Liquidity

Federal Reserve Gov. Christopher Waller said that criticisms of the Fed's balance sheet and calls to return to a scarce reserves system are misinformed, saying that much of the central bank's balance sheet is the result of activities outside the Fed's control.

In a paper, former central bank researchers make the case that the Federal Reserve could better support the Treasury market from disruptions in the cash-futures basis trade by hedging its asset purchases.

The Federal Housing Finance Agency issued a proposed rule for the Federal Home Loan Bank System that allows the FHFA director to set "reasonable" board compensation.

The Federal Housing Finance Agency has proposed a change to capital rules on interest-bearing deposit accounts that would increase the Federal Home Loan Banks' flexibility to manage liquidity during times of stress.

Federal Reserve Vice Chair for Supervision Michael Barr conceded major points to the industry on last year's capital reform proposal. But how regulators will approach other reforms in light of that experience is uncertain.

Home Loan bank executives said Congress would have to pass a law for the system to increase its affordable housing contribution above 10% of earnings.

The president of the Federal Reserve Bank of Dallas and former manager of the central bank's open market account said a slower approach to balance sheet reduction may be warranted sooner rather than later.

Federal Reserve officials point to overnight reverse repurchase agreement activity as an indication of excess liquidity, which the central bank is working to reduce. But some analysts say that excess liquidity may be drying up faster than expected, with important implications for banks.

In her first remarks since the release of a sweeping report on the banks, Federal Housing Finance Agency Director Sandra Thompson urges them to strengthen underwriting and communication with their members' regulators.

The use of the Federal Reserve's emergency lending facilities was largely unchanged this week, indicating to some that the recent liquidity crisis isn't getting any worse.

States have the option of adopting the oversight framework issued by the Conference of State Bank Supervisors, which resembles capital and liquidity plan proposed by the Federal Housing Finance Agency.

The move comes a day after the Federal Reserve had balked at the Treasury Department's demand that it return funds meant for pandemic relief that have so far gone unused.

The mortgage giants will have to meet benchmarks for covering cash flow needs during stressed periods. The FHFA views the requirements as a prerequisite to the companies exiting conservatorship.

An article in The Atlantic warning that collateralized loan obligations will be banks’ next downfall overestimates the risk of these securities.

The head of the U.S. central bank said its emergency credit programs were not designed to prop businesses up over the long term.

The Federal Reserve chairman pledged to use every tool at the central bank's disposal to limit the economic fallout from the coronavirus and urged lawmakers to take further action.

The central bank and other agencies have come under pressure to be transparent about their use of funds authorized by the recent pandemic rescue law.

The Senate Banking Committee chair will work with the heads of other panels in overseeing the $2 trillion stimulus package that Congress passed last month.

The letter written by Rep. Maxine Waters, D-Calif., and Sen. Sherrod Brown, D-Ohio, was seen as a boost to Wall Street lobbying efforts seeking to quell the fallout of the coronavirus crisis on the mortgage market.

The Fed's actions are designed to ensure the flow of credit to midsize businesses and state and local governments hit hard by the economic impact of the coronavirus pandemic.