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Inside Washington (12/02/2010)
* WASHINGTON (12/3/10)--Federal Deposit Insurance Corp. (FDIC) Chairman Sheila Bair said in an interview last month that the agency will renew efforts to insure new charters, with an emphasis on “traditional” banking,” rather than commercial real estate investments and brokered deposits. Bair’s comments, reported in American Banker’s Editor at Large column Dec. 2, indicating a change in direction by the FDIC, which has approved just two banks for deposit insurance this year. Just nine charters were approved in 2009, a drop from 101 in 2008. Bair indicated the FDIC may not have been as cautious as it should have been in approving charters before the financial crisis. Going forward, she said the agency will look for banks with solid core deposits, diversified business plans and qualified management. In another interview, Christopher Spoth, senior deputy director in the FDIC’s division of supervision and consumer protection, echoed Bair’s thoughts when he said the agency would encourage traditional community bank proposals that focus on lending to local small businesses, and gathering deposits from the community. * WASHINGTON (12/3/10)--What con artists do best is trick consumers into parting with money or divulging personal information that can be used to commit fraud. To help test people's knowledge about financial scams, the Fall 2010 issue of FDIC Consumer News, published by the Federal Deposit Insurance Corp., features a quiz on common frauds and their warning signs. Other timely articles discuss FDIC insurance coverage, solutions to mortgage and other debt problems, “credit protection” offers, student loans, ways to save money at tax time, and automated overdraft payment programs. The Fall 2010 edition can be read or printed at FDIC Consumer News, or to find current and past issues of FDIC Consumer News, or request paper copies by contacting the FDIC's Public Information Center toll-free at 1-877-275-3342, or publicinfo@fdic.gov, or by writing to the FDIC Public Information Center, 3501 North Fairfax Drive, Room E-1002, Arlington, VA 22226. * WASHINGTON (12/3/10)--The Federal Reserve Board on Wednesday posted detailed information on its public website about more than 21,000 individual credit and other transactions conducted to stabilize markets during the recent financial crisis between December 2007 and July 2010 (American Banker Dec. 2).The disclosure was required by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Many of the transactions, conducted through a variety of broad-based lending facilities, provided liquidity to financial institutions and markets through fully secured, mostly short-term loans. Financial institutions of all sizes looked to the Fed for during the height of the financial crisis. For example, to sustain the mortgage and housing markets and lower longer-term interest rates, the Fed bought $1.25 trillion in agency-mortgage-backed securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae between January 2009 and March 2010. Financial firms taking part in this program included Barclays Capital, Merrill Lynch, PNB Paribas and Deutsche Bank Securities. The central bank also approved more than 4,000 transactions through its Term Auction Facility, with big bank such as Wells Fargo & Co., Chase Bank, and Bank of America Corp., taking part. Mid-size community banks Fifth Third Bank, Keybank and Sterling also participated in the program. * WASHINGTON (12/3/10)--Regulators will complete a study by mid-2011 to determine how much additional capital banks will have to hold under Basel III standards (American Banker Dec. 2). At a two-day meeting of the Basel Committee on Banking Supervision, regulators agreed to conduct the study to define how much extra systemically risky capital that banks would have to hold in addition to the capital and liquidity requirements under Basel III. The capital would be loss-absorbing even if the bank was in danger of failing. The committee gathered to finalize the Basel III rules, which were agreed upon in July by the committee’s oversight body, Central Bank Governors and Heads of Supervision. Leaders of the Group of 20 nations approved the Basel III rules at their annual summit in Seoul in last month. The final text of the rules will be published at the end 2010.


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