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Oct 21, 2014

Fed spotted JPMorgan ‘Whale’ risks years before scandal -inspector

NEW YORK/WASHINGTON, Oct 21 (Reuters) – The Federal
Reserve’s New York branch knew about risks JPMorgan Chase & Co
was taking with its massive “London Whale” derivatives bets four
years before they imploded, but it failed to act properly to
head them off, the U.S. central bank’s inspector general said.

The Fed’s Office of Inspector General said on Tuesday one of
the key flaws it uncovered in its probe of the 2008 transaction
at the Wall Street bank was the New York Fed’s over-reliance on
certain personnel who left the supervisory team in 2011. That
created a “significant loss of institutional knowledge” within
the team assigned to inspect JPMorgan, the report said.

Oct 20, 2014

Banks should defer bonuses 10 years, tap them for fines: Fed official

By Michael Flaherty

(Reuters) – Banks should defer bonus payments for 10 years and tap the bonus pool to pay any regulatory fines, a top Federal Reserve official said on Monday, taking aim at continued lapses across the industry even after the 2007-9 financial crisis.

New York Federal Reserve Bank President William Dudley said banks should move toward paying employees in debt securities for their annual incentive pay, rather than in equity.

Oct 17, 2014

At least 113 staffers at U.S. Fed earn more than Yellen

WASHINGTON (Reuters) – The top 113 earners among staff at the Federal Reserve’s Washington headquarters make an average of $246,506 per year, excluding bonuses and other benefits – more than Fed Chair Janet Yellen and nearly double the normal top government rate.

Yellen, whose salary is set by Congress, earns $201,700 a year.

The details on Fed pay were provided to Reuters in response to a Freedom of Information Act request for data on all employees of the U.S. central bank’s board whose salaries outstrip $130,810, which is the top of the government’s pay scale in most areas.

Oct 16, 2014

Fed official wants to keep up QE as inflation expectations slip

Oct 16 (Reuters) – The Federal Reserve should keep buying
bonds for longer than planned in the face of volatile markets
and falling inflation expectations, a top U.S. central banker
said on Thursday, even as another Fed policymaker warned against
an over-reaction.

James Bullard, president of the St. Louis Fed, is the only
official at the central bank to publicly suggest putting on hold
the Fed’s widely telegraphed plan to halt its asset-purchase
program later this month. Yields on U.S. bonds, which have
plunged the last few days, rebounded after his comments.

Oct 16, 2014

Exclusive: Fed considers using bank stress tests for crisis prevention

WASHINGTON (Reuters) – The Federal Reserve is considering turning its annual health check for big banks into one of the tools it could use to prevent a build up of excessive financial risks.

If deployed, the modified tests could force banks to retain billions of dollars that otherwise would have gone to shareholders. While the move would help cool off sectors at risk of overheating, it could spark the ire of bank executives, who complain of rising regulatory burdens.

Oct 16, 2014

Fed considers using bank stress tests for crisis prevention

WASHINGTON, Oct 16 (Reuters) – The Federal Reserve is
considering turning its annual health check for big banks into
one of the tools it could use to prevent a build up of excessive
financial risks.

If deployed, the modified tests could force banks to retain
billions of dollars that otherwise would have gone to
shareholders. While the move would help cool off sectors at risk
of overheating, it could spark the ire of bank executives, who
complain of rising regulatory burdens.

Oct 9, 2014

Bullard says market view of Fed’s rate path a ‘mistake’

LOUIS (Reuters) – The disconnect between the market’s view on the Federal Reserve’s rate hike path and the central bank’s own view is concerning, a top Fed official said on Thursday.

St. Louis Federal Reserve Bank President James Bullard echoed the view shared by the Fed’s policy-setting committee that investors and the central bank are far apart on their view of where interest rates will be at the end of next year.

Oct 8, 2014

Fed minutes show debate on changing rate guidance heating up

WASHINGTON/NEW YORK (Reuters) – The Federal Reserve’s debate on its interest rate guidance heated up last month, with several officials showing concern about misleading investors and pushing for a more data-dependent approach, according to minutes from its last policy meeting.

But as the Fed grapples with how to communicate its view on hiking rates, the minutes also show concern about the rising dollar, slowing inflation, and economic turmoil in Europe and Asia, factors that support the U.S. central bank’s current of keeping policy accommodation in place for the near future.

Oct 3, 2014

Bullard says Fed ‘far behind’ schedule for interest rate hike

By Michael Flaherty

TUPELO Miss. (Reuters) – The Federal Reserve’s third round of bond buying had a better than expected impact on the U.S. labor market, a Fed official said on Thursday, making it all the more necessary for the central bank to move faster with hiking interest rates.

St. Louis Fed President James Bullard pointed out that the economy has exceeded the economic forecasts the Fed presented in September 2012, when the central bank’s latest bond buying program – known formally as Quantitative Easing (QE) – was launched.

Sep 23, 2014

Fed officials take aim at regulations for small banks

LOUIS (Reuters) – Federal Reserve officials on Tuesday offered their support to the nation’s community banks, acknowledging that the complex financial reform effort is saddling small lenders with a heavy supervision load.

Kansas City Fed President Esther George, Fed Board Governor Jerome Powell and St. Louis Fed President James Bullard all addressed the issue at a community banking conference here.

    • About Michael

      "In June 2009, Michael Flaherty became a Chief Correspondent for Reuters News, leading a team of journalists who cover investment banking, mergers & acquisitions, private equity and hedge funds, equity capital markets, natural resources and property across Asia. He arrived in Hong Kong in Feb. 2008 as Reuters' Asia Financial Services correspondent, covering the investment banks and M&A. Flaherty was hired by Reuters in New York in Dec. 2003. He was voted Reuters Journalist of the Year for his 2007 coverage of the U.S. private equity boom and bust. He started at Reuters with the consumer group covering office retailers ..."
      Joined Reuters:
      Dec. 1, 2003
      Awards:
      Peninsula Press Club, 2002, Reuters Journalist of the Year, 2007, M&A International, 2007
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