Banks, Asset Managers Come in for New Climate Controversy
In a letter to HSBC CEO Noel Quinn, Sen. Steve Daines (R-MT) sharply criticized the bank’s decision to suspend a top official, Stuart Kirk, for earlier remarks that climate change’s financial risk is being overstated. The letter raises policy issues as well as political ones because the Senator warned that the decision may violate US law because it may reflect pressure from BlackRock in violation of its passive-asset commitment to avoid controlling-party designation.
Bureau Bashes Big Banks, Wants Better Customer Service
Fulfilling its director’s promises to target big banks (see Client Report CONSUMER40), the CFPB today released an RFI seeking ideas on how big banks can be encouraged or perhaps forced to enhance customer service, an attribute Mr. Chopra conflates with consumer protection in a speech accompanying this action. The Bureau is concerned that big banks do not provide “high-quality” service and the interactions necessary for the relationship banking deemed important to fair competition, especially in rural areas.
BIS Finds DeFi Increases Financial Risk, Harms Inclusion
In a bulletin today, the BIS highlighted the negative impact that the anonymous nature of DeFi has on financial risk and inclusion. It finds that overcollateralization is pervasive in DeFi lending because screening of individual borrowers is impossible, but crypto’s volatility means that overcollateralization did not eliminate risk of loss.