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| MARKETS — as of Oct 2, 6:26 AM ET |
Equity futures S&P7,754+0.39% Nasdaq30,969+0.68% Dow51,451+0.41% Rates 2-Year4.78%-10 bps 10-Year5.24%-5 bps SOFR3.90%+2 bps Credit & risk High Yield3.12%+4 bps Crude89.43-3.70% Bitcoin$86,235+1.63%
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Friday, October 2 · Lead Fed stress-test rules publish with November and January dates The Federal Reserve's two final stress-test rules, adopted 6-1 on September 30, publish in the Federal Register today with dates attached. The transparency rule, which requires the Board to disclose its models each year and take public input on scenarios before finalizing them, takes effect November 2, 2026, and creates a reconsideration process for the stress capital buffer (SCB). The averaging rule moves the SCB's annual effective date one quarter later, to January 1, and drops the phase-in for highly material supervisory model changes. Comments on the 2027 test models close December 1. | ▸ | The 2027 models: The Board finalized the 2027 test models and asked for comment on further changes to how the noninterest income model treats differences across firms of $100 billion or more. The transparency rule's reconsideration process for the SCB is new; the document does not detail its mechanics. |
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REGULATORY DEVELOPMENTS Treasury proposed cutting a Russia-linked network Iran uses to evade sanctions out of U.S. transfers; the SEC opened a custody path that puts state trust companies in competition with bank custodians. | ▸ | A7 network, a transmittal ban proposed: FinCEN proposed on October 1, under section 9714(a) of the Combating Russian Money Laundering Act, to bar U.S. financial institutions from processing transmittals of funds involving the Sub-Agents of the A7 Network, a Russia-linked shadow banking network Iran uses to evade sanctions; OFAC designated the network a transnational criminal organization and FinCEN issued an Alert with red flags. FinCEN says the Sub-Agents processed more than $17 billion between January 2025 and June 2026 and ties them to Iranian oil sales and weapons procurement. The ban binds only once a final rule issues; comments run 30 days after publication. The Alert is live now. |
| ▸ | Iran's autos and rail, same day: Treasury also issued two sectoral determinations under Executive Orders 13902 and 13871 that authorize OFAC to sanction any person operating in Iran's automotive or rail sectors. It then designated seven Iranian carmakers, including Iran Khodro (IKCO) and SAIPA, alongside five foreign suppliers. Treasury says IKCO and SAIPA hold more than 90 percent of Iran's domestic auto market; the foreign suppliers are where a U.S. bank's trade-finance or correspondent book would meet the program. The pair builds nearly 1.5 million vehicles a year. |
| ▸ | Bowman on the leverage rule, with numbers: Speaking at the Atlantic Council on October 1, Vice Chair for Supervision Michelle Bowman reported early results from the enhanced supplementary leverage ratio (eSLR) recalibration the Fed, FDIC and OCC finalized in November 2025. The rule replaced a fixed 2 percent buffer with half of each global systemically important bank's (GSIB's) method-1 surcharge. Seven of the eight U.S. GSIBs adopted it early. The parents of the six largest dealers gained nearly $5 trillion of eSLR headroom in aggregate in the first quarter. Dealers' Treasury positions rose from roughly $600 billion to more than $700 billion by the end of April, with the increase concentrated at firms that had run the thinnest buffers. The speech set no new requirement. |
| ▸ | State trust companies as crypto custodians: The SEC proposed on October 1 to let registered investment advisers and regulated funds hold client crypto assets with state trust companies, or in self-custody when no suitable custodian can be found. Better Markets said the proposal protects the crypto industry rather than investors' assets. For bank custodians, the proposal adds state charters to a field that already includes the OCC trust banks conditionally approved September 18. Comments run 60 days after the proposal publishes. |
| ▸ | CDFI targeting criteria: A Treasury information collection would remove race and ethnicity from the criteria community development financial institutions (CDFIs) can use to establish a targeted market population, American Banker reported; banks certified as CDFIs that serve minority communities would need to requalify those markets on other grounds. It is an information collection, not a rule. |
INDUSTRY AND AI SIGNALS | ▸ | Crude lower, Fed voices apart: Crude fell about 4 percent to near $89 a barrel in pre-market trading. The 2-year Treasury yield fell 10 basis points to 4.78 percent on Thursday, Treasury data show, and the 10-year eased to 5.24 percent. Vice Chair Philip Jefferson said at Darden on October 1 that it may take more time before the next increase, which the FT read as a signal of an October hold. Reuters reported that Dallas Fed President Lorie Logan called for hikes of 50 basis points or more, and Minneapolis Fed President Neel Kashkari told CNBC he sees one more increase this year. Reuters' Morning Bid said markets are looking to U.S. jobs data for the next clue on October. ABA Banking Journal put the 30-year fixed mortgage rate at 7.28 percent. |
| ▸ | Fiserv's stablecoin rail goes live: Fiserv said October 1 that its digital asset platform is live with financial institution clients; the first use case is Roughrider Coin, the Bank of North Dakota's dollar-backed stablecoin, which runs on Solana and which more than 90 North Dakota banks and credit unions can use to move money, according to coverage of the launch. One report says VersaBank issues the coin for the state-owned bank; other coverage does not name an issuer. A core processor distributing the capability matters for community banks because it puts stablecoin rails inside an existing vendor relationship. Visa, separately, says business payments now drive 17 percent of its stablecoin-linked card volume, and it completed a $750,000 cross-border stablecoin settlement pilot with Lloyds. The GENIUS Act takes effect January 18, 2027 unless a final rule moves it. No issuer yet holds GENIUS Act approval. |
| ▸ | Stripe buys Parafin: Stripe agreed to acquire Parafin, an embedded-finance company that lends to small businesses through software platforms. Payments Dive reported that it is Stripe's second acquisition in as many months, and American Banker said it could bolster Stripe's merchant credit product as rivals make similar moves. Separately, personal finance platform Monarch acquired MBI, the digital banking fintech formerly known as HMBradley. Parafin's financial terms were not disclosed. |
| ▸ | Anthropic's IPO clock, chip loan: Broadcom will lend Anthropic up to $42 billion to lease its chips, Reuters reported, citing a filing; CNBC carried the same terms. Bloomberg reported that Anthropic could begin formal IPO marketing as soon as the week of November 9 and trade before Thanksgiving, with PYMNTS citing a $2 trillion valuation target. Barclays, meanwhile, is extending its use of Claude for software development and legacy-system work. For banks that run the model, a supplier-financed compute build is vendor-risk information on the provider. For capital-markets desks, it is a pre-holiday underwriting calendar. The company is still considering its plans. |
POLITICAL & LEGISLATIVE The campaign against Jerome Powell moved toward the Justice Department; the SEC, separately, changed the rule that decides when it can act at all. | ▸ | Powell, the attorney general and the renovation: President Trump posted Wednesday evening that Powell, the former chair who remains a governor, should be forced to resign from the Board, adding that he has instructed the attorney general to investigate, American Banker reported. Chair Kevin Warsh has tapped the General Services Administration to lead the headquarters renovation and rein in costs, after the Office of Inspector General recommended a guaranteed maximum price. Because governors keep for-cause protection after Trump v. Cook, an investigation is the route by which any removal case would have to be built. The inspector general found no criminal wrongdoing. |
| ▸ | SEC quorum, down to one: The SEC's amended quorum rule at 17 CFR 200.41, effective October 2, keeps three commissioners as the baseline but lets the number in office form a quorum when fewer than three serve, while one available commissioner may act on a matter when every other commissioner is disqualified. For independent commissions, the change separates the power to act from the number of seats filled, the variable that removals move. The same removal question reaches the FDIC and NCUA boards. The rule took effect October 2. |
| ▸ | FHFA's watchdog shrinks: A senior official at the Federal Housing Finance Agency's Office of Inspector General said budget cuts will force large layoffs and essentially eliminate its criminal probes, American Banker reported. FHFA supervises the Federal Home Loan Banks. |
WHAT'S COMING | ▸ | Swap desks, two CFTC dates: The CFTC's clearing determination for interest rate swaps, updated for the Canadian dollar and Mexican peso benchmark transitions, takes effect October 8; bank swap dealers should confirm which legacy swaps in those currencies now fall inside the required clearing set before their trade flow reaches them. The CFTC's Conflicts and Affiliations proposal, which reaches futures commission merchants affiliated with banks, closes to comment October 5. The clearing change applies in six days. |
WHAT IT MEANS | ▸ | Stress-test dates turn next year's capital plan into a calendar. The transparency rule's November 2 effective date and the December 1 comment close on the 2027 models give a bank two chances to contest the test before it runs, and the averaging rule moves the buffer's effective date to January 1. Capital-planning teams should put both dates on the annual calendar now. |
Dates That Matter OCT 5
3d | Comments close: OCC Rules Regarding the Availability of OCC Information [OCC] · Regulatory Modernization and Relief for Mutual Holding Companies [FRB] · Extensions of Credit to Insiders [FDIC] · Conflicts and Affiliations [CFTC] · Loans to Executive Officers, Directors, and Principal Shareholders of Member Banks [FRB] · Commodity Pool Operators and Commodity Trading Advisors [CFTC] · Disclosure of Information; Extension of Comment Period [FDIC] | OCT 5
3d | Watch: Supreme Court order list for the Sept 28 long conference: Nos. 25-1313, 25-1350, 25-1004 [Watch] |
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Today's inputs
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