Week InReview
Fri Feb 2, 2018
Let's recap
In case you missed it . . .
Leverage is back: Wall Street takes cues from hands-off feds
"If the cops say you can have open containers in Central Park, what do you think is going to happen," said Richard Farley, who runs the leveraged-finance practice at Kramer Levin Naftalis & Frankel LLP (Feb 2)

Federal Reserve, OCC said to prepare a looser capital rule; revision to mimic Basel formula, ending some U.S. gold-plating (Feb 1)

Former Fed chair Alan Greenspan sees bubbles in stocks and bonds
The man who made the term "irrational exuberance" famous says investors are at it again. The bond bubble will be the critical one, Greenspan says; notes that the U.S. is working toward higher interest rates (Jan 31)

New fiscal worry: Too much short-term borrowing as deficit climbs
Change is in response to the Federal Reserve's moves to shrink bond portfolio and a fiscal outlook (Jan 31)

Treasury's Mnuchin wants transparency in SIFI designations
US Treasury Secretary Steven Mnuchin told a Senate committee that the process for identifying nonbank systemically important financial institutions such as life insurers should be more transparent (Jan 31)

Banker bonuses jumping while traders brace for smaller payouts
Wall Street bankers are celebrating this bonus season, while the party in trading divisions is somewhat more subdued (Jan 30)

Fannie-Freddie bill includes billions for affordable housing
A Senate bill to overhaul the U.S. mortgage-finance system would devote billions of dollars to boosting home ownership among lower-income borrowers. For some left-leaning lawmakers, that won't be enough. (Jan 30)
The Cyber Cafe
Cybersecurity news every Friday
US agencies could be at risk with Russian-probed software
Tech companies McAfee, Symantec and SAP allowed Russian authorities to access the source code of their products so they could sell in the Russian market. Cybersecurity experts say this presents potential risks that could affect at least 12 government agencies, including NASA, the Defense Department and the FBI.

Intel warned Chinese companies of chip flaws before U.S. goverment
Decision to disclose issue to select few customers, including Lenovo and Alibaba, has ripple effect through security and tech industries.

What Israel's cybersecurity landscape foreshadows for 2018
To get a grasp of the security landscape in 2018, we looked at the Israeli cybersecurity ecosystem, which is considered a global leader in he field.
- VB
CFTC solving "large numbers" in swaps markets:
Agency chair Giancarlo
(Feb 1) -- A new method to measure valuation in swaps markets and more accurately measure the amount of money at risk is being rolled out by the Commodity Futures Trading Commission, CFTC chair J. Christopher Giancarlo said in a speech in New York.  In one example offered by Giancarlo, the traditional "notional" measure of valuation for all U.S. swaps reporting entities as of December was $179 trillion. Under the new "entity-netted notionals" method, which was designed by agency chief economist Bruce Tuckman, the number drops to $15 trillion.  The new figure "is more normalized and intelligible," Giancarlo said, referring to the notional measure as "numbers without meaning."
Next round of big bank stress tests
Fed releases scenarios
(Feb 1) -- The Federal Reserve issued instructions to banks and supervisors for this year's round of Comprehensive Capital Analysis and Review and Dodd-Frank Act stress test exercises, the central bank said in a statement . Some highlights: 
  • 18 of the biggest and most-complex firms will be subject to quantitative and qualitative assessments of whether they have enough capital to weather a severe recession
  • 20 less-complex banks will face only quantitative tests of their capital sufficiency
  • CCAR evaluates capital planning using planned actions such as dividend payments and share buybacks
  • Dodd-Frank tests are "forward-looking" assessments using standard assumptions for all banks
  • For 2018 tests, severe scenario contemplates global recession that boosts unemployment by 6 percentage points and steepened yield curve
  • Banks required to submit data by April 5; Fed says it will announce results by June 30
Binge reading disorder
Hand-curated, chosen with love
Running the 'Doomsday Clock' is a full-time job. Really.
The group of scientists and scholars that make up the Bulletin of the Atomic Scientists fulfilled its most public duty last week. The group moved the hand forward on its famous "Doomsday Clock" to two minutes to midnight, indicating the planet has inched ever so closer to an apocalyptic end .
- CNN

More booms and busts as SEC, Fed lose independence?
Office of Information and Regulatory Affairs (OIRA) chief Neomi Rao said today the White House is considering legislation to put the "so-called" independents under OIRA's authority to review, delay and alter proposed rules that exists for other federal agency .
- Forbes

Corporate surveillance in everyday life
How thousands of companies monitor, analyze, and influence the lives of billions. Who are the main players in today's digital tracking?
Transparency.
Inclusiveness.
Consensus.