Over the holiday, Congress and the Administration pogo-sticked themselves back from the edge of the fiscal cliff. But, still bouncing up and down at the brink, U.S. fiscal policy remains very much a work in progress. The policy geography does, however, include another abyss, which we will call the “financial cliff.” In this and subsequent reports, we provide the views of Karen Petrou and the rest of FedFin staff on the 2013 policy agenda for financial-services firms doing business in the U.S. This report provides our overview of key issues, addressing both the regulatory and legislative landscape in light of leadership changes across Washington, market developments, and the pending fiscal debate. Subsequent reports will address a critical emerging issue – what some at the FRB are calling “Reg 2.0,” describing key components in a framework that, if implemented as planned, would dramatically restructure the strategic framework for the largest BHCs. We will also look at other critical rules (e.g., Volcker, risk retention, “qualified” mortgages, retail-payment products) and the prospects for a rewrite of U.S. housing-finance policy. Forthcoming reports will also advise clients on the outlook for U.S. action on critical global initiatives (e.g., Basel III), as well as on the ongoing build-out of the U.S. orderly-liquidation authority.
The full report is available to retainer clients. To find out how you can sign up for the service, click here