GOP Demands AG’s CBDC Ruling
HFSC Republicans today sent a letter to Attorney General Merrick Garland demanding a copy of the DoJ’s assessment on whether legislation is necessary to issue a CBDC required and due on September 5 by the President’s crypto executive order (see Client Report CRYPTO26). Citing both Congress’ exclusive authority to coin money and Chairman Powell’s (see Client Report FEDERALRESERVE71) and Vice Chair Brainard’s (see Client Report CBDC13) ambiguous discussion of what constitutes CBDC “approval,” the Republicans reiterate that the Fed does not have the authority to issue a CBDC under current law.
Basel Blesses Counter-Cyclical Buffers
Following the FSB’s directive, the Basel Committee today issued a newsletter on counter-cyclical capital buffers (CCyBs) and a detailed report on capital and liquidity buffers. The FSB has posited that one reason for both bank resilience and pandemic-related credit shortages was the unwillingness of banks to dip into buffers. As we noted recently, Treasury Under Secretary Liang praised CCyBs and Basel’s newsletter reaches the same conclusion. However, the detailed report finds that CCyB release had a weaker, albeit discernible, effect than express regulatory decisions to allow banks to use their capital buffers.