Banks instructed to review risk

U.S. lenders should review their plans for filling funding needs in times of stress to ensure that they have access to a range of liquidity sources, according to top banking regulators.

Banks should maintain “actionable” contingency plans and focus on their liquidity risk management, agencies including the Federal Reserve and the Federal Deposit Insurance Corp. said Friday in a joint statement.

The issue was spotlighted by the sudden collapse of several lenders including Silicon Valley Bank earlier this year.

“The events of the first half of 2023 have further underscored the importance of liquidity risk management and contingency funding planning,” the regulators said.

“As seen in these events, the level and speed of deposit outflows at a few firms was unprecedented and contributed to acute liquidity and funding strain at those institutions.”

The agencies said the guidance is part of a bid to encourage lenders to incorporate the Fed’s discount window as part of their contingency funding plans.

Tractor maker says sales slowingOne of the world’s largest tractor makers, CNH Industrial, says it’s getting harder to pass on price increases to customers, in a sign of tightening conditions for farmers.

Many farmers have been upgrading machines in the wake of Russia’s invasion of Ukraine in 2022 that disrupted grain exports and sent wheat prices to a record.

But with harvests and prices normalizing while interest rates rise, farm profits are easing.

“We’ve been clear we have no intentions of decreasing pricing, but we think limiting how much we increase it is probably the right thing to do at this point,” said Scott Wine, chief executive officer of CNH Industrial.

Already, used inventory of crop-cutting combines is increasing in markets like North America. In Ukraine , where CNH has a large market share, farm equipment sales have dropped by 50% this year, Wine said.

From wire reports