Under the current administration, U.S. regulators have rolled back climate-related oversight and initiatives adopted from 2021 to 2023. However, Fitch Ratings continues to view climate-related events as relevant risks that warrant consideration in bank risk assessments and our credit analysis. Learn more: https://gag.gl/r6QY2K #Banks #Insurance #USPF

Under the current administration, U.S. regulators have rolled back climate-related oversight and initiatives adopted from 2021 to 2023. However, Fitch Ratings continues to view climate-related events as relevant risks that warrant consideration in bank risk assessments and our credit analysis. Learn more: https://ow.ly/gnEn50X85tR #Banks #Insurance #USPF

Regulators are doing away with controversial rules that required banks to plan for losses in the event of climate-related events, according to an announcement Thursday. A joint release from the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency and the Federal Reserve said they no longer believe the requirements are necessary as they are redundant with other provisions banks make to plan for emergencies and unusual events. "The agencies do not believe principles for managing climate-related financial risk are necessary because the agencies' existing safety and soundness standards require all supervised institutions to have effective risk management commensurate with their size, complexity, and activities," a joint release from the three regulators said.

US banking regulators Federal Reserve Board, Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) rescind climate-related financial risk management principles for large banks. Read more: https://lnkd.in/gV2--FZy #BankingRegulation #ClimateRisk #FinancialStability #USBanks #ESG

One of the main positives to come out of the Global Financial Crisis was the introduction of stress testing as a key tool for regulators to improve the resilience of banks to capital and liquidity shocks. For most banks it was how their loan portfolios responded to the prescribed stress test scenarios that in effect became the binding constraint on bank capital. Unsurprisingly, this has meant that the exact form these stress tests takes has become highly important to the banks subject to it. So I am not surprised that in the litigious US the large banks have taken legal action against the Federal Reserve challenging various aspects of the CCAR process. It is in this turbulent context that this recent speech by Michael Barr is very interesting as regulators look to keep stress testing relevant. Whilst US centric in nature it is a speech worth reading for anyone genuinely interested in the important subject of stress testing, especially capital stress testing. #stresstesting #capitalplanning #pillar2B #CCAR #PRA

Private Credit Is Drawing Caution, Confidence for Insurers Two major institutions are reading the same market trend in very different ways. In new reports this week, the International Monetary Fund warns that “banks and insurers are deepening ties with the private-credit ecosystem,” calling it a structural shift that could “reshape risk transmission channels in ways that remain imperfectly understood.” Meanwhile, S&P Global sees the same expansion as manageable: “Private credit is a growing component of insurance company portfolios in North America,” but so far, “our ratings on insurers have not been affected … the added risks are well managed.” 🔗 Read the full analysis https://lnkd.in/eWqvFXE7 #PrivateCredit #Insurance #Reinsurance #RiskModeling #FixedIncome #InstitutionalInvesting

Fitch Ratings flags private credit as a potential channel for systemic risk amid its rapid growth and rising complexity. While not yet a threat, the sector could amplify and spread an economic shock across pension funds, banks, insurers and retail investors alike. Read more: https://lnkd.in/ed-gxnmr

Retaining existing IRAC norms. Prudential floor for the Expected Credit Loss ( ECL) Model. Suitable glide-path and non -disruptive implementation. RBI appears to be doing all it can (and more) to cushion the impact on banks and financial institutions of providing for impairment of assets as per Ind AS 109. The treasury numbers could still be impacted due to fair valuation but it looks like banks will have the financial muscle to bear the impact of a full-blown transition to Ind AS. #RBI #ECLmodel #ImpairmentofAssets #IndASImplementation #Prudentialnorms