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15 04, 2022

FedFin: BIS Finds Ways to Give Nonbanks Payment-System Access, Increase CBDC’s Inclusion Impact

2022-04-27T19:48:25-04:00April 15th, 2022|Uncategorized|

As promised, we turn here to an in-depth analysis of a paper from global regulators on whether CBDC contributes to financial inclusion – one of the most vital arguments from those advocating CBDC in the U.S. and in many other nations.  The paper is not analytical, as it is based on interviews with nine central banks exploring retail CBDC, but all of those interviewed view CBDC as an effective tool to promote inclusion if designed to do so and the paper also surveys research to back up its findings.  It details numerous ways CBDC could prove inclusive, including a first-time assessment of how making certain CBDC aspects programmable and how regtech could permit nonbanks to enter the CBDC payment system without undue risk…

The full report is available to subscription clients. To find out how you can sign up for the service, click here.…

2 11, 2021

CRYPTO21

2021-11-02T19:37:11-04:00November 2nd, 2021|5- Client Report, Uncategorized|

FedFin Assessment: The Near-Term Stablecoin Regulatory Agenda

As noted yesterday, the President’s Working Group on Financial Markets (PWG) was joined by the OCC and FDIC yesterday issuing a report calling for prompt Congressional action to regulate stablecoins and, even in its absence, also for fast action by federal regulators and the FSOC.  In part because it poses the largest regulatory void, the most worrisome of the risks the report details arises from the role stablecoins may play in the payment system and resulting threats to systemic stability and competition.  Issues germane to digital-asset trading (defined to include lending and related activities) are described but largely left to regulators; SEC Chairman Gensler has made it clear (see Client Report INVESTOR19) that he intends to act and the CFTC-chair nominee has done the same.

CRYPTO21.pdf

15 09, 2021

GSE-091521

2021-09-15T17:43:32-04:00September 15th, 2021|4- GSE Activity Report, Uncategorized|

GSEs Get a New, If Familiar, Gig

As noted yesterday, Treasury and the FHFA pulled the Trump PSPA’s plug, although importantly and widely overlooked is that this is true only when it comes to near-term asset-purchase considerations.  Still, with this action atop all the others redefining Fannie and Freddie since Sandra Thompson took over, the GSEs are being reconfigured into agents of Administration policy in concert with being still more critical agencies for housing finance.

GSE-091521.pdf

15 09, 2021

Mises Institute, Wednesday, September 15, 2021

2021-09-16T17:20:27-04:00September 15th, 2021|Press Clips, Uncategorized|

The Fed Is Bailing Out the Wealthy as Everyone Else Pays the Price
By Ryan McMaken

The Federal reserve says that inequality is a problem. At the same, the Fed also pretends to have nothing to do with it.
Last September, for instance, Jerome Powell bemoaned the “relative stagnation of income” for people with lower incomes in the United States, but then claimed the Fed “doesn’t have the tools” to address this issue. Instead, Powell, being the chairman of this ostensibly “independent” and “nonpolitical” central bank, called for the federal government to engage in fiscal policy efforts at income redistribution….In her new book, Engine of Inequality: The Fed and the Future of Wealth in America, Karen Petrou looks in detail at how Fed policy over the past decade—especially quantitative easing (QE) and ultralow interest rates—have benefited the wealthy while leaving most ordinary people behind. Petrou is one of the more interesting and informative analysts examining the financial services sector. As the head of Federal Financial Analytics Inc., she has provided research on the banking sector for more than thirty years, but in recent years she’s become more focused on exposing and examining the unhealthy and destructive effects of Fed policyPetrou takes a different approach from the Austrians. She appears to have arrived at her conclusions from observing the trends and outcomes produced by Fed policy and then working backward into a theoretical framework. The data seems to have prompted her to ask why things have gone …

14 09, 2021

Daily091421

2021-09-17T15:19:35-04:00September 14th, 2021|2- Daily Briefing, Uncategorized|

Warren Renews Demand for Wells Fargo Break-Up

Renewing her attack against Wells Fargo, Sen. Warren (D-MA) has called on the Fed to retract the company’s financial holding company (FHC) status.

Treasury/FHFA Reset the GSEs’ Role in U.S. Housing Finance

As we forecast earlier this year, Treasury and the FHFA today suspended — but did not abrogate — key aspects of the Trump Administration’s final changes to the standards governing Fannie Mae and Freddie Mac under the PSPA.

Daily091421.pdf

8 07, 2021

FedFin on GSIB Transparency

2021-07-08T18:49:49-04:00July 8th, 2021|The Vault, Uncategorized|

The House Financial Services Committee has approved legislation introduced by a progressive Democrat, Rep. Ayanna Pressley (D-MA), requiring GSIBs to disclose many quantitative and qualitative matters deemed necessary to assess the extent to which these very large banks engage in behavior that, while legal, treads on concerns related to systemic risk, racial equity, climate risk, incentive compensation, market concentration, and the Community Reinvestment Act.  Many disclosures could bring to light information GSIBs have long considered proprietary that are required of none of their competitors nor of any other public company in the U.S.

The full report is available to retainer clients. To find out how you can sign up for the service, click here

16 04, 2021

Daily042621

2021-04-16T20:42:44-04:00April 16th, 2021|Uncategorized|

Global Crypto Prudential Standards
Moving beyond recent concerns expressed by the Financial Stability Board on “decentralized” finance,1 the Basel Committee is soliciting views on a preliminary assessment of crypto-asset risk and the capital, liquidity, and prudential standards it warrants for banking organizations. Although framed as only a request for general comment, the paper specifies numerous risk-management and supervisory protocols Basel believes should already be in place at banks with direct or indirect crypto exposures. While seeming to differentiate between high-risk exposures and others likely to be considerably less problematic, the overall risk-management framework appears to apply to all crypto exposures.

FedFin Assessment: Expanded U.S. Trade War to Exchange Rates Poses Structural, Strategic, and Systemic Challenges
The Federal Register today includes one of the most controversial steps the Trump Administration is taking in its already contentious trade wars: use of countervailing duties to punish nations the Commerce Department determines are manipulating their currency to advantage export competitiveness.

Daily041621.pdf

3 09, 2020

GSE-100317

2020-09-03T14:31:33-04:00September 3rd, 2020|4- GSE Activity Report, Uncategorized|

Conservatorship Quandary Continues
Mel Watt’s appearance today before the Financial Services Committee signals the beginning of House GSE-reform action, but it’s the beginning of the beginning with little clear end in sight. That said, the GSEs’ exemption from the QM rule and, by inference, FHA’s is now taking heavy GOP fire that could result in regulatory change under a Republican head of the CFPB.

GSE-100317.pdf

27 08, 2020

FEDERALRESERVE43

2020-08-27T21:12:01-04:00August 27th, 2020|Uncategorized|

Powell Defends Senate Bill FBO, Threshold Provisions
In this report, we assess FRB Chairman Powell’s appearance today before the Senate Banking Committee. With the Senate finreg legislation (see Client Report SIFI25) heading to the floor next week, supporters pushed the Chairman to rebut claims that the legislation benefits large foreign banks and eliminates key standards for banks between $100 billion and $250 billion. Despite Treasury Secretary Mnuchin suggesting that FBOs with U.S. operations under $250 billion will benefit from the legislation (see Client Report SIFI26), Mr. Powell said that the FRB will consider these banks’ global total consolidated assets when applying prudential requirements and that the bill does not mandate changes to IHC rules.

FEDERALRESEVE43.pdf

 …

27 08, 2020

REFORM145

2020-08-27T20:25:00-04:00August 27th, 2020|5- Client Report, Uncategorized|

Senate Banking Welcomes FDIC, FSOC Nominations, Dems Target Goodfriend
In this report, we assess today’s Senate banking hearing on the nominations of Jelena McWilliams to be Chair of the FDIC, Marvin Goodfriend to be an FRB Governor, and Thomas Workman to be the FSOC voting member with insurance expertise. Ms. McWilliams, a former committee staffer, received a friendly reception from both sides (who know her well). She plans to prioritize reducing community-bank burdens, encouraging de novos, and advancing a regulatory approach to cyber security. She also said that she would like to take “a look” at leverage-capital rules. Late yesterday, the White House made a change to her nomination almost surely resulting in Vice Chair Hoenig leaving the Board when his term expires in April.

REFORM145.pdf

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