Dems Demand Tougher CRA Standards
HFSC Chairwoman Waters (D-CA) today released the comment letter she and 76 Democrats filed on the CRA proposal (see FSM Report CRA32). As anticipated, it strongly supports community-group comments on issues such as the need for express CRA recognition of a bank’s demographic record. The letter also supports the proposed, tougher approach to scoring, although it argues that it should be made still more stringent via component scores that emphasize LMI and community-of-color performance largely on a facilities-based methodology.
BoE Staff: Regulators Must Tackle Cryptoassets Before They Pose Systemic Risks
Echoing concerns now troubling the Financial Stability Board, a new article from the Bank of England concludes that growth of an open and decentralized metaverse could augment existing cryptoasset risks and trigger systemic financial stability consequences. The article first describes volatility, hacking risks inherent to oracles and smart contracts, transaction front-running and potential negative effects on market confidence, and leverage. More cryptoasset use and interconnectedness – especially for household investments, payment, and bank and non-bank financial institutions – might exacerbate existing risks via new vulnerabilities to macroeconomic shocks, balance-sheet losses, fire-sales, and declines in bank profitability.