A senior Federal Reserve official wants broker-dealers to hold more capital, and be more closely watched by prudential regulators. He opposed as arbitrary recent proposals to sharply raise bank capital or restrict their size and activity. Regulators should instead ensure that capital is in place in the subsidiaries with the highest risk, such as trading, rather than seeking more debt issuance at the group holding company level.
The comments were made by Federal Reserve Bank of Richmond President Jeff Lacker, in a speech to the Council on Foreign Relations on the subject of too-big-to-fail banks. (more…)
New Century Bank lost more than $33 million because officers and directors disregarded the bank’s lending policies and failed to adhere to regulatory warnings about several commercial real estate loans, according to the Federal Deposit Insurance Corp.
07 May 2013Catherine Tomasko
The FDIC is suing the now-former executives in the U.S. District Court for the Northern District of Illinois. The complaint alleges they made numerous loans that violated the bank’s policies from April 2005 to July 2008, breaching their fiduciary duty and committing negligence along the way.
Hoping to put her stamp on the final rules for ”too big to fail” and the “Volcker Rule,” former FDIC Chairwoman Sheila Bair will head a new watchdog group called the Systemic Risk Council, featuring marquee names such as Paul Volcker and Brooksley Born.