Thursday, 18 September 2014
Last updated 7 hours ago
May 14 2014 | 10:11am ET
The Federal Reserve has issued a stark warning to banks: Observe the buyout leverage limits it introduced with the Office of the Comptroller of the Currency last year, or face further action.
“Judging from aggregate market data, it appears that many banks have not fully implemented standards set forth,” Todd Vermilyea of the Fed’s Division of Banking Supervision and Regulation said. “A lot of work has been done to date by agencies to assess compliance with the guidance, but clearly much more work remains to be done and stronger supervisory action may be needed.”
While the OCC has publicly warned banks on the rules, which advise banks not to issue senior debt for buyouts worth more than six times a company’s cash flow, the Fed has until now taken a quieter approach, sending private letters to banks.
Still, the Fed has indicated it will go easier on the banks it regulates—Goldman Sachs, Morgan Stanley and foreign firms—than will the OCC, which has proclaimed a “no exceptions” policy. By contrast, the central bank said it would allow the banks under its purview to participate in a small number of such deals, totaling no more than 2% of their leveraged-loan book.
Aug 25 2014 | 11:21am ET
As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…
Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.