Overview
Title
Agency Information Collection Activities: Announcement of Board Approval Under Delegated Authority and Submission to OMB
Agencies
ELI5 AI
The Federal Reserve is keeping things the same with a special report about big money trades called derivatives from the biggest banks. They want to make sure they understand how people use these trades, but nobody gave them any comments about it.
Summary AI
The Board of Governors of the Federal Reserve System is extending the Semiannual Report of Derivatives Activity for three more years without any changes. This report, identified as FR 2436, gathers data on over-the-counter derivatives from the largest U.S. dealers to better understand the global market. The report collects statistics on various types of derivatives like foreign exchange and interest rates. There were no public comments received during the comment period for this extension.
Abstract
The Board of Governors of the Federal Reserve System (Board) is adopting 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
The document from the Federal Register pertains to an announcement by the Board of Governors of the Federal Reserve System (the Board) about the extension of an information collection known as the Semiannual Report of Derivatives Activity. This report, identified as FR 2436, will be extended for three years without any changes. It is primarily aimed at collecting data from the eight largest U.S. dealers of over-the-counter (OTC) derivatives. This data collection intends to provide insights into the size and structure of the global derivatives market. It's important to note that no public comments were submitted during the comment period regarding this extension.
General Summary
The document reveals the Board's intention to continue gathering derivatives market statistics. The FR 2436 collects detailed data on derivatives, including their notional amounts and gross fair values across different types of contracts like foreign exchange, interest rates, and credit default swaps. This effort is part of a larger global data gathering exercise conducted by central banks to ensure data consistency worldwide. The Board emphasizes the report's role in providing a comprehensive view of the global OTC derivatives market.
Significant Issues or Concerns
Several issues arise from the announcement. First, the document does not specify how the eight largest U.S. OTC derivatives dealers are selected, which could lead to perceptions of favoritism or unfairness. Additionally, there is a lack of detail regarding how the estimated annual burden of 3,898 hours, imposed on respondents, is managed or rationalized. This lack of clarity could pose a concern regarding the efficient use of resources. Further, while the report aims to collect comprehensive data, its potential benefits or applications for public or governmental interests are not transparently communicated. Lastly, the language used to guide users on accessing supporting documentation is somewhat vague, which could lead to confusion. The technical jargon present throughout may also limit public understanding or engagement with the document.
Impact on the Public
Broadly, the document's impact on the public seems limited, given its specific technical focus on derivatives markets. However, the collection and analysis of such data are crucial for maintaining financial stability, which indirectly benefits the public by helping avoid systemic risks in financial markets. The lack of clarity about the resources' utilization and data's purpose could potentially generate skepticism among the public about the transparency and necessity of such endeavors.
Impact on Specific Stakeholders
For stakeholders directly involved, such as the eight largest U.S. OTC derivatives dealers, this document formally extends their reporting responsibilities without any changes for another three years. This maintenance of the status quo implies continued compliance with existing data reporting requirements. However, without clear criteria for their selection as respondents, there may be concerns about equity and transparency in the Board's processes.
In conclusion, while the document supports ongoing efforts to monitor and understand global OTC derivatives, the issues of clarity, transparency, and the equitable selection of respondents highlight areas needing attention to ensure public trust and participation in such regulatory processes.
Issues
• No information on the criteria or process used to select the eight largest U.S. dealers of OTC derivatives, which could potentially raise questions about favoritism or fairness.
• The document lacks clarity on the specific use or impact of the estimated 3,898 annual burden hours, which might be considered non-transparent management of resources.
• The report does not specify how the comprehensive and internationally consistent data will be utilized to benefit public or governmental interests, potentially obscuring the purpose of the data collection.
• The language describing the supporting information and access methods ('On the page displayed at the link above') is vague and could lead to confusion about how to actually find and reference the information.
• The technical jargon related to derivatives and the details of the respondents may not be easily understandable to a lay audience, which could impede public understanding or engagement.