A research analyst at the Office of Financial Research examined the challenges posed by the alternative standards of creditworthiness used to replace credit ratings following their elimination from federal financial regulation by the Dodd-Frank Act.
The FDIC Board of Directors proposed amending banking regulations related to permissible investment activities and the pledging of assets. The proposal would remove from the regulations references to external credit ratings and replace them with appropriate standards of creditworthiness.
The FDIC proposed amendments to international banking regulations that would replace references to credit ratings in the definition of "investment grade" with appropriate standards of creditworthiness. The proposed amendments were published in the Federal Register.
European Central Bank staff outlined the systemic risks of shadow banking and urged regulators to conduct additional analyses that employ an "activities-based approach."
Federal Reserve Board Governor Daniel K. Tarullo posed a series of questions on the risk of "runnable liabilities," a core issue raised by shadow banking.