said Monday.
The pledge, in a statement from multiple U.S. regulatory agencies, comes as authorities encourage lenders to try out new technology and intelligence-gathering methods as they combat evolving illicit-finance threats.
“Private sector innovation, including new ways of using existing tools or by adopting new technologies, can be an important element in safeguarding the financial system against an evolving array of threats,” Sigal Mandelker, the U.S. Treasury Department undersecretary for terrorism and financial intelligence, told lawyers and compliance officers Monday during a speech in Oxon Hill, Md., at a financial crimes enforcement conference hosted by the American Bankers Association and the American Bar Association.
Read more: Wall Street Journal
OCC: Swelling corporate debt could come back to bite banks
Banks’ heavy involvement in the corporate debt markets could make them more vulnerable in a sudden downturn, the Office of the Comptroller of the Currency (OCC) said Monday.
The agency’s semiannual report on looming risks in the industry placed a heavy focus on the high volume of commercial loans as well as banks’ exposure to nonfinancial corporate debt, which is near a record share of GDP. The OCC also repeated concerns about the growth of lending to highly leveraged companies.
In a conference call accompanying the release of the Semiannual Risk Perspective, Comptroller Joseph Otting said a bigger risk with leveraged lending is occurring outside the banking industry, but he said banks should be vigilant about underwriting commercial borrowers.
Read more: American Banker
Thank you for choosing the Situs Newswatch. If you want to see your company here or have an idea for coverage, please respond to this email or email firstname.lastname@example.org for more information.
General. This disclaimer applies to this publication and the verbal or written comments of any person presenting it. In this publication Situs Group LLC taken together with its affiliates are collectively referred to as “Situs”.
Forward Looking Statements. Forward looking statements (including estimates, opinions or expectations about any future event) contained in this publication are based on a variety of estimates and assumptions. There can be no assurance that any such estimates and/or assumptions will prove accurate, and actual results may differ materially.
No advice. Situs advises that no statement in this publication is to be construed as advice of any kind, including, without limitation, as a recommendation to make any investment or to buy or sell any security or as investment advice. The examples contained in this publication are intended for use as background on the real estate industry as a whole, not as support for any particular real estate investment or security.
Information. Certain information contained in this publication includes articles, data, calculations and/or figures that have been prepared by and obtained from others, including publically available sources. Such information has not been audited or verified by Situs. This publication does not purport to be complete on any topic addressed. This publication may contain the subjective views of certain Situs employees and may not necessarily reflect the collective view of Situs or certain Situs business units.
Logos, trade names, trademarks and copyrights. Certain logos, trade names, trademarks and copyrights included in this publication are strictly for identification and informational purposes only. Such logos, trade names, trademarks and copyrights may be owned by companies or persons not affiliated with Situs. Situs makes no claim that any such company or person has sponsored or endorsed the use of any such logo, trade name, trademark and/or copyright.