Fed Reports Sharp Increase in Banking Mergers and Acquisitions

The first semiannual report on banking applications activity by the Federal Reserve shows a sharp increase in mergers and acquisitions during the first six months of 2014. The Federal Reserve, as one of the primary U.S. regulators, reviews applications from bank holding companies, state member banks, foreign banking organizations, and  savings and loan companies.  Applications […]

Whatever Happened to Money Market Fund Rates? The New World of Zero Return and High Risk

Here’s an interesting tidbit from Merrill Lynch on the various money market funds that investors can sweep excess cash into.  The yields are enough to bring retired investors trying to live off of yield to tears. It’s hard to believe looking back that a mere five years ago, prior to the financial meltdown, savers could […]

Would Bank Living Wills/Resolution Plans Actually Help Resolve the Next Banking Crisis?

The public portions of the annual resolution plans or living wills of 17 large financial institutions were jointly released by the FDIC and the Federal Reserve Board today.  The resolution plans describe in detail a financial institution’s plans for a rapid and orderly resolution under the U.S. Bankruptcy Code to address material financial distress or […]

Oops! My Calculator was Broken – Red Faces for both Bank of America and the Fed

One “tiny little error” resulted in red faces at both Bank of America (BAC) and the Federal Reserve when bank officials disclosed they had incorrectly calculated capital levels required for the annual stress tests.  The Fed apparently did not notice the error until Bank of America notified them. This would all be very funny except […]

Fed Says Largest Banks Would Lose Half Trillion Dollars Under Adverse Economic Conditions

Based on the results of the Federal Reserve’s stress tests, the nation’s 18 largest banks would collectively lose a massive $462 billion under an extremely adverse hypothetical economic scenario. Reflecting the severity of the stress scenario–which includes a peak unemployment rate of 12.1 percent, a drop in equity prices of more than 50 percent, a […]

Bank “Stress Tests” Results Due In March – Don’t Expect Anyone To Fail

Under the Dodd-Frank Act, the Federal Reserve is required to conduct stress tests which are forward-looking exercises to determine whether large institutions have sufficient capital to absorb large losses and support operations under severely adverse economic conditions. The supervisory stress tests include examining capital ratios, revenue and the size of potential losses.  The Federal Reserve […]

Staggering Debts Have Wrecked Our Economic Future

Bold actions by the Federal Reserve to smash interest rates to historically low levels were undertaken to reduce the burden of debt payments on consumers and businesses. The dramatic drop in interest rates since 2008, as well as a more cautious attitude towards debt by consumers, has resulted in lowering the household debt service ratio […]

Negative Real Interest Rates – The Invisible $290 Billion Tax On Savers

Whatever happened to the concept of earning interest on savings?  Since the start of the financial crisis in 2008, the Federal Reserve has aggressively suppressed interest rates to near zero. The Fed’s rationale for lowering interest rates was to get the economy back on track by lowering borrowing costs for both consumers and businesses.  Lower […]

Fed Guarantees Bank Savers Negative Returns

Anyone with savings in the bank is painfully aware of the fact that they are receiving only slightly more income than someone who keeps their savings under the mattress.  In an attempt to stimulate credit demand by lowering interest rates to near zero, the Federal Reserve has effectively guaranteed negative returns to savers after taking […]

Secrets of The Federal Reserve Visually Explained

The Federal Reserve has virtually unlimited power over the economic future of America yet few people know much about it.  Is the Fed saving or destroying America? Here’s a neat history of the Federal Reserve published by Mint.com. by Mint.com.Learn about infographic design.