Financial Regulatory Forum

By Ted Knutson

WASHINGTON, July 19 (Thomson Reuters Accelus) - The low interest rate environment being pushed by the Federal Reserve can pose safety and soundness issues for some banks, Michael Stevens, senior executive vice president of the Conference of State Bank Supervisors, told Thomson Reuters Accelus Wednesday.

“Low interest rates are a supervisory concern because they can have a corrosive effect on net interest margins, which impacts profitability, which impacts capital formation, which affects the ability to lend more and to grow,” said Stevens. (more…)

By Al Yoon

NEW YORK, Aug 18 (Reuters) – In March of 2000, American homeowners got a scare.

Gary Gensler, a U.S. Treasury undersecretary, threw his support behind legislation whose impact could have jacked mortgage rates up to levels that would fly in the face of what lawmakers say is good for the nation: expanding homeownership.

He wanted Treasury to cut ties with Fannie Mae and Freddie Mac — companies whose federal charters make them the key vehicles for Washington’s housing policy and mortgage market intervention.

(James Saft is a Reuters columnist. The opinions expressed are his own)

By Jim Saft

HUNTSVILLE, Ala., May 25 (Reuters) – With tax credits for house buyers gone and tough new banking regulations on the way, expect lending in the United States to come under significant pressure.

Demand for mortgages, kept artificially high through the end of April by juicy credits for first-time and other buyers, has now crashed and, at least to judge by the fundamentals in the housing market, should stay low. Loans to consumers too will be getting, appropriately, more expensive, at least in part due to costs imposed by new financial regulations, which while if anything not tough enough from a prudential point of view will without doubt make banking less profitable.

Supply of loans to businesses will also be hit, and demand should remain slack.

The upshot is sluggish movement of money through the economy and, believe it or not, a Federal Reserve that keeps interest rates ultra low because of domestic concerns rather than simply because of fragility in Europe.

    SEOUL, Sept 7 (Reuters) – South Korea will take aggressive actions if there are any abnormal movements in capital, its top financial regulator said on Monday, amid growing concerns about adverse effects from abundant short-term liquidity. (more…)