Need to Know News
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Fed Governor Addresses Problems of Small Businesses
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Randall S. Kroszner spoke on the effects of the financial crisis on small business at a hearing of the House Committee on Small Business on November 20, 2008.
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Ag Committee Holds Derivatives Hearing
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Patrick M. Parkinson, Deputy Director, Division of Research and Statistics at the Fed was among those testifying before the House Committee on Agriculture, U.S. regarding derivatives. The hearing focused on the methods by which credit default swaps are traded and settled.
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Kohn Discusses Monetary Policy
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Fed Governor Donald Kohn discussed monetary policy in a major address to the Cato Institute’s annual monetary policy conference.
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Agencies Propose Appraisal Guidelines
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The federal bank, thrift, and credit union regulatory agencies on Nov. 13 jointly issued for comment proposed Interagency Appraisal and Evaluation Guidelines. The agencies said in a statement that the proposed guidelines would reaffirm supervisory expectations for sound real estate appraisal and evaluation practices.
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Fannie, Freddie Adopt Holiday Moratorium on Foreclosures
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The mortgage giants Fannie Mae and Freddie Mac announced they would suspend foreclosure sales and evictions for occupied properties through January 9 to help servicers avoid Christmas foreclosures.
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FDIC Legal Opinion Addresses Stored Value Cards
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The FDIC has approved a new General Counsel’s opinion on the insurability of funds underlying stored value cards and other nontraditional access mechanisms. The new General Counsel’s Opinion No. 8 replaces a previous version published in 1996.
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FOMC Extends December Meeting to Two Days
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The Federal Open Market Committee announced it would expand its December meeting to two days to allow additional time for discussion. The meeting will be held December 15 and 16.
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A Closer Look — News Analysis
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December 3, 2008 — The Treasury Department has not developed internal controls, has not hired enough professional staff, and has no way of ensuring that recipients of the $250 billion it has already spent under the Troubled Asset Relief Program (TARP) are compliant with executive pay limits, according to the Government Accountability Office (GAO).
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December 1, 2008 — The U.S. economy officially entered a recession nearly a year ago, according to the private National Bureau of Economic Research (NBER) which determines the official dates of the nation’s business cycles.
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November 28, 2008 — Umpqua Bank of Portland, Oregon has teamed up with a nonprofit organization to offer low-interest financing for energy saving home improvements and solar energy systems, a move it hopes will expand its market share in the environmentally conscious Northwest.
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November 26, 2008 — Did consumer spending plummet, take a nose dive, or fall off a cliff in October? The economic news has been so relentlessly bad of late, it’s getting hard to come up with words that adequately describe what it is doing.
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Did You Know?
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Suspicious Activity Reports (SARs) Filed by Depository Institutions
(Comparing first half 2008 with same period in the previous year)
39%: Increase in SARs reporting mortgage fraud
87%: Increase in SARs reporting wire transfer fraud
36%: Increase in SARs reporting consumer loan fraud
38%: Increase in SARs reporting activity by borrowers
38%: Decrease in SARs reporting computer intrusion
28%: Decrease in SARs reporting terrorist activity
Footnote: SARs reporting terrorist activity by year:
2003 — 495
2004 — 987
2005 — 958
2006 — 736
2007 — 687
First half 2008 — 252
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Sheshunoff Blogs
 Kenneth A. Guenther, Former President of ICBA “Citi’s Taxpayer Parachute,” lead editorial, The Wall Street Journal, November 25, 2008.
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Ten years ago President Bill Clinton, Treasury Secretary Robert Rubin, and Federal Reserve Chairman Alan Greenspan gave their blessing to the marriage of Travelers and Citibank — the largest corporate merger ever. For them it was a minor inconvenience that legislation providing the legal foundation for such a merger was still pending before the Congress.
Nine years ago Treasury Secretary Larry Summers was on point for the ...
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Tim Geithner and the Federal Reserve Bank of New York. President-elect Obama apparently is about to name Tim Geithner, president of the Federal Reserve Bank of New York, as the next secretary of the Treasury. This is an excellent choice. Under law, the president of the NY Fed also serves as vice chairman of the interest rate policy-setting Federal Open Market Committee (FOMC) of the Board of Governors of the Federal Reserve System — superb training for someone who soon will be the leader of President Obama’s economic team. The NY Fed, like the other 11 regional Federal Reserve Banks, plays an important hands-on supervisory role over banks of all shapes and sizes in its Federal Reserve district, while carrying forward important payment system functions. This is a very different and broader experience than making one’s fortune in the top ...
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from Sheshunoff Management Services
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Despite dynamic economic changes in the third quarter of 2007, pricing for banks remained generally strong in the period, and the number of announced transactions, both quarterly and year-to-date, is consistent with last year. Bank pricing is experiencing some downward pressure, but came in above or approximately equal to year-to-date medians for three of five commonly reported metrics, including price to earnings of 24.1x, higher than the nine-month ratio of 23.9x. Price to book and price to tangible book were off from prior quarters on slightly lower equity levels, but year-to-date data is in line with the prior three years. The transactions announced to date were struck prior to the events of the third quarter.
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