On February 23, 2017 House Financial Services Committee Chairman Rep. Jeb Hensarling (R-TX) and 33 GOP members of the Committee sent a letter to Federal Reserve Chair Janet Yellen requesting that the Fed “neither propose nor adopt any new rules until the U.S. Senate confirms a [Federal Reserve] Vice Chairman for Supervision.”  The letter is in response to Congressional testimony that Yellen gave on February 15, 2017 where she indicated that the Fed might be finalizing a proposal that “pertains to the stress tests and what it called the Stress Capital Buffer.”  

The House Financial Services Committee (“House Committee”) issued a report on February 28, 2017 calling into question the process by which the Financial Stability Oversight Council (FSOC) designates certain non-bank companies as "too big to fail.” Based on subpoenaed documents requested by the House Committee and the sworn testimony of Treasury Department officials, the report concludes that the FSOC is "inconsistent and arbitrary" in exercising its power to designate certain nonbank companies as systemically important. The report echoes criticisms made by government watchdogs and courts of the FSOC's transparency and its nonbank SIFI designation process.  

On February 24, 2017, the Bank for International Settlements (BIS) published a new set of responses to interpretation questions related to the Net Stable Funding Ratio (NSFR).[1] This release is a follow up to the initial FAQ published in July of 2016 and includes important guidance concerning the treatment of repo for purposes of calculating the ratio. The purpose of the NSFR to move banks to more stable sources of funding that are less vulnerable to shocks. Banks and financial institutions that rely on short-term financing have raised a number of concerns about the ratio’s treatment and weighting of repo and reverse repo transactions, with some even calling for repo to be exempt from the ratio altogether. The Basel Committee’s FAQ does not address all of these concerns. But the interpretations do provide valuable clarifications to some technical aspects the treatment of repo and securities finance transactions (SFT) for the purpose of calculating the ratio, including netting of repo and reverse repo and RSF factors applicable to secured funding transactions.[2]