Read the latest articles and press releases about securitization and structured finance.

Industry News

Decline in American’s Economic Well-Being in 2022, According to Fed Report

On May 22, the Federal Reserve released its Economic Well-Being of U.S. Households in 2022. The report, revealed a decline in people’s financial well-being over the past year, to its lowest level since 2016. Out of over 11,000 respondents, 73% reported feeling “at least okay” financially in 2022, marking a 5% decline from 2021, while the percentage of adults who said they were “worse off” financially than the year before rose to 35% -- the highest level since 2014. The article notes that inflation, alongside rising interest rates, could be to blame for decreased economic security in survey respondents.

Industry News

Debt Ceiling Resolution Could Bring Further Challenges for U.S. Banks

While a resolution to the debt ceiling gridlock would allow the U.S. Treasury to raise funds to meet its financial obligations, it could increase competition for bank deposits. Banks have been under pressure due to increased interest rates and an outflow of deposits to money-market funds.

Industry News

CLO Returns Underperforming in 2023, New Issuance Declines

According to an article published by Bloomberg, collateralized loan obligation (CLO) market is facing rising funding costs and lower returns on investments. This has reduced CLO profitability and resulted in a decline in new CLO issuance, with volume falling 12% in Q1 2023 compared to the same period in 2022.

Industry News

Credit Card Balances Increased in Q1 2023

The Federal Reserve Bank of New York’s quarterly report on household debt underlined an increase in consumer credit card borrowing. Credit card balances surged to nearly $1 trillion by the end of the quarter, representing a 17% increase from the previous year's $840 billion.

Industry News

S&P Webinars on Methodology for Insurer’s Risk Based Capital

S&P Global released a new proposed methodology for Insurer’s Risk-Based Capital, in line with SFA’s previous response to their initially proposed methodology in April, 2022. S&P is offering a webinar to provide an overview of the new proposal on May 16. Additionally, SFA will host a members-only webinar with S&P to discuss the new proposal in the coming weeks.

Industry News

Fed Increases Interest Rates by a Quarter Point

On May 3, The Federal Reserve announced the decision to raise interest rates a quarter point to a range of 5-5.25%, the highest rate since 2007. During Wednesday’s press conference, Fed Chairman Jerome Powell alluded to a potential pause in interest rate increases, contingent on ensuing data, while furthermore stressing the Fed’s commitment to lowering inflation to their ultimate goal of 2%.

Industry News

Fannie Mae’s Economic and Strategic Group Releases April Outlook

On April 21, Fannie Mae’s Economic and Strategic (ESR) Group released their April Outlook, which predicted stronger first quarter GDP growth than previously anticipated. Housing demand and home prices had remained consistent in 2022, largely due to inventory pressures in the housing market.

Industry News

Study Finds that Few US Banks Hedged Interest Rates in 2022

A recent research study in the Social Science Research Network found that only 6% of total bank assets were hedged against interest rate risk and the use of hedging actually declined in 2022, even as rates rose. In the case of Silicon Valley Bank, the protective hedging of their securities portfolio declined from about 12% in 2021 to only 0.4% in 2022.

Industry News

Dept. of Labor Adjusts Unemployment Calculations for a Cooling Labor Market

Beginning with the April 7 release, the Department of Labor’s (DOL) calculation for initial jobless claims, which is used as a proxy for layoffs, reverts to multiplicative seasonal adjustment models. This pre-Covid methodology resulted in a revision of March’s weekly average of claims up from the 198,250 claims previously reported to 237,750 which is close to the 2019 pre-pandemic average of 220,000.

Industry News

Consumers Express Future Economic Confidence Despite Current Conditions

The Conference Board’s survey, the Consumer Confidence Index, was unexpectedly higher in March, 104.2 when economists predicted 101.0, despite banking turmoil and expectations of recession.

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