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The MReport Webcast: Thursday 6/16/2016

In its annual report to Congress, the FHFA published the results of Dodd-Frank stress tests that assess what would be the impact of immediate financial shocks and nine quarters of adverse economic conditions on capital levels among institutions with at least 10 billion dollars in assets. So what’s the verdict? Federal Home Loan Banks came through sparkling, but the GSEs, not so much.

 

According to FHFA, all 11 of the FHL banks maintained compliance with regulatory capital and leverage capital requirements over the nine quarters of the stress test, with the banks of San Francisco and Seattle projecting assets well above regulatory minimums. Fannie Mae and Freddie Mac each projected draws from the U.S. Treasury Department to the tune of billions. In the Severely Adverse scenario, Fannie Mae projected additional of between 34 point 2 billion dollars and 94 point 9 billion dollars.

 

The Federal Open Market Committee once again stood still on raising the federal funds rate this month due to disappointing economic indicators, leaving the looming question of when the Fed will make its move. The Fed said quote In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its objectives of maximum employment and 2 percent inflation close quote.

About Author: Seth Welborn

Seth Welborn is a Harding University graduate with a degree in English and a minor in writing. He is a contributing writer for MReport. An East Texas Native, he has studied abroad in Athens, Greece and works part-time as a photographer.
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