Lates News

The Federal Reserve released the minutes of its July meeting, which mentioned that vulnerabilities related to leverage in the financial sector were described as "significant". The regulatory capital ratios of the banking industry remain high, and recent annual supervisory stress test results show that all banks participating in the test can maintain capital levels above the minimum requirement even under stressed scenarios. However, banks are still considered to be more vulnerable to interest rate risks compared to historical norms, although the extent has decreased since the beginning of the decade. In the non-banking sector, the size of life insurance companies' asset allocations to private credit and risky assets continues to grow, partly funded by short-term non-traditional liabilities. Leverage and rollover risks in hedge funds remain high and are concentrated in large firms.