Bank of America CFO Joe Price defended fair value accounting methods, which he said makes risk “more transparent,” in remarks to a Federal Reserve Bank of Chicago conference in mid-May.

The Fed Might Be Done, but the Economy Isn’t

After the FOMC’s latest cut in the funds rate to 2.00 percent, a consensus formed that the Fed is done.  Frankly, the Fed was done for all practical purposes when they cut rates on March 18 to 2.25 percent, which brought the funds rate down 300 basis points in six months.  The last cut was a mere token cut.  The cuts that mattered are the ones that occurred before this last small cut.  In other words, the serious work has been done.  

 In response to the upheaval in financial markets that began last summer, and in recognition of the interplay of credit, funding and market liquidity risk, the Basel Committee on Banking Supervision (BCBS) initiated an update of its February 2000 policy statement on liquidity risk management.

In a highly unusual move, the FDIC has proposed to Congress a program for the relief of troubled mortgage borrowers. The program does not appear to have the support of the administration, any particular bloc in Congress, or even of the other financial regulatory agencies. Rather, it seems to represent the recommendations of the agency’s activist chairman, Sheila Bair.