Federal Reserve Board: H.2 Release for Week Ending April 15, 2017; H.4.1 Release (Balance Sheet) for Week Ending April 20, 2017; Two “Of Note” Items


Of Note:

Is the United States becoming a two nations: One side with the wealth and the expectation of the so-called American Dream, and the other side with precarious employment, dispair, and everlasting debt? A web article (h/t naked capitalism blog) says yes.

Lynn Parramore, “America Is Regressing into a Developing Nation for Most People.” (Parramore is a Sr. Research Analyst with the Institute for New Economic Thinking.) Parramore describes an observation of a book, The Vanishing Middle Class: Prejudice and Power in a Dual Economy, by Peter Temin, Professor Emeritus of Economics at MIT. Temin stated–

The richest large economy in the world, says Temin, is coming to have an economic and political structure more like a developing nation. We have entered a phase of regression, and one of the easiest ways to see it is in our infrastructure: our roads and bridges look more like those in Thailand or Venezuela than the Netherlands or Japan. But it goes far deeper than that, which is why Temin uses a famous economic model created to understand developing nations to describe how far inequality has progressed in the United States. The model is the work of West Indian economist W. Arthur Lewis, the only person of African descent to win a Nobel Prize in economics. For the first time, this model is applied with systematic precision to the U.S.

The result is profoundly disturbing.

In the Lewis model of a dual economy, much of the low-wage sector has little influence over public policy. Check. The high-income sector will keep wages down in the other sector to provide cheap labor for its businesses. Check. Social control is used to keep the low-wage sector from challenging the policies favored by the high-income sector. Mass incarceration – check. The primary goal of the richest members of the high-income sector is to lower taxes. Check. Social and economic mobility is low. Check.

In the developing countries Lewis studied, people try to move from the low-wage sector to the affluent sector by transplanting from rural areas to the city to get a job. Occasionally it works; often it doesn’t. Temin says that today in the U.S., the ticket out is education, which is difficult for two reasons: you have to spend money over a long period of time, and the FTE sector is making those expenditures more and more costly by defunding public schools and making policies that increase student debt burdens.

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Another eye-opening article was at Bloomberg, “A Quarter of Millennials who Live at Home Don’t Work–or Study

Key quote:  According to the report, The Changing Economics and Demographics of Young Adulthood: 1975–2016

Almost 9 in 10 young people who were living in their parents’ home a year ago are still living there today, making it the most stable living arrangement for young adults,” the report said. “In 2005, the majority of young people lived independently in their own household (either alone, with a spouse, or an unmarried partner), which was the predominant living arrangement in 35 states. By 2015—just a decade later—only six states had a majority of young people living independently.

Recall that the Great Recession was in 2008. And, in order to start a household, one needs a secure job and a sufficient wage to support this activity.


The Federal Reserve Board (Board) publishes a weekly digest of its activities on its website. The digest is called the H.2 Release and is published every Thursday. The release for the week ending April 15, 2017, is below.

H.2 Release–Actions of the Board, Its Staff, and the Federal Reserve Banks; Applications and Reports Received

Category Action Taken
Banks, Foreign Nordea Bank AB (publ), Stockholm, Sweden — to establish a branch in New York, New York.

-Approved, April 12, 2017

Enforcement The Baraboo Bancorporation, Inc., Baraboo, Wisconsin — written agreement issued April 30, 2013, terminated April 7, 2017.

-Announced, April 11, 2017

Federal Reserve Board: Balance Sheet (H.4.1 Release)

The Board publishes data of factors affecting reserve balances. The digest is called the H.4.1 Release, and they are published every Thursday (or the next business day if the publication date falls on a federal holiday). The release for April 20, 2017, is below.

[Note: The blog will cover the line titled “Total Factors Supplying Reserve Funds.”]

H.4.1 Release–Factors Affecting Reserve Balances

Total factors supplying reserve funds (as of April 19, 2017):  $4,525,602 (in millions of dollars). (On September 26, 2007, this amount was $900,473 (in millions of dollars)).

(See the release for further information.)

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Federal Reserve Board: H.2 Release for Week Ending April 8, 2017; H.4.1 Release (Balance Sheet) for Week Ending April 13, 2017; Three “Of Note” Items


Of Note:

(1) The PBS Newshour had a column by Jonathan Morduch and Rachel Schneider of the financial instability in the United States of America.

Morduch and Scheider published a book “The Financial Diaries: How American Families Cope in a World of Uncertainty,” and have a website.

(2) In a blurb by the Reuters, “U.S. job openings rise to seven-month high in February,” There is a questionable quote by Chris Rupkey, an economist with MUFG Union Bank in New York:

Hiring, however, slipped to 5.3 million from 5.4 million in January. The hiring rate dipped to 3.6 percent from 3.7 percent the prior month. “It shows you that there is one of the most gigantic skills mismatches out there across the country that we have ever seen in history.

Perhaps, too, there were a lot of fake job ads, that is job postings that employers did not plan to fill. These type of economists never fail to discourage those out of work. If they were so smart, why did they not predict the economic meltdown in 2008?

The handless facepalm

(3) Washington Post Op-Ed: “Black college graduates are losing wealth. Here’s what can help,” by Ray Boshara (Ray Boshara is the director of the St. Louis Fed’s Center for Household Financial Stability and a senior fellow in the Aspen Institute’s Financial Security Program. The views in the op-ed are his own.)

“Finally, the shared experience of historical and ongoing discrimination remains a significant factor. Here my colleagues William Emmons and Lowell Ricketts challenge the standard but debatable “post-racial” economic model, under which the racial wealth gap exists because millions of white families made good financial choices while millions of similarly situated black families did not. But the black-white wealth gap is too large and persistent for equal opportunity and freedom of choice to be plausible.”


The Federal Reserve Board (Board) publishes a weekly digest of its activities on its website. The digest is called the H.2 Release and is published every Thursday. The release for the week ending April 8, 2017, is below.

H.2 Release–Actions of the Board, Its Staff, and the Federal Reserve Banks; Applications and Reports Received

Category Action Taken
Bank Holding Companies People’s United Financial, Inc., Bridgeport, Connecticut — commenter’s request for reconsideration of the Board’s approval of the application by People’s United Financial to acquire Suffolk Bancorp, Riverhead, New York, and thereby indirectly acquire The Suffolk County National Bank of Riverhead.

-Denied, April 6, 2017

 

United Bankshares, Inc., Charleston, West Virginia, and UBV Holding Company, LLC, Fairfax, Virginia — to acquire Cardinal Financial Corporation, McLean, and thereby indirectly acquire Cardinal Bank; and for United Bank, Fairfax, to merge with Cardinal Bank, McLean, and thereby establish branches.

-Approved, April 6, 2017

 

Forms Forms — initial Board review to extend without revision the Annual Daylight Overdraft Capital Report for U.S. Branches and Agencies of Foreign Banks (FR 2225).

-Proposed, April 3, 2017

 

Forms — final Board review to extend without revision the Registration of Mortgage Loan Originators (CFPB Reg G).

-Approved, April 5, 2017

 

Forms — initial Board review to extend with revision the reports for the Survey of Terms of Lending (to be renamed the Survey of Small Business and Farm Lending) (FR 2028B, FR 2028D, and FR 2028S).

-Proposed, April 6, 2017

 

Personnel Division of Information Technology — appointment of Raymond Romero, Lisa Bell, and Kofi Sapong as deputy directors.

-Announced, April 4, 2017

 

Regulations and Policies Office of Minority and Women Inclusion — 2016 annual report to Congress, in accordance with the Dodd-Frank Act.

-Announced, April 6, 2017

 

[Note: See blog post on this report.]

 

Enforcement Devon Bancorp, Inc., Chicago, Illinois — written agreement dated March 13, 2013, terminated April 4, 2017.

-Announced, April 6, 2017

 

Federal Reserve Board: Balance Sheet (H.4.1 Release)

The Board publishes data of factors affecting reserve balances. The digest is called the H.4.1 Release, and they are published every Thursday (or the next business day if the publication date falls on a federal holiday). The release for April 13, 2017, is below.

[Note: The blog will cover the line titled “Total Factors Supplying Reserve Funds.”]

H.4.1 Release–Factors Affecting Reserve Balances

Total factors supplying reserve funds (as of April 5, 2017):  $4,530,700 (in millions of dollars). (On September 26, 2007, this amount was $900,473 (in millions of dollars)).

(See the release for further information.)

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Federal Reserve Board: H.2 Release for Week Ending April 1, 2017; H.4.1 Release (Balance Sheet) for Week Ending April 6, 2017; Two “Of Note” Items


Of Note:

Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, who was going to retire in October 2017, resigned April 3, 2017 as a result of admitting that he confirmed confidential Federal Open Market Committee (FOMC) information to a Medley Global Advisors employee.

Additionally, Lacker was also in the laughter-filled FOMC meeting when the discussion involved talk of the unemployed people of the United States of America.

The blog posted an article on 2017 Report to the Congress on the Office of Minority and Women Inclusion.

Summary:  Long report, short on actual disclosure at what the Board is doing.


The Federal Reserve Board (Board) publishes a weekly digest of its activities on its website. The digest is called the H.2 Release and is published every Thursday. The release for the week ending April 1, 2017, is below.

H.2 Release–Actions of the Board, Its Staff, and the Federal Reserve Banks; Applications and Reports Received

Category Action Taken
Forms Forms — initial Board review to extend without revision the Recordkeeping and Disclosure Requirements Associated with Regulation R (FR 4025).

-Proposed, March 27, 2017

Enforcement HCSB Financial Corporation, Loris, South Carolina — written agreement issued May 9, 2011, terminated March 21, 2017.

-Announced, March 23, 2017

Santander Holdings USA, Inc., Boston, Massachusetts; and Santander Consumer USA Inc., Dallas, Texas — written agreement with the Federal Reserve Bank of Boston.

-Announced, March 23, 2017

Federal Reserve Board: Balance Sheet (H.4.1 Release)

The Board publishes data of factors affecting reserve balances. The digest is called the H.4.1 Release, and they are published every Thursday (or the next business day if the publication date falls on a federal holiday). The release for April 6, 2017, is below.

[Note: The blog will cover the line titled “Total Factors Supplying Reserve Funds.”]

H.4.1 Release–Factors Affecting Reserve Balances

Total factors supplying reserve funds (as of April 5, 2017):  $4,520,794 (in millions of dollars). (On September 26, 2007, this amount was $900,473 (in millions of dollars)).

(See the release for further information.)

Federal Reserve Board: Board Issued 2017 Office of Minority and Women Inclusion Report. Slightly More Clarifying Information Included; Potential Improvement Obscured by Lack of Explanation

In March 2017, the Federal Reserve Board (Board) posted the 2017 version of its Office of Minority and Women Inclusion (OMWI). As discussed previously in this blog, there had been some attention in inclusion issues by the Congress and the Board’s Office of Inspector General (IG). The blog had covered these developments, and also a former long-running case (not mentioned by the OMWI report), Artis v. Greenspan Bernanke Yellen.

Overall, with this report, the reader is made to feel skeptical of all Board activities, even if true progress is being made. More explanation of the programs being performed with the money of United States citizens, and the elimination of obscurity,  is expected and required.


Federal Reserve Board, Office of Minority and Women Inclusion,
Reports to Congress

(Preface language for report submitted in 2015.) “Pursuant to section 342(e) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), the Office of Diversity and Inclusion (ODI) of the Board of Governors of the Federal Reserve System must submit an annual report to the Congress outlining the activities, successes, and challenges of the office. This is the office’s report for calendar year 2014. Sheila Clark serves as the director of ODI.”

Year Link
2012 http://www.federalreserve.gov/publications/minority-women-inclusion/2012-omwi-preface.htm
2013 http://www.federalreserve.gov/publications/minority-women-inclusion/2013-omwi-preface.htm
2014 http://www.federalreserve.gov/publications/minority-women-inclusion/2014-omwi-preface.htm
2015 http://www.federalreserve.gov/publications/minority-women-inclusion/2015-omwi-preface.htm
2016 http://www.federalreserve.gov/publications/minority-women-inclusion/files/omwi-report-20160331.pdf
2017 https://www.federalreserve.gov/publications/files/omwi-report-20170331.pdf

2014-03-04-auerbach
Sheila Clark’s letter to the EEOC (printed in the Auerbach book, page 123).

In reading the 2017 OMWI report, the report has essentially the same content and structure as in 2016; however, there were some additions. The additions are concerning as they allow worrying questions about the Board’s seriousness to this important issue, given its history in this area.

  • The creation of a Diversity and Inclusion Strategic Plan. (The document seems like a condensed OMWI Report. The issue is the obscurity of Board actions, which is worrisome and makes an observer doubt the organization’s sincerity in improving its failings.)
  • Divisions provide the Board’s Office of Diversity and Inclusion with periodic reports through a Diversity and Inclusion Scorecard. (Again, a description of this scorecard is not in the report, leading to concern about sincerity.)
  • The positions filled in 2015 and 2016 evidence a somewhat similar rate of new hires, 17.1 percent and 16.2 percent, respectively. (See chart below.) The numbers suggest somewhat consistent turnover, leading to the possibility of the existence of a “rank-and-yank” system.
  • The addition of courses to its core professional development curriculum–
    • “Unconscious Bias”
    • “Generational Differences”
    • “Inclusive Leadership.”

(It is unclear whether these courses are merely offered or are required for employees to attend. And, what will be ODI’s oversight responsibility to make sure things stay on track or that the courses prove effective? Again, there is nothing mentioned in the report.)

  • In 2016, the Board created targeted strategies to address low participation of African Americans and Hispanics in research positions. (Unclear what these strategies are.)
  • In April 2016, there was a creation of a Diversity and Economic Inclusion Initiative and a creation of a workgroup, of which the OMWI Director is a member. (The report did not provide any description of these programs.)
Board Hiring and Promotions, 2015 and 2016
2015 2016
Positions filled 576 576
Interns 118 127
Positions filled w/ counting interns 458 449
Total number of Board employees 2673 2766
Percentage (new non-intern hires over total number of employees) 17.1% 16.2%

Given the issues presented by the IG previously and with the long running time of the now-ended Artis v. Greenspan Bernanke Yellen case, the Board’s activities with regard to diversity and inclusion continues to remain an issue of moderate to grave concern until demonstrable, sustained and consistent improvement is shown. Meetings, scorecards, and reports are a start, but insufficient compared to firm results.

In addition, the Board’s use of rank and yank undermines and destroys all efforts described in this post. The fourth full paragraph, left column on page 7 was used in previous years. [Note: The blog had identified that rank and yank is potentially being used at the Board.]

rank_yank
Artist: Michael Sloan

In all the tables in the “Equal Employment of Minorities and Women,” the delineation of non-minority and minority is obscure, specifically the minority category. Such obscurity can hide issues with specific subgroups under the umbrella of minority.

 

Federal Reserve Board: President of Richmond Fed Admits to Confirming Confidential FOMC Information to a Reporter, Resigns

This blog has covered a leak to Medley Global Advisors, which had occurred with Federal Open Market Committee (FOMC) information. According to Reuters, the person claiming to be responsible for the leak was a member of the FOMC, Jeffrey Lacker, president of the Federal Reserve Bank of Richmond. He has resigned on April 4, 2017.  (He had planned to retire in October 2017.)

Lacker has come up in another story of the blog, the story of laughter at the vulnerable at FOMC meetings in 2011. (Lacker did not seem to participate in the laughter.)

That the Fed’s Office of Inspector General did not uncover this information shows again the fraility of an non-independent inspector general. As stated in a previous blog post–

“In addition, the leak situation demonstrates the weak position of the IG. Sadly, the Board’s IG is akin to a toothless tiger.

  • The Board selects its [Inspector General] IG. The IG is not nominated by the President and approved by the U.S. Senate. Thus, an immediate conflict of interest and lack of independence is created.
  • Further, the IG submits a budget to the Board for its approval (See Board Annual Report, 2013, page 314 (paragraph 3)). Again, the IG instantly is subservient to the head of the agency. As a result, the IG cannot function.”

Federal Reserve Board: H.2 Release for Week Ending March 25, 2017; H.4.1 Release (Balance Sheet) for Week Ending March 30, 2017; Three “Of Note” Items


Of Note

According to a Reuters report, The Federal Reserve could gradually wind down its balance sheet, N.Y. Fed President, William Dudley said.

(Update on the Fed’s $4.5 billion balance sheet is below.)

Chair Janet Yellen gave a speech entitled “Addressing Workforce Development Challenges in Low-Income Communities,” at “Creating a Just Economy,” the 2017 annual conference of the National Community Reinvestment Coalition, Washington, D.C.

Comment:  The Chair encouraged entrepreneurship in workforce development, but also observed that capital for such small businesses is hard to find because of factors like “[a] lack of a credit history or a poor credit history and limited collateral–for example, home equity.”

The two observations cancel each other out. [I cannot help be a bit disappointed with the presentation of this unworkable idea–a possible sign of Fed disinterest. If you must encourage Congressional to act (with research and practical, real-world findings), do so, Chair Yellen, rather than give out discouragement.]

United States (population: 308,745,538) (2010 Census)

Race

Percentage of population

Number

White

72.4

223,553,265

Black

12.6

38,929,319

Native American

0.7

540,013

Asian

4.8

14,674,252

The Board published its 2017 Report to the Congress on the Office of Minority and Women Inclusion. (Note: This blog will prepare and post a synopsis of this report in the near future.)


The Federal Reserve Board (Board) publishes a weekly digest of its activities on its website. The digest is called the H.2 Release and is published every Thursday. The release for the week ending March 25, 2017, is below.

H.2 Release–Actions of the Board, Its Staff, and the Federal Reserve Banks; Applications and Reports Received

Category Action Taken
Personnel Division of Monetary Affairs — appointment of Laura Lipscomb as assistant director and Edward Nelson as senior adviser.

-Announced, March 21, 2017

 

Management Division — appointment of Winona Varnon as deputy director and David Capp as senior adviser.

-Approved, March 22, 2017

 

Supervision and Regulation Resolution Plans — joint Board and Federal Deposit Insurance Corporation guidance on the resolution planning requirements of the Dodd-Frank Act for four foreign banking organizations (FBOs) (Barclays PLC, Credit Suisse Group AG, Deutsche Bank AG, and UBS AG); and extension to July 1, 2018, of the FBOs’ 2016 and 2017 resolution plan submission dates.

-Approved, March 22, 2017

 

Resolution Plans — joint Board and Federal Deposit Insurance Corporation feedback on the December 2015 resolution plans of 16 domestic banking organizations; and instructions and guidance for the development of the firms’ December 2017 resolution plans, in accordance with the Dodd-Frank Act.

-Approved, March 22, 2017

 

Enforcement HCSB Financial Corporation, Loris, South Carolina — written agreement issued May 9, 2011, terminated March 21, 2017.

-Announced, March 23, 2017

 

Santander Holdings USA, Inc., Boston, Massachusetts; and Santander Consumer USA Inc., Dallas, Texas — written agreement with the Federal Reserve Bank of Boston.

-Announced, March 23, 2017

 

Federal Reserve Board: Balance Sheet (H.4.1 Release)

The Board publishes data of factors affecting reserve balances. The digest is called the H.4.1 Release, and they are published every Thursday (or the next business day if the publication date falls on a federal holiday). The release for March 30, 2017, is below.

[Note: The blog will cover the line titled “Total Factors Supplying Reserve Funds.”]

H.4.1 Release–Factors Affecting Reserve Balances

Total factors supplying reserve funds (as of March 29, 2017):  $4,515,652 (in millions of dollars). (On September 26, 2007, this amount was $900,473 (in millions of dollars)).

(See the release for further information.)