Overview
Title
Agency Information Collection Activities: Announcement of Board Approval Under Delegated Authority and Submission to OMB
Agencies
ELI5 AI
The Federal Reserve Board is keeping a program going for three more years that checks big banks' money details to make sure they're doing okay, but they didn't change anything and no one said anything about it during the time people could share their thoughts.
Summary AI
The Federal Reserve Board is extending its data collection program called FR 2510, which gathers detailed financial information from large U.S. banking organizations, for another three years without any changes. This program helps the Board oversee crucial financial firms by collecting detailed data on their assets, liabilities, and other financial exposures. The extension follows a public comment period that ended without any feedback. The data collection occurs quarterly and involves around eight financial institutions, with the goal of better understanding and monitoring these banks' global activities and their potential impacts on the financial system.
Abstract
The Board of Governors of the Federal Reserve System (Board) is adopting a proposal to extend for three years, without revision, the Report of Institution-to-Aggregate Granular Data on Assets and Liabilities on an Immediate Counterparty Basis (FR 2510; OMB No. 7100- 0376).
Keywords AI
Sources
AnalysisAI
The document from the Federal Register informs the public about the Federal Reserve Board's decision to continue its data collection initiative, titled FR 2510, for another three years. This initiative gathers comprehensive data from large banking organizations in the U.S. to better understand their financial conditions and the potential effects of their global operations. The process involves collecting information on assets, liabilities, and exposure to various financial instruments quarterly. Despite a public comment period ending without feedback, the Board has decided to proceed with the extension.
General Summary
The Federal Reserve Board, functioning under the Paperwork Reduction Act, has decided to extend the data collection associated with the FR 2510 program. This decision was made to continue monitoring key financial institutions, which are considered globally significant due to their scale and potential influence on the financial system. These institutions are classified as global systemically important bank holding companies (BHCs) and are obliged to participate in the data collection process, providing quarterly updates on their financial standings. The document outlines that eight such organizations are expected to respond, contributing to an estimated 18,528 annual burden hours for data submission.
Significant Issues and Concerns
One primary concern is the lack of detailed criteria for selecting the bank holding companies involved. The document refers to regulations like the Board's Regulation Q but does not explicitly clarify the selection process, which could lead to misunderstandings regarding eligibility.
Moreover, the document uses technical language—such as "granular exposure data" and "immediate counterparty basis"—that might be challenging for the general public, especially those unfamiliar with financial or regulatory jargon. This complexity may hinder the public's ability to understand the importance and implications of the document.
The document also notes the absence of public comments during the designated period, implying either insufficient engagement or awareness among stakeholders. This lack of feedback could impact the breadth of perspectives considered in the Board's decision-making process.
Lastly, although burden hours are estimated, the document does not mention specific measures to ensure that the data collection process is efficient and not overly taxing on respondents, raising potential concerns about the practicality and resource implications for the participating entities.
Impact on the Public and Stakeholders
For the general public, this document represents an ongoing effort by federal authorities to supervise financial institutions and mitigate risks that these entities could pose to the financial system. Ensuring that such organizations are consistently monitored is crucial for public confidence in financial stability.
For the financial institutions required to participate in the FR 2510 program, the extension could imply continued resource allocation for data collection and reporting. This might involve additional administrative burdens, particularly for compliance departments within these organizations.
On the positive side, comprehensive data collection enables the Federal Reserve to maintain robust oversight of influential banks, thereby potentially preventing financial crises that could have widespread repercussions. For financial regulators and economists, the data collected is invaluable for analysis and policy-making aimed at safeguarding economic stability.
In conclusion, while the extension of the FR 2510 program underscores the Federal Reserve's commitment to financial oversight, addressing the highlighted concerns and enhancing clarity and engagement could improve the effectiveness and public perception of this regulatory initiative.
Issues
• The document mentions the collection of granular exposure data on assets, liabilities, and off-balance sheet holdings of certain large banking organizations, but it does not provide specific criteria for selecting these organizations beyond them being global systemically important BHCs under the Board's Regulation Q. This may cause ambiguity regarding which organizations are included.
• The language used to describe the purpose and contents of the FR 2510 collection could be perceived as overly complex, such as 'granular exposure data' and 'immediate counterparty basis,' which might not be easily understood by individuals without a financial or regulatory background.
• The section describing 'Final Approval Under OMB Delegated Authority' has a dense layout of technical terms and numbers (e.g., the OMB control number, estimated respondents, and burden hours) that might be difficult for a general audience to interpret quickly.
• The notice mentions no public comments were received during the comment period, suggesting either a lack of public awareness or engagement with the proposal. This could be a concern if public input is necessary for balanced decision-making.
• The document does not highlight any specific measures to ensure that the data collection process will be efficient and not overly burdensome on the respondents, beyond providing the estimated burden hours.
• While the document provides URLs for additional information, it assumes access to and navigation of specific websites, which may not be straightforward for all interested parties.