The FDIC’s Chief Risk Officer has released a postmortem report of the First Republic bank failure.  A close reading of the report indicates that supervisors largely overlooked weaknesses in interest rate risk and liquidity risk management at First Republic.  The FDIC’s supervision of First Republic appears to be a classic case of the halo effect,…

Current capital rules for U.S. Banks require only the largest and most complex banks to include accumulated other comprehensive income (AOCI) in regulatory capital.  Proposed new rules would extend this requirement to all banks over $100 billion in assets.  Much of the discussion on the proposed rules has focused on unrealized losses on available-for-sale (AFS)…