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Jeremy Kress Profile picture
Jeremy Kress
@Jeremy_Kress
Associate Professor of Business Law @MichiganRoss. Co-Faculty Director @MichiganCFLP. Former Federal Reserve attorney. Tweets my own.
Apr 18 • 20 tweets • 7 min read
Today, the Federal Reserve unanimously approved Capital One's acquisition of Discover Financial, creating the 8th largest U.S. bank and biggest credit card issuer.

The Fed's written order utterly fails to grapple with why this deal is so problematic. I unpack it in this 🧵 By law, the Fed must consider several factors when evaluating a merger, including competition, the public interest, and financial stability.

On each factor, the Fed ignores legitimate concerns raised by public commenters that should've stopped this deal.
Mar 15, 2023 • 10 tweets • 3 min read
There is a developing narrative that SVB would have met all regulatory requirements, even if Congress and Fed had not substantially deregulated.

I think this narrative is likely wrong. 🧵 The analysis linked above purports to show that SVB would have satisfied the modified LCR that originally applied to banks with $50B-$250B in assets, based on December '22 data.

(The modified LCR was essentially 70% of the full LCR that applied to even bigger banks).
Mar 14, 2023 • 10 tweets • 4 min read
A few thoughts, speaking only for myself:

Debating whether stress tests, the LCR, NSFR, living wills, or any of the other enhanced prudential standards would have saved SVB/Signature misses the forest for the trees. S.2155 and "tailoring" sent the clear message that $50B-$250B banks are not systemically important, and should not be treated as such. Policymakers took their eye off the ball.
Sep 9, 2021 • 8 tweets • 4 min read
A quick thread on Jay Powell and bank consolidation.

Tl;dr: By waving through bank mergers, Powell has undermined the Biden Administration's professed commitment to enhancing competition. The President should replace him as Fed Chair. Under Powell's leadership, the Fed has been a rubber stamp for bank mergers.

The Powell Fed approved 95% of merger applications in 2018 (up from ~80% under Obama Admin). The Powell Fed also approved contested mergers at record speed: four months, on average (down from ~1 year).
Dec 19, 2019 • 9 tweets • 4 min read
Unsurprisingly, big-bank lawyer Thomas Vartanian opposes @SenWarren and @RepChuyGarcia's Bank Merger Review Modernization Act, based on my research.

I want to explain why Vartanian's critiques are misleading, disingenuous, and flat-out wrong. /1

americanbanker.com/opinion/fix-cr… I've already rebutted the argument that @CFPB doesn't need a separate say on bank mergers b/c it has a seat on the FDIC board.

The FDIC doesn't oversee the biggest mergers. And even if it did, its focus is safety-and-soundness, not consumer protection.

Dec 6, 2019 • 4 tweets • 2 min read
I've seen arguments (in @morningmoneyben and elsewhere) that the Warren/Garcia proposal to give the @CFPB a say in bank mergers is unnecessary because the CFPB Director already sits on the FDIC Board.

I want to explain why these arguments are wrong. 1/ First, the largest banks and bank holding companies are within the OCC's and Fed's jurisdiction - not the FDIC's.

So the CFPB is currently excluded from reviewing mergers involving the banks it supervises (those with >$10B in assets). 2/