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16 11, 2022

REFORM215

2022-11-22T15:02:46-05:00November 16th, 2022|5- Client Report|

HFSC Session Brings Crypto Action to Fore, “Holistic” Capital Under Scrutiny

HFSC today largely focused bank regulators on the same range of questions posed at yesterday’s Senate Banking session (see Client Report REFORM214).  However, Chairwoman Waters (D-CA) emphasized the importance of federal legislation in sharp contrast to Chairman Brown (D-OH), also announcing a hearing in December on FTX.  Ranking Member McHenry (R-NC), who will become HFSC chairman in the next Congress, concurred with the chairwoman’s views on the need for digital-finance statutory reform.  However, he took strong issue with inter-agency policy with regard to new capital rules, merger restrictions, and third-party relationship constraints.  Republican members also targeted Vice Chairman Barr’s holistic capital review, arguing that banks are currently well capitalized and that additional standards would hamper lending.  Mr. Barr indicated that an SLR rewrite is part of the holistic review but not immediately necessary to quell Treasury-market volatility or illiquidity.  As discussed in more detail below, regulators promised banking-sector crypto rules at least as stringent as Basel’s proposal.

REFORM215.pdf

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9 11, 2022

DAILY110922

2022-11-09T16:59:00-05:00November 9th, 2022|2- Daily Briefing|

FIO, HHS Plan Longer Ponder on Federal Cyberinsurance

The Federal Insurance Office and the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency today extended the comment deadline for comments on whether a federal insurance response is warranted for catastrophic cyber risk.  The earlier notice asked what type of catastrophic attacks on U.S. critical infrastructure are most likely, how best to measure their effect, the current catastrophic insurance landscape, and how any federal insurance should be structured.

FDIC Board Stands By DSIB Resolution Reform

At today’s FDIC Systemic Resolution Advisory Committee session, Acting Chairman Martin Gruenberg defended the release of proposed DSIB resolution standards as guidelines, not rules.  Director Chopra reiterated concerns he expressed at a recent FDIC board meeting (see Client Report DEPOSITINSURANCE115), pressing for a structural rewrite of both DSIB and GSIB resolution standards.  Acting Comptroller Hsu focused largely on supervisory build-out, noting the need for more creative, forward-looking assessments of resolution plans.  Mr. Hsu also wants regulatory statements to ensure that investors understand that TLAC is a buffer of capital-at-risk in the event of extreme stress.

Daily110922.pdf

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