Fed to collect $440 million from banks in fees
17 Aug 2013
The Federal Reserve is expected to collect $440 million in fees from 70 big banks and other financial firms to help cover the cost of their supervision, according to media reports.
The Fed provided the estimate as it announced the completion of a rule that provided for the annual fees, an AFP report said. The fees are intended to compensate the costs of expanded regulation, which, according to the Fed, gained under the 2010 financial overhaul law. The payments for 2012 fall due by 15 December, according to the Fed.
The fees apply to the largest banks with operations in the US and non-bank financial firms that had been deemed as potentially threatening the stability of the financial system. American International Group and GE Capital were last month classified as falling into that category.
Meanwhile, according to CNBC, markets would continue to be volatile in the coming weeks, as traders watched for signs of when the central bank might curb its bond-buying programme.
The Fed's plans to "taper" or slow-down quantitative easing, or bond purchases had been speculated about for several weeks after it said it expected to start the process before year end.
As September approached, many believe the Fed may finally start ending quantitative easing. Meanwhile, treasury yields rose to fresh two-year highs on expectations that the economic news would be good enough for the Fed to begin reducing purchases.
With the official policy meeting scheduled only in mid-September, Fed watchers would be looking for clues in Wednesday's release of minutes from the August Federal Open Market Committee meeting on the likely date, the modalities and timing of the $85 billion monthly bond purchases.
The annual Kansas City Fed gathering in Jackson Hole would get underway on Thursday, and while Fed chairman Ben Bernanke would not be there, other officials would be present, and they were bound to continue to express their views on Fed policy, according to commentators. The chairman had used the Jackson Hole podium to launch important ideas about policy.
The Fed has said a decision would be taken, not only on the basis of the strength of the economy but also on financial conditions.
While traders are hoping the August meeting minutes would reveal which Fed officials' voices prevailed - hawks, who are pushing for a quicker end to the easing, or doves, who would move slower - in the past week, both St Louis Fed president James Bullard, a voting member, and non-voting Atlanta Fed president Dennis Lockhart said there might not be enough data with the Fed to call for tapering in September.
