23 11, 2021

Daily112321

2021-11-24T13:58:46+00:00November 23rd, 2021|2- Daily Briefing|

FSB publishes 2021 G-SIB list
A new post in the Federal Reserve Bank of New York’s blog looks at offshore U.S. Dollar MMF runs during COVID to assess the remedies recently outlined by the FSB for MMF reform (see Client Report MMF18) now under review by the FSOC, SEC, and FRB.

FSB Tinkers with GSIB Designations
The FSB today published its 2021 GSIB list, capturing the same thirty banks but moving some around just a bit. Now, JPMorgan, BNP Paribas, and Goldman Sachs have moved one bucket higher, with JPMorgan now the only Bucket 4 institution, with no banks yet in the top Bucket 5.

OCC Sets Out on Crypto Roadmap Ahead of FRB, FDIC
Although the agencies today issued their crypto “roadmap,” the actual two-page document reads a bit more like a travel brochure. However, the OCC today also sent a letter making it clear to national banks that, while the agencies consider an array of options, the OCC will not permit continued crypto innovation along any of lines charted by Acting Comptroller Hsu’s predecessor.

Daily112321.pdf

22 11, 2021

Wellesley Magazine, November 22, 2021

2021-11-22T22:24:23+00:00November 22nd, 2021|Press Clips|

Keeping Tabs on the Central Bank

By Heather Long ’04

Karen Dolmatch Petrou ’75 still remembers the exact words the Bank of America chief executive said to her in 1985. He “did not feel good about making a young woman a senior VP.” Karen was 32 at the time, and had risen quickly through the ranks at the bank. Instead of waiting around to see if he changed his mind, she quit and founded her own firm, Federal Financial Analytics.

Today, Karen is one of the world’s leading experts on bank regulation and policy. American Banker once described her as “the sharpest mind analyzing banking policy today—maybe ever.”

https://magazine.wellesley.edu/fall-2021/keeping-tabs-on-the-central-bank

22 11, 2021

Daily112221

2021-11-22T21:54:31+00:00November 22nd, 2021|2- Daily Briefing|

FedFin Initial Assessment: Powell Appointment Process, What’s Next
As anticipated, today President Biden nominated Jerome Powell to a second term as Fed chair and Lael Brainard accepted the vice chairmanship of the Federal Reserve System, not just that for supervision.

ECB Adopts Innovative, Crypto, Digital Regulatory Construct
Leaving the U.S. still farther behind, the European Central Bank today finalized a new electronic-payment regime capturing nonbank and digital payments.

FSB Reiterates Urgency of LIBOR Transition
Underscoring the importance of quickly ending LIBOR reliance, the FSB today again emphasized that it is critical that institutions be ready for LIBOR cessation at the end of the year.

Daily112221.pdf

22 11, 2021

Karen Petrou: Why Naming Powell was Hard, Confirming Him Will Be Harder and Being Him Will Be Hardest

2021-11-22T14:39:16+00:00November 22nd, 2021|The Vault|

According to the American Farm Bureau Federation, the cost of Thanksgiving dinner this year is up fourteen percent, not counting the sixty percent hike it costs to buy the gas to get to grandma’s.  This of course only compounds the political challenge facing the Biden Administration when it tries to confirm its choices for the next iteration of the Federal Reserve Board.  However, while inflation is indeed a lightning rod, the macroeconomic building below it is also strung with perilous wiring.   This is because the Fed – not Congress – is now a fiscal powerhouse, exacerbating inequality and the slow growth that goes with it no matter the trillions Democrats hope to throw around.

The Fed would have it that there is a pure monetary-policy realm premised on independent macroeconomic thinking while the fiscal hurly-burly is responsible for anything macroeconomic that the Fed does not or cannot achieve.  The purity derives, or so the Fed likes to say, from its ascetic “dual” mandate, which allows the Fed only to seek “maximum” employment and price “stability.”  But, as both my book and a new paper detail, the black-letter law of the Fed’s express mandate in fact includes a third injunction:  “moderate long-term interest rates.”

Further, The Federal Reserve Act is not the only provision of federal law stipulating the Federal Reserve’s goals.  The Fed is also covered by the overall statutory injunction to all federal agencies under the Full Employment Act to advance the “general welfare” in concert with an …

19 11, 2021

AL112221

2021-11-19T22:11:42+00:00November 19th, 2021|3- This Week|

We Shall See

When President Biden first nominated Saule Omarova as Comptroller of the Currency, Karen Petrou called it an effort at a classic Washington political package in which the Administration bowed to progressives on the OCC slot to get them to back off their opposition to Chairman Powell. It of course didn’t work, with Sen. Warren (D-MA) immediately branding Mr. Powell a “dangerous man” to make very, very clear that she hadn’t bought into a deal even if other key senators were willing to do so.  What’s next?

AL112221.pdf

19 11, 2021

Daily111921

2021-11-19T22:10:39+00:00November 19th, 2021|2- Daily Briefing|

Congressional Democratic Leaders Advance Tough Small-Business Lending Standards

Senior Democrats in both the House and Senate have introduced legislation (H.R. 6054 and S. 3235) to apply TILA to small business financing, granting the CFPB the same authority for small business loans as over consumer finance.

Daily111921.pdf

18 11, 2021

REFORM210

2021-11-18T21:58:37+00:00November 18th, 2021|5- Client Report|

Omarova Nomination Threatened

As expected, today’s hearing with Comptroller-nominee Saule Omarova included an unprecedented amount of fireworks for what is normally a low profile appointment.  In this report, we omit analysis of the debate on Ms. Omarova’s origins and alleged Marxism, instead assessing policy issues germane should Ms. Omarova succeed in what seems an increasingly difficult confirmation.  Notably, moderate Democrats such as Sens. Tester (D-MT) and Warner (D-VA) were clearly concerned with Ms. Omarova’s opposition to the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA), while Republicans lambasted her for previous comments about cutting off credit to the oil and gas industry and proposals they believed would nationalize U.S. banking.

REFORM210.pdf

18 11, 2021

MarketWatch, Best New Ideas in Money Podcast, Thursday, November 18, 2021

2021-11-19T21:47:42+00:00November 18th, 2021|Press Clips|

A financial innovation that could cure diseases

BioBonds would help fuel a key stage of medical research that often struggles to get funding.

A podcast from MarketWatch in which Karen and Foundation Fighting Blindness CEO Ben Yerxa are interviewed on the BioBonds legislation.  They explain how the greatest problem facing medical research is not the science but funding, going on to show how BioBonds would bring much needed capital into the clinical research arena at low risk to investors.

https://www.marketwatch.com/podcasts/best-new-ideas-in-money/a-financial-innovation-that-could-cure-diseases/05E53FF0-80E5-444B-AB16-815A1AB60832

 

 …

18 11, 2021

FAIRLEND10

2021-11-18T21:40:16+00:00November 18th, 2021|1- Financial Services Management|

HMDA Rewrite

The CFPB has followed a study earlier this year finding significant mortgage product and price discrepancies based on race or ethnicity with a request for input (RFI) on the HMDA data on which the study was based.  This is a preliminary effort with no immediate regulatory or supervisory consequences, but it likely presages a significant HMDA-regulatory rewrite in no later than 2023 to provide still more firepower for ongoing CFPB, Department of Justice, and bank-regulatory actions against credit discrimination and redlining.

FAIRLEND10.pdf

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