U.S. bank and thrift regulators eliminate "high-risk" CMO constraints

The federal depository institution regulators, under the auspices of the Federal Financial Institutions Examination Council, have published a final, "Supervisory Policy Statement on Investment Securities and End-User Derivatives Activities" that eliminates the constraints placed on investi...

Full description

Saved in:
Bibliographic Details
Published in:The securitization conduit 1998-10, Vol.1 (3), p.14
Main Author: Taddei, Andrew J
Format: Article
Language:English
Subjects:
Boards of directors
Collateralized mortgage obligations
Derivatives
Financial institutions
Investment banking
Investment policy
Money market instruments
Portfolio performance
Prepayments
Regulation
Regulation of financial institutions
Risk management
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:The federal depository institution regulators, under the auspices of the Federal Financial Institutions Examination Council, have published a final, "Supervisory Policy Statement on Investment Securities and End-User Derivatives Activities" that eliminates the constraints placed on investing in high-risk mortgage derivative products as determined by the FFIEC stress tests. Published on April 23, 1998, the Statement was effective on May 26, 1998. It focuses on the most basic of sound practices for institutions - understanding the risks related to investment securities and end-user derivatives activities. This means there will be a renewed emphasis on the ability of depository institutions to demonstrate to regulators through analysis, their ability to effectively identify, measure, monitor and control the risks of all their investment activities in the context of the institution's overall business strategies.
ISSN:1098-2957