Fed Study: Capital Buffers Proved Procyclical
Using confidential Fed data, a new FRB staff paper finds that banks that came close to their capital buffers reduced lending to creditworthy small-and-medium enterprises (SMEs), a move not matched by banks with ample capital. Buffers thus did not serve their counter-cyclical purpose in this key sector.
Waters Sets Stage for Housing-Infrastructure Action
Preparing for a full committee hearing tomorrow with HUD Secretary Fudge, the Democratic staff memo highlights the housing-infrastructure bill from Chairwoman Waters (D-CA) we analyzed late last week.
HFSC Dems’ Inclusion Solutions: Public Banks, FedAccounts, Expanded CUs
The majority staff memo on Wednesday’s HFSC Subcommittee hearing on financial inclusion indicates that three draft bills advancing a strongly-progressive agenda will be considered at a session bankers hoped would instead focus on BankOn accounts and other access initiatives.
Biden Highlights Competition EO, “Transitory” Inflation
Making it clear that the Administration is prioritizing its new competition policy, President Biden today highlighted his recent Executive Order (see Client Report MERGER6), arguing that promoting competition will help drive down prices amid worries about increasing inflation.
House Democrats Try Again on Credit-Rating Reform
Renewing a battle Democrats have waged since before Dodd-Frank, HFSC’s second subcommittee hearing on Wednesday will examine draft legislation from its chair, Rep. Sherman (D-CA), to partially nationalize credit ratings.
PWG Plans Stablecoin Report, Risk Recommendations
The readout today of the PWG’s stablecoin meeting emphasizes Secretary Yellen’s demand for quick regulatory action. However, the plan announced today is solely a Treasury report with risk recommendations in “coming months.”