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Tag Archives: Federal Reserve

Lingering Headwinds Make Recovery ‘Disappointingly Slow’

While various economic reports hint at improvements in the nation's economy since the economic crisis was in full swing, improvement is meek and recovery seems too strong a word to describe the progress thus far. Federal Reserve Chairman Ben Bernanke calls the pace of recovery ""disappointingly slow."" In a speech before the New York Economic Club Tuesday, Bernanke pointed out some of the lingering headwinds preventing the economy from more momentous progress.

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Banks May Get More Time on Basel III Requirements

The implementation of the Basel III capital rules may be postponed beyond the start of 2013, according to a joint statement released by the Office of the Comptroller of the Currency, the FDIC, and the Federal Reserve. The announcement follows a comment period during which many trade organizations and institutions expressed apprehension about the new requirements.

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Fed’s Duke Supports Idea of Different Rules for Community Banks

While admitting that creating mortgage lending regulations that prevent abuse without over-burdening community banks is challenging, Federal Reserve governor Elizabeth A. Duke suggested Friday that policymakers ""abandon efforts for a one-size-fits-all approach."" Duke first let community bankers know the federal regulatory agencies agreed to postpone the requirements that were set to go into effect at the start of next year. She also said in most cases, evidence supports community bankers' claims that their lending practices did not lead to the financial crises. For example, for community banks, their serious delinquency rate for subprime loans did not go much over 4 percent.

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How Proposed Basel III Rules Could Impact MSRs

The value of mortgage servicing rights (MSRs) may be changing, and the market for acquiring MSRs may be heating up. This market phenomenon is the result of the proposed Basel III capital rules applicable to banks. For non-banks, the Basel III rules may seem irrelevant, but that could be a mistake. The Basel III rules could change how MSRs are priced, who owns the MSRs, and ultimately which servicers handle servicing for the loans that relate to the MSRs.

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Senior Loan Officer Survey Reveals Increase in Demand for Loans

A survey of senior loan officers released by the Federal Reserve shows lending standards were mostly unchanged, but demand for residential real estate loans was strengthened. The October survey asked 68 domestic banks and 23 U.S. branches of foreign institutions about the lending standards and loan demand they've dealt with over the past three months. When asked about credit standards for prime mortgages, 59 out of 64 respondents said standards were largely the same. While 34 banks said demand for prime purchase mortgages was about the same, 21 reported ""moderately stronger"" demand, and four said demand was ""substantially stronger"" since July.

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Can the Fed’s QE3 Policy Save the Economy?

As the Federal Reserve launches its QE3 monetary policy, some interpret the plan as a sign Fed Chairman Ben Bernanke has ""gone 'all in' on the U.S. housing market"" and is clinging to hope the housing market can not only recover itself, but also restore the entire U.S. economy. This, at least, is the outlook of Global Markets Intelligence (GMI) Research. The research firm suggests the Fed is turning to the housing market ""as the last, best hope"" for strengthening the overall economy and restoring ""healthy self-sustained economic growth.""

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FOMC Maintains Policy Stance to Hold Down Rates

Pointing to slow employment growth and an ""elevated"" unemployment rate, the Federal Open Market Committee said Wednesday the Federal Reserve ""will continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month."" At the same time, the FOMC said it would maintain the target federal funds rate at 0 to 1/4 percent and said the ""exceptionally low levels for the federal funds rate are likely to be warranted at least through mid-2015.""

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Housing Takes Charge in 2012: Freddie Mac

The authenticity of this year's recovery may still be in question, but according to Freddie Mac's Economic and Housing Market Outlook for October, the housing sector is showing strength unmatched in previous years. Over the past several years, housing has either hurt or done little to help GDP. ""However, now we're seeing housing resuming its traditional role of leading the recovery charge and once again being the bright spot in the economy,"" said Frank Nothaft, VP and chief economist for Freddie Mac.

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Barney Frank Censures Lawsuits Targeting Firms’ ‘Good Samaritan’ Buys

Rep. Barney Frank (D-Massachusetts) is stepping up and speaking out in defense of JPMorgan Chase, calling the U.S. government's lawsuit against the financial institution a case of ""no good deed goes unpunished."" New York Attorney General Eric Schneiderman filed a suit against JPMorgan on October 1 for the alleged misconduct of Bear Stearns & Co. prior to JPMorgan's acquisition of the failing investment bank, and Frank says he has first-hand knowledge that federal officials urged JPMorgan to ""do a good deed"" by taking over an institution which JPMorgan would never have sought to acquire absent that urging.

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