Chief Correspondent, Hong Kong
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Apr 23, 2015

Fed eyes ability of asset managers to repay in a panic

WASHINGTON/NEW YORK (Reuters) – Sections of the U.S. financial system that may be vulnerable to investor panic are raising concerns inside the Federal Reserve, as policymakers preparing for the first interest-rate hike in nearly a decade seek to ensure that the market is ready and able to handle it whenever it happens.

The Fed is particularly worried about whether the booming asset management industry can withstand a run of redemptions in a financial crisis.

Apr 10, 2015

Fed’s Lacker says no shame in returning to zero after June hike

By Michael Flaherty

SARASOTA, Fla. (Reuters) – Federal Reserve official Jeffrey Lacker on Friday repeated his call for the central bank to consider hiking interest rates in June, and said there was no shame in adjusting them lower again if economic data demanded it.

“If we were to raise rates, and then subsequently reduce them to zero, it might be unexpected, but presumably we’re setting rates where we ought to be,” Richmond Fed President Jeffrey Lacker said in a question and answer session to reporters after a speech here. “I don’t see it as problematic to reduce rates having raised them once.”

Apr 10, 2015

Richmond Fed chief Lacker says no shame in returning to zero after June hike

By Michael Flaherty

SARASOTA, Fla. (Reuters) – Federal Reserve official Jeffrey Lacker on Friday repeated his call for the central bank to consider hiking interest rates in June, and said there was no shame in adjusting them lower again if economic data demanded it.

“If we were to raise rates, and then subsequently reduce them to zero, it might be unexpected, but presumably we’re setting rates where we ought to be,” Richmond Fed President Jeffrey Lacker said in a question and answer session to reporters after a speech here. “I don’t see it as problematic to reduce rates having raised them once.”

Apr 9, 2015

Senate seen waiting for Obama until Fed nominee hearing called: sources

WASHINGTON (Reuters) – The Senate Banking Committee is expected to wait to hold a hearing for the nomination of a community banker to the Federal Reserve until the White House moves to fill the central bank’s other open seat, according to people familiar with the matter.

Waiting gives committee Chairman Richard Shelby more time and options to put his stamp on the central bank, as the Fed still has a seventh empty board seat to fill. Another vacancy at the Fed board is the vice chairman for Supervision, a position created by the 2010 financial reform law known as Dodd-Frank that the White House has yet to fill.

Apr 1, 2015

More permanent role seen for Fed’s repurchase program

By Michael Flaherty and Howard Schneider

STONE MOUNTAIN, Ga. (Reuters) – A pledge by the U.S. Federal Reserve to phase out a new tool to lift interest rates is being challenged by economists and financial professionals who think the central bank may need to keep using it longer than Fed officials expect.

As the Fed approaches an interest rate hike – expected later this year – it will use a suite of tools, including an overnight reverse repurchase facility (ON RRP) for money market funds to help lift its traditional federal funds rate from near zero.

Apr 1, 2015

U.S. regulators struggle in effort to tackle shadow banking

By Michael Flaherty and Howard Schneider

(Reuters) – U.S. financial regulators are struggling to
agree on how to tackle the huge network of lenders operating
outside of traditional banking channels, as worries grow that
the lack of oversight over this system is increasing systemic
risks.

While the Federal Reserve has vowed to ramp up its efforts
to rein in the risks posed by non-bank lenders, defining the
sector known as “shadow banks,” and forming a strategy to
regulate it continues to elude the central bank.

Mar 31, 2015

Fed’s Fischer floats shadow bank regulation framework

By Michael Flaherty and Howard Schneider

STONE MOUNTAIN, Ga. (Reuters) – A top U.S. Federal Reserve official on Monday suggested stress tests and certain capital requirements to contain the risks within the non-bank lending sector, while acknowledging there is little the central bank can do to impose such restrictions.

Fed Vice Chairman Stanley Fischer offered a framework to more tightly regulate the lending activities of hedge funds, mutual funds and other non-bank entities – often referred to as shadow banks – though he was careful to show that he was offering suggestions and not potential central bank rules.

Mar 30, 2015

U.S. Fed’s Fischer offers framework for regulating shadow banks

By Michael Flaherty and Howard Schneider

STONE MOUNTAIN, Ga. (Reuters) – A top U.S. Federal Reserve
official on Monday suggested stress tests and certain capital
requirements to contain the risks within the non-bank lending
sector, while acknowledging there is little the central bank can
do to impose such restrictions.

Fed Vice Chairman Stanley Fischer offered a framework to
more tightly regulate the lending activities of hedge funds,
mutual funds and other non-bank entities – often referred to as
shadow banks – though he was careful to show that he was
offering suggestions and not potential central bank rules.

Mar 27, 2015

Fed’s Yellen says rate hike may be warranted later this year

SAN FRANCISCO/WASHINGTON (Reuters) – An interest rate hike by the Federal Reserve may be warranted later this year, with a gradual path expected to follow, although a downturn in core inflation or wage growth could force it to hold off, the central bank’s chief said on Friday.

Fed Chair Janet Yellen said that after the first rate increase a further, gradual tightening in monetary policy will likely be warranted. If incoming data fails to support the Fed’s economic forecast, the path of policy will be adjusted, she said.

Mar 23, 2015

Fed expected to hike this year, but future path uncertain: Fischer

NEW YORK (Reuters) – The Federal Reserve is “widely expected” to begin raising interest rates this year though the path remains uncertain, with policymakers deciding subsequent policy moves on a meeting-by-meeting basis, a top Fed official said on Monday.

Stanley Fischer, the Fed’s second-in-command, appeared to lay the groundwork for a less predictable future of monetary policy, where economic data and unexpected geo-political risks could prompt the Fed to raise, or lower rates on the run.

    • 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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