This article explores the dynamic world of bank liquidity and the key ratios that regulators and financial institutions closely monitor to ensure sound financial management...while there's no universal formula for determining the right level of liquidity for banks, these guidelines are crucial for managing liquidity effectively.

Waller on Tuesday declined to say whether he would support another increase this year, saying that will depend on incoming data. The Fed governor said he needed the data to show “a couple of months continuing along this trajectory before I say we’re done” raising interest rates.

With interest rates going up, more consumers have missed payments on household debt.

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While the proposals raise capital requirements for operational and market risks, they actually reduce them slightly for credit risks arising from lending decisions. Regulators have estimated that most banks already have enough excess capital to comply with the rules, and those that do not can easily retain earnings to meet them by their effective date in mid-2028.

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Distillate inventories, which include diesel and heating oil, were by late August about 15% below the five-year average for this time of year, according to the Energy Information Administration..."Even with soft demand, diesel inventories are stubbornly low, and cracks have rallied in search of supply or demand-side relief before winter."

Over $1.5 billion of office loans matured in July, the second highest monthly total so far in 2023, trailing only May’s $2.1 billion of maturities. Unlike May, which had a payoff rate of almost 50%, July saw only 6% of maturing loan balance payoff. Things may not be as bad as they first appear though.

June marks the first month since last December that the annualized construction start number has declined to less than 500,000 units. That month, construction starts had totaled 470,000 units.

Banks with less than $250 billion in assets held about three-quarters of all commercial real-estate loans as of the second quarter of 2023. They accounted for nearly $758 billion of commercial real-estate lending since 2015. The doom-loop scenario is starting to play out in big cities where office vacancies have soared. Real-estate investors that are unable to refinance their debt, or can only do it at high rates, are defaulting. The lenders, no longer getting the debt payments, often have to write down the value of those mortgages, often by 30-50%. Sometimes the bank ends up owning the property.

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The regulatory concerns raised by the Fed have prompted a halt in the acquisition of riskier FinTech clients by a division of Goldman Sachs' transaction banking business. This warning serves as a setback for Goldman Sachs' plans to expand into new businesses and highlights the need for robust risk management and compliance practices in the FinTech industry.

Goldman’s write-down implies a number of valuation metrics have declined, ranging from the value of the stock acquired, to the actual business performance of the unit itself. The haircut is, of course, significant, and tops 60%.