#crypto – Page 4 – Federal Financial Analytics

31 10, 2023

DAILY103123

Eliza Allen2023-10-31T17:02:58-04:00October 31st, 2023|2- Daily Briefing|

HFSC GOP Turns to Merger-Policy Demands

Financial Institutions Subcommittee Chair Barr (R-KY) and Rep. Fitzgerald (R-WI) last night sent the federal banking-agency heads a stiff letter demanding to know when they plan finally to issue the long-promised bank-merger policy following public notice and comment.

China Leads New BIS CBDC Pilot

In a new CBDC project sponsored by the BIS’s Innovation Hub, central banks either directly associated with China or within its ambit will focus on multi-CBDC wholesale cross-border payments.

White House, Labor Turn to Retirement Advice “Junk Fees”

Building on its “junk-fee” initiative, the White House today expanded Obama-era “best-interest” standards to retirement advisers to close what it believes are loopholes in the SEC’s jurisdiction under its broker-dealer best-interest standard.

BIS CPMI: Even Sound Stablecoins May Not Be Worth the Effort

A new report from the BIS Committee on Payments and Market Infrastructures finds that properly designed and regulated stablecoins could improve cross-border payments by increasing speed and transparency while lowering costs, especially in emerging markets and developing economies.

GAO Vacates Key SEC Crypto Ruling

The GAO today released a report finding that the SEC’s staff accounting bulletin (SAB) 121 is a rule subject to the Congressional Review Act, throwing a key Gensler anti-crypto ruling into immediate ineffectiveness and an uncertain future.

Daily103123.pdf…

27 10, 2023

Al103023

Eliza Allen2023-10-27T17:00:24-04:00October 27th, 2023|3- This Week|

Take a Deep Breath

But don’t relax too much as newly-minted Speaker Johnson (R-LA) figures out what he’s going to do with the gavel now that he’s got it. The House has barely three weeks to see if unanimity holds and a shutdown is avoided in favor of yet another can-kicking continuing resolution. Regardless, with HFSC Chairman McHenry (R-NC) happily freed of his Speaker Pro Tem assignment, HFSC will this week (see below) return to the high-impact hearing schedule if was forced to cancel during the speakership battle, move a raft of bills through mark-up, and work hard to put Mr. McHenry’s plans to realign crypto jurisdiction into must-pass legislation if the House agrees (likely) and the Senate doesn’t object (far less certain). Among the bills to be marked up and those on the Senate’s agenda will surely be measures reviewed at last week’s Senate Banking hearing to ensure Treasury is super-tough when it comes to Iran and Hamas. Secondary sanctions are in the works, putting any financial institution doing business in the U.S. on notice that offshore activities so far out of law-enforcement’s reach are about to come in range. And, if that’s not enough, then there’s all the regulatory action.

Al103023.pdf…

26 10, 2023

DAILY102623

Eliza Allen2023-10-26T16:48:48-04:00October 26th, 2023|2- Daily Briefing|

Senate Banking Focuses on Rapid-Fire Administration Action to Sanction Iran, Curb Hamas, Govern Crypto

Today’s Senate Banking Hearing on Illicit Finance and Terrorism showcased continued bipartisan support for stronger Iranian sanctions as well as for secondary sanctions on traditional financial institutions and cryptoasset firms facilitating terrorism. In addition to highlighting their bipartisan measure targeting DeFi-related money laundering and sanctions evasion, Sens. Reed (D-RI) and Warner (D-VA) noted that they are working on a bill that would apply secondary sanctions on banks and DeFi entities that transact with foreign parties that facilitate terrorist financing.

Bipartisan Small-Business Leadership Opens New End-Game Front

Opening a new front of Congressional concern about the capital proposal’s credit impacts, House Small Business Economic Growth Subcommittee Chairman Meuser (R-PA) along with Ranking Member Landsman (D-OH) and two others today sent a letter to FRB Chairman Powell and Vice Chair Barr “imploring” them to commission a comprehensive review of the capital proposal’s effects on small business lending. They also ask that all the agencies counteract any negative repercussions of the proposal, noting that this might entail significantly easing capital requirements.

Daily102623.pdf…

23 10, 2023

DAILY102323

Eliza Allen2023-10-23T16:37:02-04:00October 23rd, 2023|2- Daily Briefing|

HFSC Plans Fintech-Friendly Legislation

Wednesday’s HFSC Digital Assets Subcommittee hearing on electronic payments will consider the state of various electronic payments offerings and lay the groundwork for several GOP measures to override current standards or give providers greater leeway. As a result, these bills are unlikely to advance in the Senate. Measures to be covered include a bill to be introduced by Rep. Steil (R-WI) to create a federal framework for the earned-wage lending programs the CFPB has recently criticized.

HFSC Plans Sanctions Review

As anticipated, Wednesday’s HFSC National Security hearing on Middle East sanctions will consider an array of bills designed to punish Iran, sanction Hamas, and – at least as far as Republicans plan – criticize the Biden Administration for actions such as agreeing to release $6 billion to Iran in exchange for several hostages. We have noted many of the bills on which a record will be built in prior client alerts, with the panel planning for example to advance H.R. 5923, a Lawler (R-NY) bill to extend current secondary sanctions related to Iran to all transactions with Chinese financial institutions and sanctioned Iranian banks related to oil purchases.

Daily102323.pdf…

19 10, 2023

DAILY101923

Eliza Allen2023-10-19T16:30:42-04:00October 19th, 2023|2- Daily Briefing|

OIG Blasts FDIC’s Crypto-Policy Delay

Late yesterday, the FDIC’s Office of Inspector General (OIG) issued a report critical of the FDIC’s supervisory crypto policy.

Fed May Signal Possible Compromise as GOP Barr Demands Capital Answers

Amid press reports that Chair Powell has implicitly promised capital-rule compromise, HFSC Financial Institutions Chair Barr (R-KY) released a letter today pressing Vice Chair Barr still harder on the cost-benefit analytical (CBA) and cumulative-impact issues raised at the September hearing at which Karen Petrou testified.

Fed Data Show Increases in Household Financial Resilience, Profound Home-Affordability Gap

The Federal Reserve yesterday released its triennial Survey of Consumer Finances (SCF). As always, we here highlight data with financial-policy implications; Petrou blogs and other releases will update economic-equality indicators.

BIS Head Calls for Review of Large Bank Supervision

BIS General Manager Agustin Carstens today said that the mid-March failures show the need for nations to review how they supervise larger banks, specifically highlighting liquidity risk and setting frameworks for emergency liquidity assistance.

OCC Analysis Shows Broad IRR Resilience With Startling Risk Pockets

Showing some pockets of severe risk but overall resilience, the OCC today released a statistical analysis of interest rate risk based on projected changes in twelve-month net interest income as well as the economic value of equity in parallel interest rate shock scenarios ranging from -200 basis points to +400 bps.

CFPB Thinks Big on Open Banking

As anticipated, the CFPB today advanced from a review of consumer data rights (see FSM Report…

13 10, 2023

Al101623

Eliza Allen2023-10-13T16:28:42-04:00October 13th, 2023|3- This Week|

A Troubling Time

Although federal officials – at least those outside the House of Representatives – are going about their daily business, the awful casualties and looming threat of the Israel-Hamas war hang over a cite that has grown used to other geopolitical risks in Ukraine, Taiwan, and the world’s many other hot spots. The political situation in Washington is fluid not only because the House can do nothing consequential, but also because conditions on the ground change hourly and the prospects for broader conflict loom large. In the near term, we expect hard supervisory questions of large banks with Middle East exposures, bipartisan demands for the Administration to do what it’s already one with the $6 billion Iran-fund freeze, more pressure on Senate Banking Chairman Brown (D-OH) to move the Warren/Marshall crypto-crime bill and HFSC action on numerous sanctions bills if Speaker Pro Tem McHenry (R-NC) is able to trade one gavel for another.

Al101623.pdf…

11 10, 2023

DAILY101123

Eliza Allen2023-10-11T16:47:36-04:00October 11th, 2023|2- Daily Briefing|

Bowman Targets U.S. Leverage Ratio, NBFIs

In remarks during the Morocco IMF/Bank meeting today, FRB Gov. Bowman contrasted U.S. bank resilience with the IMF’s findings yesterday on potential vulnerabilities as rates rise and macroeconomic conditions soften.

FSB Reiterates Stability Concerns

The FSB’s latest work plan reiterates all it most recently said to the G20.

CFPB Barrels Down on “Basic” Banking Fees

In conjunction with a new White-House junk-fee initiative, the CFPB today issued “guidance” – i.e., essentially a final rule – banning large banks and credit unions from collecting “unreasonable” fees for what the Bureau considers reasonable and “basic” account information.

SEC Throws Wrench into TLAC Standards

As we noted yesterday, the FSB’s assessment of the global resolution framework’s effectiveness found significant glitches it urges national regulators quickly to address via standards such as those now pending in the U.S. to bring smaller banking organizations into the resolution-planning regime (see FSM Report LIVINGWILL23).

OFR Study: Short-Selling Does Not Harm Financial Stability

OFR today released a model-based study that finds no evidence that short-selling adversely affects financial stability.

Daily101123.pdf…

5 10, 2023

DAILY100523

Eliza Allen2023-10-05T16:36:40-04:00October 5th, 2023|2- Daily Briefing|

Kanter, Khan Mount Stout Defense of Draft Merger Guidelines

FTC Chair Khan and DOJ Assistant AG Kanter today defended the agencies’ draft merger guidelines (see FSM Report MERGER12) on grounds that they are faithful to congressional intent, reflect core legal principles, are more accessible and easier to apply, and better reflect the modern competitive landscape.

Basel Plans NBFI Ops-Risk Supervisory Standards, Continuing Review of Bank Supervision, New Disclosures

The Basel Committee today released its long-awaited report on 2023 vulnerabilities, deciding based on it to prioritize new supervisory approaches and additional analytical tools.

Bipartisan Bill Provides Transaction Account Deposit Insurance

Following Chairman Gruenberg’s remarks yesterday highlighting targeted deposit insurance reform, Sens. Manchin (D-WV), Braun (R-SD), and Hickenlooper (D-CO) yesterday introduced legislation to reinstate the Transaction Account Guarantee (TAG) program, expanding deposit insurance to non-interest bearing transaction accounts up to $10 million.

FDIC Proposes Public-Good Policy for IDI Corporate Governance

The FDIC today announced the Board’s 3-2 approval of an NPR establishing guidelines on corporate governance and risk management for FDIC-supervised IDIs with over $10 billion in assets.

Daily100523.pdf…

2 10, 2023

DAILY100223

Eliza Allen2023-10-02T16:36:52-04:00October 2nd, 2023|2- Daily Briefing|

FRB FAQs Open a Small, But Significant Capital Window

In what Reuters takes as a sign of hope that the end-game rules may not be as crushing as banks fear, the FRB has issued a new FAQ related to credit-linked notes and SPVs.

Bowman Turns to Specific Supervisory Reforms

In remarks today, FRB Governor Bowman expanded on her prior comments about Fed supervisory lapses, but made it clear that she also opposes a “heavy-handed” supervisory approach that relies primarily on call report data, instead calling for a new approach to CAMELS and regular engagement with financial institutions to express areas of concern or to better understand a bank’s strategic direction.

Fed OIG re Silvergate: Far More Scathing re Supervision, Need for New Guidance

The OIG report today from the Fed regarding supervisory lapses at Silvergate is considerably less expansive than the prior report on SVB because the parent company remains open despite the IDI’s voluntary liquidation and relevant data are thus deemed confidential.

Barr Presses Emergency-Window Readiness

FRB Vice Chair Barr’s comments today on monetary policy and financial stability provide a detailed rationale for addressing the linkages between these two arms of the Fed’s mandate without any specific steps for doing so.

Daily100223.pdf…

27 09, 2023

DAILY092723

Eliza Allen2023-09-27T16:36:21-04:00September 27th, 2023|2- Daily Briefing|

FinCEN Bows to BOI Pressure

Responding to bipartisan concerns, FinCEN today issued an NPR to extend the beneficial ownership information (BOI) report filing deadline from thirty to ninety days for companies created or registered in 2024.

Chopra Considering Refi, Point Rules

The CFPB today released its annual report on residential mortgage lending, finding that mortgage applications, originations, and affordability declined significantly in 2022 while costs, loan denials, HELOC originations, and the percentage of cash-out refinances all increased.

HFSC GOP Presses Gensler on Banking-Reg Cumulative Impact

During Chairman Gensler’s as-always contentious HFSC hearing today, Rep. Barr (R-KY) asked if the SEC is in consultation with the Federal Reserve regarding the combined CRE effects of recent SEC proposals and the Basel III endgame standards (see Client Report CAPITAL234).

Carstens Says Law Must Catch Up To CBDC

BIS General Manager Agustín Carstens today emphatically called for rapid development of clear CBDC legal frameworks based on defined rights and obligations for privacy, AML compliance, and user choice.

Daily092723.pdf…