Federal Reserve Board: H.2 Release for Week Ending April 15, 2017; H.4.1 Release (Balance Sheet) for Week Ending April 13, 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.)

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: Laughing at the Vulnerable is Cruel, Inhuman–Callous; FOMC 5-Year Meeting-Transcript-Release Sched is Being Abused

To whom great independence is granted, an extreme level of accountability and responsibility is required. The Federal Reserve Board (Board) and the Federal Open Market Committee (FOMC) has failed miserably with managing its service to citizens. Reform of the Board is needed immediately; FOMC transcripts must be released much earlier than five years.

The Board is an opaque, insular federal agency. The constant calls for “independence” and for secrecy of FOMC meetings make me suspicious.


Author’s note: I have covered other aspects of the Board’s inhuman spirit and cruelty in other posts–for example, the now-closed case of Artis v. Greenspan Bernanke Yellen. That this attitude would spill over into its policy work (or inform of its treatment of certain employees at the Board) is thus not surprising, but, at the same time, it is deeply hurtful.

In addition, the revelation that economists are indifferent to human beings serves as a confirmation point for previous posts.


Rightly so, it seems. An article by Matthew Stoller of the Intercept, demonstrating the utter lack of conscience against vulnerable citizens–those suffering unemployment as a result of the Great Recession–shows the corrosive effect of extreme secrecy and a total lack of accountability at the high levels of the Board and the FOMC. The reform proposals being considered must be given immediate attention.


[The current chair of the Board, Janet Yellen, was at the FOMC meetings mentioned in Stoller’s article.]


Only the comfortable can afford to laugh at those who suffered financial stress. The following quote comes from transcripts of the Nov. 1-2, 2011, FOMC meeting. That the laughter and joy at other people’s suffering comes from high-level public-service policymakers is galling.

“I frequently hear of jobs going unfilled because a large number of applicants have difficulty passing basic requirements like drug tests or simply demonstrating the requisite work ethic,” said Dennis Lockhart, a former Citibank executive who ran the Atlanta Federal Reserve Bank. “One contact in the staffing industry told us that during their pretesting process, a majority—actually, 60 percent of applicants—failed to answer ‘0’ to the question of how many days a week it’s acceptable to miss work.”

The room of central bankers then broke into laughter.”

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At an April 2011 FOMC meeting, the president of the Richmond Federal Reserve Bank, Jeff Lacker, had the following to say about vulnerable people in West Virginia–within his own jurisdiction–at least he tried to stifle the laughs (although his statements were similarly shallow, and lacked depth–he did not go the unemployment office to speak with the unemployed directly (!)):

In an April meeting that year, Richmond Federal Reserve President Jeff Lacker told participants that “Several firms told us of difficulty finding adequate workers, because they preferred to collect unemployment benefits or can’t pass drug tests.” He reiterated that point in November, saying that in West Virginia he was told by an employment agency that “unquestionably the biggest problem in hiring skilled and unskilled workers was the inability to pass a drug test.”

Lacker’s Federal Reserve district includes West Virginia. In August, he again spoke of “widespread reports about hard drug use, OxyContin and methamphetamine, in Appalachia and other rural parts of our District—in particular, Appalachia.”

Apparently his colleagues responded with laughter again, because he then said “Drug abuse and the hardship involved in unemployment aren’t really laughing matters.” Usage, he noted, isn’t higher than the national norm in West Virginia. “It’s hard to pin this down quantitatively,” he continued, wondering if there was “something meaningful there as a contributor to impediments to labor market functioning.”


Note: The New York Fed published a paper in 2014, which justified the end of extended long-term unemployment benefits. Stoller’s article gives context to the paper’s approach toward the unemployed.


The President and Congress must take action to correct the errors going on at the Board and FOMC that the management there seem unwilling to address with “their friends.”

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Federal Reserve Board: H.2 Release for Week Ending September 10, 2016; H.4.1 Release (Balance Sheet) for Week Ending September 15, 2016

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 September 10, 2016, 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 Consumer and Community Affairs — appointment of V. Nicole Bynum as deputy director.

-Approved, August 31, 2016

(A/C)

Regulations and Policies Activities and Investments of Banking Entities — interagency report, with recommendations, to Congress and the Financial Stability Oversight Council concerning activities and investments of supervised banking entities, in accordance with the Dodd-Frank Act.

-Announced, September 8, 2016

Countercyclical Capital Buffer — final policy statement describing the framework the Board will follow in setting the countercyclical capital buffer for U.S.-based credit exposures.

-Approved, September 6, 2016

 

Enforcement FirstFed Bancorp, Inc. Employee Stock Ownership Plan, Bessemer, Alabama, and FirstFed Bancorp, Inc. — written agreement dated June 27, 2011, terminated September 1, 2016.

-Announced, September 6, 2016

 

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 September 15, 2016, 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 September 14, 2016):  $4,527,086 (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: H.2 Release for Week Ending June 18, 2016; H.4.1 Release (Balance Sheet) for Week Ending June 23, 2016

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 June 18, 2016, is below.

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

Category Action Taken
Bank Branches, Domestic Compass Bank, Birmingham, Alabama — to establish a branch at 5900 Quebec Street, Fort Worth, Texas.

-Approved, June 16, 2016

 

Forms Forms — final Board review to extend without revision the Consumer Satisfaction Questionnaire (FR 1379), Notice of Branch Closure (FR 4031), and Survey to Obtain Information on the Relevant Market in Individual Merger Cases (FR 2060).

-Approved, June 16, 2016

 

Personnel Office of the Chief Data Officer — appointment of Phillip Daher as assistant director.

-Approved, June 15, 2016

Office of the Secretary — appointment of Yao-Chin Chao as assistant secretary.

-Approved, June 15, 2016

Regulations and Policies Accounting Standard — interagency statement on a new accounting standard, issued by the Financial Accounting Standards Board, about credit losses on financial instruments.

-Announced, June 17, 2016

Host State Lending Ratios — interagency release of the host state loan-to-deposit ratios used by the banking agencies to determine compliance with the Riegle-Neal Interstate Banking and Branching Efficiency Act.

-Announced, June 17, 2016

Enforcement Affinity Financial Corporation, Newport Beach, California; and Waterfield Financial Services, Inc. (now known as Affinity Financial Centers, Inc.), Indianapolis, Indiana — issuance of a consent cease and desist order.

-Approved, June 5, 2016 (A/C)

First National Bancshares, Inc., Goodland, Kansas — written agreement dated September 10, 2009, terminated June 7, 2016.

-Announced, June 14, 2016

 

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 June 23, 2016, 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 June 22, 2016):  $4,527,770 (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: H.2 Release for Week Ending March 12, 2016; Dems Request Update to 2013 GAO Study on Diversity in Financial Services Agencies and Industry

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 12, 2016, 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 Funding and Liquidity Risk Management Guidance (FR 4198) and Recordkeeping Provisions Associated with Guidance on Leveraged Lending (FR 4203).

-Proposed, March 9, 2016

 

Forms — initial Board review to extend without revision the Reporting, Recordkeeping, and Disclosure Requirements Associated with Regulation NN (Reg NN).

-Proposed, March 10, 2016

 

 

 

 

 

Personnel Division of Banking Supervision and Regulation — appointment of Steve Spurry, Kathleen Johnson, and Joanne Wakim as assistant directors.

-Announced, March 7, 2016

Management Division — appointment of Steven A. Miranda as deputy director.

-Announced, March 9, 2016

 

Enforcement American Bank of Baxter Springs, Baxter Springs, Kansas — written agreement dated January 5, 2010, terminated March 4, 2016.

-Announced, March 8, 2016

 

CB Financial Corporation, Wilson, North Carolina — written agreement dated May 25, 2010, terminated March 3, 2016.

-Announced, March 8, 2016

 

Hazard Bancorp, Hazard, Kentucky, and Peoples Bank and Trust Company of Hazard — written agreement with the Federal Reserve Bank of Cleveland and the Commonwealth of Kentucky Department of Financial Institutions.

-Announced, March 8, 2016

 

 

 

Congressional Democrats Request Update to General Accountability Office’s 2013 Report on Diversity within the Financial Services Industry and Related Federal Agencies

On March 15, 2016, Ranking Member of the House Financial Services Committee, Rep. Maxine Waters (D-Calif.), Ranking Member of the Senate Banking Committee, Sen. Sherrod Brown (D-Ohio), and Ranking Member of the Investigations subcommittee of the House Financial Services Committee, Rep. Al Green (D-Tx.) requested that the General Accountability Office update its 2013 report “Diversity Management: Trends and Practices in the Financial Services Industry and Agencies after the Recent Financial Crisis” (released on May 16, 2013).

The Democrats stated that they were concerned about the slow pace of increasing diversity in the financial sector, as such diversity will help the industry to understand better all of the communities that it serves and to ensure that all consumers are treated fairly.

See also a report from the staff of the House Financial Services Committee (discussed previously in this blog).

 

Federal Financial Regulatory Agencies: Financial Services Democrats Receive Responses from Agencies; Seek Further Action and Commitment for Measurable Results

In a previous post, I discussed the publication of a report by the U.S. House of Representatives’ Democrats (Representative Maxine Waters (D-Calif.), Representative Al Green (D-Tx.), and members of the Tri-Caucus) on the diversity and inclusion issues within the federal financial agencies.

Agency Date submitted Link Comment
Consumer Financial Protection Bureau December 7, 2015 http://democrats.financialservices.house.gov/uploadedfiles/2015.18.25_diversity_report_and_reforms_agency_responses_final.pdf
Federal Deposit Insurance Corporation December 7, 2015
Federal Housing Finance Agency December 7, 2015
Federal Reserve Board November 25, 2015 and February 8, 2016 Detailed letter (Feb. 8, 2016) submitted 2 days before the Monetary Policy Report hearing (Feb. 10, 2016).
National Credit Union Administration December 7, 2015
Office of the Comptroller of the Currency December 8, 2015
Securities and Exchange Commission December 9, 2015

According to a press release issued on January 8, 2016, the Democrats received responses from the federal financial regulatory agencies. Waters and members of the Tri-Caucus appreciated the responses but seek further action to ensure demonstrated commitment and action on the part of these agencies.

Federal Financial Agency Report Number Internet Link Comment
Consumer Financial Protection Bureau Audit report 2015-MO-C-002 http://oig.federalreserve.gov/reports/cfpb-diversity-inclusion-mar2015.pdf American Banker article about racial disparities of CFPB staff evaluations.
Department of the Treasury, Office of the Comptroller of the Currency OIG-15-017 http://www.treasury.gov/about/organizational-structure/ig/Audit%20Reports%20and%20Testimonies/OIG-15-017.pdf
Federal Deposit Insurance Corporation Eval-15-001 http://www.fdicoig.gov/reports15/15-001EV.pdf
Federal Housing Finance Agency EVL-2015-003 http://fhfaoig.gov/Content/Files/EVL-2015-003.pdf
Federal Reserve Board Audit report 2015-MO-B-006 http://oig.federalreserve.gov/reports/board-diversity-inclusion-mar2015.pdf What is left out of the report is significant: Artis v. Bernanke (now Yellen). Also 12 U.S.C. 244 needs Congressional attention to ensure that Title 5 of the U.S. Code applies to the Board; the Board’s record-keeping on, and reporting of, its internal management is lax.
National Credit Union Administration OIG-14-09 http://www.ncua.gov/about/Leadership/CO/OIG/Documents/OIG201409EqualOpportunityDiversity.pdf Click for blog post on this report
Securities and Exchange Commission 528 http://www.sec.gov/oig/reportspubs/528.pdf Report is thorough, thoughtful, and well done.

In particular, Chair Janet Yellen stated in the Fed’s letter that the Fed had already begun acting on recommendations from its Inspector General.

[Note: Key issues to monitor PMR monitoring, discussions with OMWI director. Responses to these recommendations were opaque.]

Author’s note: Other posts relating to the Federal Reserve Board on this issue follow.

https://alexwdc.wordpress.com/2015/11/27/federal-reserve-board-h-2-release-for-week-ending-november-21-2015-a-brief-comment-on-diversity-practices-of-the-board/

https://alexwdc.wordpress.com/2015/11/13/federal-reserve-board-h-2-release-for-week-ending-november-7-2015-background-on-the-boards-omwi-program/

https://alexwdc.wordpress.com/2015/12/11/federal-reserve-board-walter-t-charlton-counsel-for-cynthia-artis-artis-v-bernanke-on-c-span-in-2002-a-note-onjohn-roberts-and-antonin-scalia/

https://alexwdc.wordpress.com/2015/10/29/federal-reserve-board-h-2-release-for-week-ending-october-24-2015-boards-ig-identifies-major-management-challenges/

https://alexwdc.wordpress.com/2015/07/22/federal-reserve-board-long-running-employment-discrimination-case-artis-v-bernanke-yellen-dismissed-with-prejudice-length-of-case-offends-conscience/

https://alexwdc.wordpress.com/2016/02/11/federal-reserve-board-legal-cases-against-the-board-2/