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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.

Mar 19, 2015

Fed urges lawmakers to toughen rules on Wall St. and commodities

WASHINGTON/NEW YORK (Reuters) – U.S. lawmakers should consider overturning a decades-old rule that allows Morgan Stanley and Goldman Sachs to extract, transport and trade physical commodities, a top Federal Reserve official said on Thursday.

Asked at a Senate Banking Committee hearing on bank regulation what rules could be strengthened, Fed Governor Daniel Tarullo said one target was the commodities exemption the two banks enjoy, which allows them to handle everything from crude oil cargoes and copper pallets to electricity lines and aluminum stockpiles.

Mar 19, 2015

Fed opens door wider for rate hike but downgrades economic outlook

WASHINGTON (Reuters) – The Federal Reserve on Wednesday moved a step closer to hiking rates for the first time since 2006, but downgraded its economic growth and inflation projections, signaling it is in no rush to push borrowing costs to more normal levels.

The U.S. central bank removed a reference to being “patient” on rates from its policy statement, opening the door wider for a hike in the next couple of months while sounding a cautious note on the health of the economic recovery.

Mar 18, 2015

Fed opens door for rate hike even as it downgrades economic outlook

WASHINGTON, March 18 (Reuters) – The Federal Reserve on
Wednesday moved a step closer to a much anticipated first rate
hike since 2006 by removing “patient” from its language,
although markets bet on a September hike after it downgraded the
expected pace of growth and inflation.

Stock markets rallied after the Fed statement, while the
U.S. 10-year Treasury yield dipped below 2 percent for the first
time since March 2 and the euro rose against the dollar on the
more dovish forecasts that appeared to argue against a June
move.

Mar 18, 2015

Fed opens door further for June interest rate hike

WASHINGTON (Reuters) – The Federal Reserve on Wednesday moved a step closer to a much anticipated first rate hike since 2006 by removing “patient” from its language, although markets bet on a September hike after it downgraded the expected pace of growth and inflation.

Stock markets rallied after the Fed statement, while the U.S. 10-year Treasury yield dipped below 2 percent for the first time since March 2 and the euro rose against the dollar on the more dovish forecasts that appeared to argue against a June move.

    • 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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