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4 11, 2022

DAILY110422

2022-11-04T17:11:14-04:00November 4th, 2022|2- Daily Briefing|

Big Banks Pressed on Sluggish, Inequitable Deposit-Rate Hikes

Advancing an initiative with political “legs,” Sen. Jack Reed (D-RI) has demanded answers from the nation’s largest banks on why small-deposit rates have barely budged even as the Fed sharply hiked interest rates now reflected in higher loan costs.

FRB-NY Official Details Wholesale CBDC Prototype

Remarks today from a senior FRB-NY official, Michelle Neal, continued the Fed’s ambivalent stand on a CBDC (see FSM Report CBDC10).

Fed Fixes Advanced-Approach Glitches

The FRB is proposing to implement three changes to Regulation Q data collection/disclosure rules governing advanced-approach capital adequacy at BHCs, SLHCs, and state member banks.

Fed to Name Master-Account Names

Reflecting ongoing concerns on Capitol Hill, the Fed is proposing to make what our analysis suggests were opaque payment-system access guidelines (see FSM Report PAYMENT24) “a bit more transparent.”

Toomey Presses for SLR Rewrite

Ranking Senate Banking Member Toomey (R-PA) today released his letter to Chairman Powell cautioning the central bank not to handle any Treasury-market liquidity events with new backstop facilities.

Waters Adds To Fed’s Political Woes

In a letter today, HFSC Chairwoman Waters (D-CA) joined Sens. Warren (D-MA), Brown (D-OH), and Hickenlooper (D-CO) in sharply criticizing the recent Fed “super-sized” rate hike.

Fed Worry Level Goes Up

The Federal Reserve likely hoped for the torpor of a Friday afternoon to quell frightened replies to the latest financial-stability report released today.

Daily110422.pdf

14 10, 2022

DAILY101422

2022-10-14T17:04:18-04:00October 14th, 2022|2- Daily Briefing|

Along with a Squeaker Merger Approval, Fed/FDIC Begin Work on Large-Bank Resolvability

As anticipated in Karen Petrou’s speech yesterday, the Fed today unanimously approved and the FDIC will shortly do the same on an advance notice of proposed rulemaking re-enforcing large-bank resolvability.  That this complex rulemaking will not slow near-term merger decisions was made clear today also by the Fed and OCC decisions to clear USB’s acquisition of MSFG’s California banking organization.

Covid Comm Presses CFPB for Still More Credit-Reporting Reform

The Chairman of the Select Subcommittee on the Coronavirus Crisis, Rep. James Clyburn (D-NC) sent a letter to CFPB Director Chopra requesting that the Bureau investigate the three nationwide consumer reporting agencies (NCRAs) for failing to properly address credit reporting errors.  Citing data, the Subcommittee obtained from the NCRAs, Chairman Clyburn alleges that reporting errors occurred far more often than previously thought, that the majority of disputes do not result in consumer relief, and that the NCRAs discarded “tens of millions” of submissions without investigation by claiming they came from unauthorized third-parties.

Waller Dismisses Threat To Reserve Dollar Without A CBDC

In remarks today, FRB Governor Waller reiterated his skepticism of foreign-issued CBDCs and stablecoins, arguing that the underlying reasons for dollar dominance are non-technological and CBDCs will not affect them.  He dismisses concerns that foreign CBDCs would undermine dollar dominance because they could neither reduce payment frictions nor prevent illicit finance.

Daily101422.pdf

8 09, 2022

DAILY090822

2022-11-09T13:00:10-05:00September 8th, 2022|2- Daily Briefing|

Gensler Stands Crypto Ground

In remarks today, SEC Chairman Gensler stood firm: almost all crypto tokens are securities because they are investment contracts under the “Howey Test.”  Further guidance is unnecessary, he said, because the Commission has been clear and crypto companies request it only because they do not like this conclusion, not because they fail to understand it.

GOP Demands Answers On CBDC Authorization, Construct

Ranking Member McHenry (R-NC) and all of the HFSC’s Republicans today sent a letter to Vice Chair Brainard demanding that she clarify several issues germane to U.S. CBDC issuance.  These most notably include the extent to which the “support” from the Administration and Congress she said was needed (see Client Report CBDC13) means express statutory change and Administration order.

Toomey Demands Greater CRA Transparency, Updated Regulations

Ranking Member Toomey (R-PA) today sent a letter to Vice Chair Brainard, Acting Comptroller Hsu, and Director Gruenberg sharply criticizing what he calls a lack of transparency of CRA-derived community benefit plans (CBPs).  Describing these as an “egregious” circumvention of congressional intent, he demands that the banking regulators update regulations implementing GLBA’s CRA sunshine provision, specifically urging them to establish a public database containing all CRA-related agreements in full.

Daily090822.pdf

7 09, 2022

DAILY090722

2022-11-09T16:08:53-05:00September 7th, 2022|2- Daily Briefing|

Hsu Expands on Crypto, Climate, Merger, Systemic Actions

Acting Comptroller Hsu today made it clear that – contrary to assertions from Sen. Warren (D-MA) and others – his decision not to rescind prior OCC crypto charters and related rulings does not mean the agency is taking anything other than a cautious approach to cryptoassets.  He also indicated that the slow-down in interagency action is warranted as it gives officials time to understand recent shocks to this sector.

New Brainard Position Suggests Fed CBDC Thinking Advances

In addition to hawkish anti-inflation remarks, Fed Vice Chair Brainard today appeared to back away from her prior comments espousing an expansive view of how a U.S. CBDC might work (see Client Report CBDC13).  Now calling CBDC a “neutral settlement layer” affording additional stability and opposing a consumer-facing model.

Barr Takes Stage With Bold Plans For Capital, Resolution, Mergers

In his maiden speech today, Fed supervisory Vice Chair Michael Barr made several significant announcements.  Reiterating the support for holistic capital regulation noted during his confirmation, Mr. Barr confirmed that the Fed will undertake a sweeping review of standards to address unintended consequences without reducing capital requirements.  The Board will also begin action on the Basel “end-game” later this fall.

Daily090722.pdf

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