NEW YORK–(BUSINESS WIRE)–Kroll Bond Rating Agency (KBRA) releases this month’s edition of the Bank Treasury Newsletter, Bank Treasury Chart Deck, and Bank Talk: The After-Show.
This month’s newsletter, Bank Treasurers Want Forgiveness, Too, deep-dives into the Paycheck Protection Program (PPP), the PPP Liquidity Fund (PPPLF), and why bank treasurers would like to see the Small Business Administration (SBA) forgive loan recipients for 100% of principal but now believe the forgivable portion of loan proceeds will be closer to 75%. Weekly bank data from the Federal Reserve is reviewed, showing that deposits are growing even faster than the balance of PPP loans approved since April 1.
The Bank Treasury Newsletter explains its editorial position that the forgiveness rate on PPP loans could be lower than 75%, explaining why many PPP borrowers may decide to sit on the cash in their checking accounts and take advantage of relatively generous terms for a two-year loan, which carries a 1% rate that can be deferred for up to one year.
The May edition of the Bank Treasury Newsletter Chart Deck examines the recent trends in regional bank stocks, loan demand, and the interest rate environment, and explains the resurgence in speculation that the Fed will adopt a negative interest rate policy by looking at recent price and volume trends in Fed Funds Futures. Summary data from research published this month in a special report, Coronavirus (COVID-19): CECL and Q1 2020 Provisions, is included at the end of this month’s chart deck.
In the latest Bank Talk: The After-Show, Fed Launches More Aid, Van Hesser and Ethan Heisler review the Fed’s Main Street Lending Program and the different programs that have been set up under it. While looking at the size of the existing Fed programs that were launched to address the economic fallout from COVID-19, the duo discuss why the Fed has been successful in stabilizing credit markets without actually lending much on credit.
Click below to view the reports:
- The Bank Treasury Newsletter Chart Deck: May 2020
- Bank Talk: The After-Show: Fed Launches More Aid
- The Bank Treasury Newsletter: May 2020
- Coronavirus (COVID-19): CECL and Q1 2020 Provisions
About KBRA and KBRA Europe
KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and is a certified Credit Rating Agency (CRA) with the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA. Kroll Bond Rating Agency Europe Limited is located at 6-8 College Green, Dublin 2, Ireland.
Ethan M. Heisler, CFA, Strategy
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Nish Kumar, Senior Director
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