#cross border payments – Page 3 – Federal Financial Analytics

6 12, 2022

DAILY120622

Eliza Allen2022-12-06T16:40:03-05:00December 6th, 2022|2- Daily Briefing|

FSB Again Ratifies Focus on Crypto, Climate, Macro Risks

Following its meeting today, the FSB Plenary announced 2023 priorities to be finalized in January. Focus will center on heightened monitoring of financial stability risks, enhanced NBFI and CCP resilience, work on the global crypto regulatory framework, cross-border payments reform, cyber and operational resilience, and financial risks from climate change.

FinCEN Targets De-Risking Compliance

Pointing to possible enforcement actions, Treasury Assistant Secretary for Terrorist Financing and Financial Crimes Elizabeth Rosenberg today noted FinCEN concerns with the extent to which institutions apply a rules-based approach to de-risking rather than a risk-based one, leaving it vulnerable to fast-changing risks and without access to valuable suspicious activity information.

Warren, GOP Senators Put Silvergate On FTX Hotseat

Reflecting at least some bipartisan agreement on the need for new crypto standards, Sens. Warren (D-MA), Kennedy (R-LA), and Marshall (R-KS) late yesterday sent a letter to the CEO of Silvergate Bank demanding detailed information regarding its relationship with FTX and FTX affiliates.

GOP Threatens Woke Asset Managers With BHC Designation

The Senate Banking GOP report today on ESG asset management contains an interesting aside about the extent to which passive ownership of banking organizations could make the three largest asset managers de facto BHCs.

Brown Fires First Shot in 2023 ILC Wars

Putting down a market for the next Congress, Senate Banking Chairman Brown and two Democratic colleagues today introduced their bill end bar ILC charters for nonbank parents.

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16 11, 2022

DAILY111622

Eliza Allen2022-11-16T17:14:29-05:00November 16th, 2022|2- Daily Briefing|

Treasury Calls for Tough Fintech and Bank-Partnership Protection, Prudential Standards

Treasury has completed a long-pending study of the extent to which nonbank fintechs compete with banks and how this affects financial stability and consumer protection. We will shortly provide clients with an in-depth analysis of this report, for which Karen Petrou was extensively interviewed as now noted publicly in the appendix. The report was ordered by the Secretary in compliance with President Biden’s competition order (see Client Report MERGER6), finding that nonbank fintechs directly compete with banks and thus may reduce current concentration levels, sure to influence the inter-agency bank-merger policy that remains to be finalized.

Williams Presses for NBFI Standards

In remarks today, FRB-NY President John Williams said that the central bank should not adjust monetary policy to address the price-stability challenges of volatile Treasury markets and that financial-stability questions have generally been well-addressed as evident in the sound U.S. banking system. Noting recent findings in the latest staff report (see Client Report TMARKET3), Mr. Williams also called for structural changes to NBFIs along lines also laid out by the FSB (see Client Report NBFI2), arguing that MMFs and other NBFIs must be a market source of strength, not of vulnerability requiring rescue beyond the Fed’s new standing facility.

G20 Blesses FSB, Basel Work Plans

In addition to top-priority concerns such as Ukraine, the G-20 Leader’s Declaration today tackled the usual financial-policy agenda, supporting the FSB’s recent NBFI report (see Client …

1 09, 2022

DAILY090122

Eliza Allen2022-12-20T16:17:52-05:00September 1st, 2022|2- Daily Briefing|

FTC Tackles Credit-Card Digital Marketing

In an action with implications for all credit-card issuers, the FTC today ordered Credit Karma to pay $3 million to consumers allegedly harmed by the company’s marketing misrepresentations. The Commission’s complaint claims that Credit Karma’s use of digital dark patterns – user interfaces designed to steer consumers to choices in a company’s, rather than their own, interest – enticed consumers into applying for credit cards for which they did not qualify.

Hsu Presses for Responsible Innovation

In remarks today generally focused on community banks, Acting Comptroller Hsu also focused on ways to ensure that small banks safely enter digital finance. The OCC is reinvigorating a 2015 effort to encourage partnerships among community banks that pool resources and expertise – what we would call a new approach to bankers’ banks focused here on technology innovation.

IMF Stakes Out New Stablecoin Standards

The IMF today released a flurry of articles outlining the benefits and risks of DeFi and digital assets, with one article warning against regulating stablecoins like banks.

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29 07, 2022

DAILY072922

Eliza Allen2023-01-04T13:45:23-05:00July 29th, 2022|2- Daily Briefing|

Credit-Card Routing Expansion Introduced, Faces Long Odds

As anticipated, Sens. Marshall (R-KS) and Durbin (D-IL) have introduced S. 4674, legislation to extend routing-system requirements to credit cards.

FDIC, Fed Crack Down on IDIs Working with Crypto Companies

In addition to joining the Fed in sending a stern warning to Voyager about misrepresenting FDIC insurance, the FDIC today issued an advisory instructing IDIs as to how best to partner with crypto companies to prevent future misunderstanding and ensure compliance with the agency’s new rule (see FSM Report DEPOSITINSURANCE113).

BIS Lays Out Risks to Central Bank Green Assets

The BIS Consultative Group on Risk Management today released a report detailing the data and methodological challenges faced by central banks implementing climate risk into their reserve-management frameworks.

FTC Takes on Payment Processing

The FTC today unanimously reached a settlement with the nation’s largest payment processor, First American, related to what some call “trick-and-trap” practices.

BIS Advances Cross-Border PVP Payment Options

Hoping to speed the introduction of payment versus payment (PvP) systems to reduce frictions in cross-border payments, the BIS today released a call for information that details previous PvP proposals and asks for comment on them.

HFSC Republicans Expand CFPB Attack to State-AG Partnerships

Continuing their campaign against CFPB Director Chopra, HFSC Republicans have sent him a letter accusing the Bureau of intimidating companies by pursuing duplicative enforcement actions with state regulators.

Daily072922.pdf…

14 07, 2022

DAILY071422

Eliza Allen2023-01-06T15:12:22-05:00July 14th, 2022|2- Daily Briefing|

FSB Climate-Risk Progress Report Underscores Disclosure Standards, Improved Data

The FSB today released a climate-risk progress report that also details near-term actions. These include not only the statement to the G20 in October noted in yesterday’s G20 report, but also a status report in September from the Task Force on Climate-Related Financial Disclosures (TCFD) on industry progress toward adopting its climate disclosure recommendations.

CFPB, OCC Slam BofA for UI-Fraud Lapses

The OCC and CFPB today issued a $225 million enforcement order against Bank of America related to unemployment-insurance and public-benefit fraud that led the bank to improperly withhold prepaid-card payments to legitimate recipients.

BIS Builds “Central Bank Liquidity Bridges”

Continuing its work to promote better cross-border payments, the BIS today floated the idea of “central-bank liquidity bridges” to overcome current frictions in the bank-dominated sector.

Clarida and Powell Cleared, but OIG Still Reviewing Fed Ethics

The Office of the Inspector General at the Fed today cleared former Vice Chair Clarida and Chairman Powell of ethics violations that have dogged them as recently as a letter yesterday from Senate Democrats.

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20 05, 2022

DAILY052022

Eliza Allen2023-02-21T14:11:57-05:00May 20th, 2022|2- Daily Briefing|

G7 Presses for Global Crypto Action

Preoccupied though it was with Ukraine, the G7 ministerial communiqué advances and hones global work on digital assets. Most notably, it calls on the FSB to advance and implement comprehensive cryptoasset regulation. As recent FSB statements indicate, the Board is contemplating its options; this G7 directive may accelerate work into more concrete standards more quickly, stipulating like-kind rules for like-kind activities. The communiqué also calls global disclosure standards on stablecoin reserve assets and “encourages” jurisdictions to explore CBDC’s “international dimensions.”

Global Regulators Press for Harmonized, DeFi Cross-Border Payments

The BIS and CPMI today issued to papers supporting their work to build out the cross-border payment system advocated by the FSB (see FSM Report PAYMENT23). The first paper lays out an aspirational global rulebook designed to ensure that all transborder nodes are premised on common standards for finality, certainty, and the other criteria essential to sound payment-system operations. The second paper takes the concept of legal uniformity into the new arena of decentralized finance, laying out where DeFi might be applicable to cross-border payments with a best-execution DeFi construct, an approach for inter-operability among central banks and private banks, a DeFi utilities for AML/KYC identification, and a small-payment platform.

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10 05, 2022

DAILY051022

Eliza Allen2023-02-21T15:41:13-05:00May 10th, 2022|2- Daily Briefing|

HFSC Looks at NSRO Competition, Insurance Ratings

The HFSC Investor Protection Subcommittee hearing on bond markets reopens debate about the credit rating agencies that is unlikely to end in substantive action despite continuing Democratic displeasure with these agencies and the SEC standards mandated for them by the Dodd-Frank Act (see Client Report RATINGS49).

FinCEN Under Still More Beneficial-Ownership Pressure

Picking up on a theme at a recent HFSC hearing, Sens. Warren (D-MA), Grassley (R-IA), and over a dozen bipartisan senators sent a letter to Treasury demanding faster action on stalled beneficial-ownership disclosure rules. Acknowledging that FinCEN lacks the resources it needs, the senators nonetheless demand action in part to ensure effective anti-Russia sanctions enforcement.

IMF Head Calls for New Global Payment-System Infrastructure

In remarks today, IMF Managing Director Kristalina Georgieva identified financial-market fragmentation in the wake of Russian sanctions as the threat to the global order also discussed in a recent Petrou op-ed.

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9 03, 2022

CRYPTO26

Arezou Rafikian2023-04-04T10:50:56-04:00March 9th, 2022|5- Client Report|

Biden Administration Decides Crypto Here to Stay, Seeks CBDC

We follow our initial client alert here with an in-depth analysis of President Biden’s long-awaited executive order laying down steps intended quickly to construct a U.S. digital-asset policy construct. Although sparked in part by virtual currency’s role in the Ukraine crisis, the executive order (EO) is a watershed event establishing for the first time that the U.S. views digital assets as a fixture of future finance warranting a rapid, far-reaching, and stringent set of governance, law-enforcement, equity, inclusion, and technology policy intervention. In general, the EO establishes a U.S. principle akin to that set by global regulators in this area: same-business same rules. Nothing in the order thus threatens SEC Chairman Gensler’s assertion that current law addresses many investor-protection challenges (see Client Report INVESTOR19) indeed, the EO strengthens the SEC’s hand by validating the chairman’s concerns.

CRYPTO26.pdf…

7 03, 2022

DAILY030722

Eliza Allen2023-04-04T12:23:58-04:00March 7th, 2022|2- Daily Briefing|

Liang Reiterates Climate, Digital Worries

Treasury Under-Secretary Liang’s comments to international bankers today addressed the U.S. financial-reform agenda after noting market turbulence and reiterating the importance and effectiveness of current Russian sanctions.

Mandatory Disclosures for Mandatory Arbitration?

Ahead of a hearing tomorrow, Senate Banking Chairman Brown (D-OH) released a statement on S. 3755, legislation cosponsored by senior Democrats on both the Banking and Judiciary Committees banning pre-dispute arbitration clauses and class-action waivers.

Hsu Emphasizes Sanctions Compliance, Climate, Inclusion

Acting Comptroller Hsu today told international bankers that they must ensure compliance with U.S. sanctions, heighten cybersecurity vigilance, and work together to protect continuing trust in cross-border finance.

FinCEN Sets Up Red Flags, High Alert

FinCEN today issued sanctions “red flags”, assisting compliance, but also laying out clearer markers for enforcement should its concerns about cryptocurrency and other possible evasions remain at individual institutions or exchanges. The release emphasizes SARs for immediate reporting of suspicious activities related to Russian state actors and/or oligarchs and related entities.

GOP Seeks to Widen Russian Financial Sanctions

As Congress and the White House wrestle with additional ways to sanction Russia, senior House Republicans today have advanced a package of bills which may well find at least some Democratic support. Among the most likely to advance on a bipartisan basis is H.R. 6900 from Rep. Huizenga (R-MI) expanding current sanctions on Russian sovereign debt to bar U.S. financial institutions from secondary dealings in Russian sovereign debt regardless of issuance date.

Daily030722.pdf…

7 03, 2022

m030722

Arezou Rafikian2023-04-04T12:29:12-04:00March 7th, 2022|6- Client Memo|

Why Armies Now March on Their Wallets

Napoleon famously said that armies march on their stomachs. Now, it’s clear that armies also march on their wallets. The dollar’s blitzkrieg triumph isn’t due to any love of the greenback — even America’s closest allies have long hoped to counterbalance US. economic dominance with rival payment systems able to operate unscathed regardless of U.S. sanctions. However, the EU, U.K., and Japan have never gotten much past dreaming about payment-system challenges because the embedded dollar-based system has become essentially friction- and risk-free. That’s hard to beat.

m030722.pdf…