Overview
Title
Proposed Agency Information Collection Activities; Comment Request
Agencies
ELI5 AI
The Federal Reserve System wants to keep checking big banks on their use of a special kind of financial trade, called derivatives, for three more years without changing how they do it. They are asking people to tell them if this is helpful or if it makes too much work for the banks, and anyone can send in their thoughts about this by February 21, 2025.
Summary AI
The Board of Governors of the Federal Reserve System is seeking public comments on a proposal to extend the Semiannual Report of Derivatives Activity for three years without making any changes. This report collects data from eight major U.S. dealers of over-the-counter derivatives to understand global financial derivatives markets better. The proposal asks for feedback on various aspects, such as the necessity and effectiveness of the information collection and how to reduce the burden on respondents. Comments must be submitted by February 21, 2025, and can be sent through the Federal Reserve's website or by mail.
Abstract
The Board of Governors of the Federal Reserve System (Board) invites comment on a proposal to extend for three years, without revision, the Semiannual Report of Derivatives Activity (FR 2436; OMB No. 7100-0286).
Keywords AI
Sources
AnalysisAI
Summary of the Document
The Federal Register document outlines a proposal by the Board of Governors of the Federal Reserve System to solicit public comments on their plan to extend the Semiannual Report of Derivatives Activity for three more years without making any revisions. This report gathers data from eight major U.S. dealers that are active in the over-the-counter (OTC) derivatives market. The key objective is to accumulate comprehensive and globally consistent data to better understand the size and structure of the worldwide OTC financial derivatives markets. The Board seeks feedback on various facets of the information collection process and is open to suggestions on enhancing this process. Interested parties are invited to submit their comments by February 21, 2025.
Significant Issues and Concerns
The primary issue at stake here is the critical examination of the necessity and effectiveness of continuing this report in its current form. It is essential to determine whether the data collected holds practical utility for the Board’s functions and whether the burden of data collection on respondents is justified. Another concern is figuring out ways to minimize this burden by possibly leveraging technology and improving data collection processes.
Impact on the Public Broadly
For the general public, especially those uninvolved with financial markets, the impact of this proposal might seem indirect. However, the insights derived from such data can influence regulatory decisions that affect overall economic stability. A stable financial system can, in turn, have broad implications on economic factors such as inflation, employment, and interest rates, which affect everyday life.
Impact on Specific Stakeholders
The document's proposal primarily impacts U.S. dealers of OTC derivatives. These entities may bear the administrative burden associated with producing and submitting the required data. They might need to invest in or upgrade data collection and reporting systems, which could potentially incur additional costs. On the upside, having a standardized reporting framework contributes to market transparency, which can be beneficial for these stakeholders in the long run by fostering trust and reducing systemic risk.
Overall, while the proposal might necessitate some effort from the respondents in terms of compliance, the broader benefits of having a clearer understanding of derivatives markets hold the promise of enhancing financial stability and transparency, which would be advantageous for the economy as a whole.