Upon Further Analysis

A blog covering public policy, financial markets, sports, and culture. All by someone who spent a career analyzing stuff. Please reach out if you want to know more!

News

• Key Takeaways from the Republic First Bank Failure
  Regulators closed Philadelphia-based Republic First Bank on April 26, 2024. Fulton Bank, NA assumed most of Republic First’s deposits and… Read more: Key Takeaways from the Republic First Bank Failure
• Do Higher Interest Rates Benefit banks?
  It’s practically an article of faith in some quarters that higher interest rates benefit banks. But is this really the… Read more: Do Higher Interest Rates Benefit banks?
• The 2024 Stress Test Scenarios
  The stress test scenarios don’t just ignore IRR, they reward it. As of December 31, 2023, Charles Schwab had unrealized losses on its investment portfolio of $21 billion, more than 50% of Tier 1 capital. BAC has unrealized losses of more than $100 billion, or more than 45% of Tier 1. The supposedly stressed rate scenarios would make these losses disappear. Most of the unrealized losses were in the HTM portfolios, so would not have an immediate capital impact, unless it was accompanied by a liquidity event. However, that’s exactly what happened with SVB, Signature, and First Republic. It’s as though the French defense ministry decided in 1946 to give that Maginot Line another try.
• The (Supposedly) Favored Status of Home Ownership
  An oft-repeated truism is that government grants special treatment to homeowners and favors the housing industry. Discussions of the “housing… Read more: The (Supposedly) Favored Status of Home Ownership
• The Chevron Deference and Banking Regulation
  The United States Supreme Court is considering overturning Chevron USA vs. Natural Resource Defense Council, a long-standing precedent that generally… Read more: The Chevron Deference and Banking Regulation