#G20 – Page 2 – Federal Financial Analytics

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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13 07, 2022

DAILY071322

Eliza Allen2023-01-06T15:18:57-05:00July 13th, 2022|2- Daily Briefing|

Small Business Committee Urges Fintech Transparency, New CFPB Role in Fintech Lending

Today’s Small Business Subcommittee on Oversight, Investigations, and Regulations hearing on fintech transparency focused on financial practices that may harm small businesses’ access to credit.

HFSC Party Lines Form on CRA Rewrite

As anticipated, the Subcommittee on Consumer Protection and Financial Institutions today held a hearing examining the banking agencies’ proposed rule to modernize the CRA (see FSM Report CRA32).

Fed Proposes Debit-Card, Payment-System Data Collections

Although the Fed has yet to finalize a controversial proposal related to debit-interchange fees (see FSM Report INTERCHANGE8), it has proposed changes to how it collects debit-card information essential to implementing changes to network selection and, should it come to do so, fee calculations.

FSB Chair Reiterates Need for Crypto Regulation, Highlights Progress on Climate Roadmap

FSB Chair Klaas Knot’s letter today to the G20 ministerial reiterated all the points regarding COVID exit strategies, regulation of cryptoassets, and executing FSB’s climate roadmap outlined after June’s plenary meeting.

Senate Democrats Demand More Stringent, Binding Fed Ethics Standards

Senate Banking Committee Chairman Sherrod Brown (D-OH) joined by four other Democrats today sent a letter to Chairman Powell again calling for more stringent, enforceable Fed ethics standards, and reminded Mr. Powell in strongly-written arguments about the need to do so via binding regulation or by the kind of statutory change they have already introduced.

Global Regulators Press for Global Stablecoin Payment-Risk Standards

Doubtless spurred by FSB requests and market …

7 07, 2022

DAILY070722

Eliza Allen2023-01-24T15:30:00-05:00July 7th, 2022|2- Daily Briefing|

IOSCO Releases 2022-2023 Crypto Roadmap

IOSCO today released its Crypto-Asset Roadmap for 2022-2023, outlining two work plans on crypto- and digital assets on DeFi.

Basel Reaffirms Proportionate Policy

The Basel Committee today released high-level “considerations” on proportionality – i.e., how to apply its standards taking account of a bank’s size and complexity.

CFPB Demands Tighter Reporting-Data Controls

Using another advisory to issue what some may consider a rulemaking, the CFPB today threatened to pursue criminal penalties if credit-report data are not used for permissible purposes (i.e., for credit, housing, employment or insurance decisions).

FSB Report Promotes LEI Adoption for Cross-Border Payments

The FSB today issued a report recommending that G20 members promote Legal Entity Identifier (LEI) adoption, aiming particularly at cross-border payments.

Treasury Releases International Crypto Engagement Framework

As demanded by President Biden’s digital asset executive order (see Client Report CRYPTO26), Treasury in consultation with the State Department, Commerce, and USAID today released a framework for international engagement on digital assets.

Democratic Senators Demand More from Zelle on High-Profile Fraud Allegations

Sens. Menendez (D-NJ), Warren (D-MA), Reed (D-RI) and five Democratic colleagues today ramped up their attack on the extent to which Zelle properly handles payment fraud.

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9 06, 2022

DAILY060922

Eliza Allen2023-01-27T15:47:44-05:00June 9th, 2022|2- Daily Briefing|

FSB, IMF Close One Data-Gap Project, Open Next Phase

In a joint report today, the FSB and the IMF reported progress on closing financial data gaps, closing the second phase of the Data Gaps Initiative called for by the G20 in 2009. The project identified these gaps in the wake of the financial crisis, with phase two specifically addressing increasing data collection on financial stability risks and interconnections, as well as enhancing communication of financial statistics. The organizations state that data gaps have closed considerably on financial soundness indicators, G-SIFIs, non-bank intermediation, and other financial stability risks.

IMF Staff Assess Green CBDC Options

A new IMF paper concludes that Proof of Work-based DLT applications should not define any payment system transformation prioritizing reduced energy consumption, including CBDC. Although CBDC could be designed to be more energy efficient than the current payment system, the ultimate energy efficiencies and environmental benefits of CBDC will depend on the design priorities of the issuing central bank.

BIS Officials Caution re “Green Bubbles”

In an article today, top BIS officials highlighted the potential risk of “green bubbles” and stressed the limits of the financial industry’s ability to reduce climate risk. The article states that the financial sector faces the same misalignment of incentives as other industries, with the current generation bearing the costs of a green transition that will mainly benefit future generations.

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21 04, 2022

DAILY042122

Eliza Allen2023-03-02T10:35:34-05:00April 21st, 2022|2- Daily Briefing|

G20 Ministerial Ends in Disarray

The G20 finance ministerial yesterday was chaotic in ways not captured even by the public walk-out to protest Russia’s invasion well highlighted in recent media coverage. In fact, the ministerial failed to result in even the usual bland communique that summarizes discussions and details agenda items in increasingly general and non-binding terms.

CFPB Pursues Another “Repeat Offender” with Court Action

Continuing the CFPB’s commitment to tackle “repeat offenders”, the Bureau and New York Attorney General today filed a suit against MoneyGram alleging that the company – despite prior enforcement actions – stranded customers waiting for their money, botched error-resolution instructions, and lacked policies and procedures to ensure compliance.

Powell Ducks Globalization Debate

At a debate session today during the IMF annual meeting, Chairman Powell reiterated prior statements on monetary policy, for example that a fifty basis point rate hike may be appropriate, a point reinforced by his comment that the U.S faces higher core inflation than the E.U. even though the E.U. has higher price increases in food and energy costs.

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20 04, 2022

DAILY042022

Eliza Allen2023-03-02T10:41:49-05:00April 20th, 2022|2- Daily Briefing|

FSB Targets Commodity Markets, Prime Brokers

In his letter today to G20 ministers, FSB head Klaas Knot observes remarkable financial resilience to date but states that many worrisome concerns remain.

U.S. Expands Demands for New International Financial Order

Building on her comments last week outlining a new international financial order, Treasury Secretary Yellen today called on the World Bank and its related organizations to go beyond current activities to address the cross border risks resulting from climate change, health , migration, and “fragility.”

US Expands Sanctions Reach to Payments, Crypto

The U.S. today took two first-time actions in sanctioning Russia with far-reaching implications for the future of money and payments. It named Transkapitalbank as a sanctioned entity, not so much because it is a Russian bank, but because it has been found to facilitate sanctions evasion by virtue of Russia’s effort to create an alternative payment messaging service to get around SWIFT.

GOP Tries Again to Halt Postal-Banking Pilot

Continuing their strong opposition to postal banking, Ranking HFSC Member McHenry (R-NC), Ranking Oversight and Reform Committee Member Comer (R-KY), and Ranking Consumer Protection and Financial Institutions Subcommittee Member Luetkemeyer (R-MO) today sent a letter to Postmaster General Louis DeJoy slamming USPS for overstepping its statutory authority by extending what they call its “failed” postal-banking pilot program.

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31 03, 2022

DAILY033122

Eliza Allen2023-03-27T14:51:11-04:00March 31st, 2022|2- Daily Briefing|

FSB Stays Its Course

The FSB today officially published its 2022 work plan, making only one change in terms of topics and timing from the plan detailed in a February letter to G20 finance ministers and central bankers.

HFSC Democrats Don’t Like Overdrafts, But No Action Imminent

As anticipated, today’s HFSC Consumer Protection Subcommittee hearing reviewed Democratic complaints about overdraft fees and a general Republican defense of the importance of the private sector in setting consumer-finance charges.

Sanctions Now Reach Sectors

Treasury’s OFAC today sharply expanded U.S. sanctions against the Russian Federation.

Gensler Tackles Climate Disclosures, Crypto

Noting that the SEC is focused on disclosures, not the “merit” of what issuers may do, SEC Chairman Gensler today defended the controversial Scope 3 climate-risk disclosures, calling them “layered” because mandatory upstream and downstream disclosures would only be required if exposures are material or if a company had made a risk-reduction commitment.

GOP Bill Would Ban CBDC

Clearly still laying out the CBDC political divide, Sens. Cruz (R-TX), Braun (R-IN), and Grassley (R-IA) have introduced S. 3954, legislation essentially barring a retail-focused CBDC if it serves – as the senators expect – as a “financial surveillance tool.”

Thompson Open to FHLB Inquiry, New Mortgage Product

In the wake of another op-ed questioning the purpose of the home loan bank system, acting FHFA director Thompson said today that the creation of an advisory committee to review the system is a “great idea” to which she is open, saying also …

15 03, 2022

DAILY031522

Eliza Allen2023-04-03T14:45:47-04:00March 15th, 2022|2- Daily Briefing|

House Readies Still Tougher Sanctions

Thursday’s HFSC mark-up will advance a series of bills ramping up sanctions designed as amendments to the omnibus legislation advancing through Congress to punish Russia and targeted allies. We expect all these bills to pass by wide margins, with additional measures added after tomorrow’s speech from Ukraine’ president; we will provide clients with an in-depth report of the mark-up and other actions related to financial markets.

What’s Next at the Fed

As anticipated, Sarah Bloom Raskin has reportedly withdrawn her nomination following indication from Sen. Manchin (D-WV) and two moderate Republicans that they will oppose her confirmation. Although this might clear the nominations of Chairman Powell, Gov. Brainard, Lisa Cook, and Phillip Jefferson, this will occur only if Chairman Brown (D-OH) is willing to sacrifice leverage over the next nomination for the supervision vice chair.

More on What’s Next for the Fed

President Biden’s statement today on Ms. Raskin’s withdrawal clarifies the outlook detailed in our alert earlier this afternoon. After praising the nominee, the president urges the Senate to quickly confirm Mr. Powell, Ms. Brainard, Ms. Cook, and Mr. Jefferson.

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22 02, 2022

Daily022222

Arezou Rafikian2023-04-04T15:32:15-04:00February 22nd, 2022|2- Daily Briefing|

CFPB Reiterates Need for Small-Business ECOA Reporting

The CFPB has reiterated its plans to quickly enact new rules requiring small-business lender reporting (see FSM Report FAIRLEND7), asserting that demographic and pricing data are necessary to ensure fair credit to otherwise under-served small businesses. T

G20 Ministerial Frets re Central Banks, CBDC, Climate, NBFIs

Perhaps the most interesting aspect of the G20 finance ministerial communiqué is the new assertion that crafting effective exit strategies is not only critical to sustained and stable macroeconomic growth, but also to central-bank “credibility.” We have been tracking growing concerns about central-bank credibility, and its relation to central-bank independence in connection with work related to Karen Petrou’s book.

FSB Looks for New Distressed-Debt Options Ahead of Lots More Debt

The FSB has issued a new discussion paper seeking ways to exit widespread forbearance and central-bank programs during the pandemic that have increased the likelihood that highly-indebted corporate borrowers will experience severe distress as interest rates rise. Although these concerns are particularly acute in the EU, where “zombie” borrowers have been a major market presence since 2008, they are also a growing concern in the U.S. and elsewhere due to the sharp run-up in highly leveraged corporate finance along with the sharp growth in private-capital structures.

Agencies Give All-Clear for Special Credit

The banking agencies, CFPB, FHFA, NCUA, and the Departments of Justice and HUD today issued a statement on special-purpose credit programs.

Daily022222.pdf…

17 02, 2022

DAILY021722

Eliza Allen2023-04-04T15:48:56-04:00February 17th, 2022|2- Daily Briefing|

FSB Details Work on NBFIs, Climate, Crypto

In his first letter to G20 finance ministers and central bankers, Chairman Klaas Knot of The Netherlands reiterated work on longstanding FSB priorities (i.e., ensuring resilience and a smooth post-pandemic transition). Pending actions include a mid-year report on ways to ensure inclusive financial recovery and continuing work on MMFs, open-end funds, margining, bond-market liquidity, and EME dollar-funding vulnerabilities. Near-term work will also revisit 2017 standards on asset-management liquidity (see FSM Report ASSETMANAGEMENT6) and create a set of systemic-risk tools focused on NBFIs.

FSI Counters FSB plans for Climate Macroprudential Standards

Although the FSB chairman earlier today argued in favor of climate-risk macroprudential standards, a report from the BIS’s Financial Supervision Institute today concludes that doing so would be ineffective and even counter-productive. This is due to uncertainty about the extent to which climate-risk systemic implications may already be well addressed in current macroprudential standards or to those now under development with specific regard to individual institutions. The FSI, for example, notes the data challenges that also trouble the OCC (see FSM Report GREEN12) and other U.S. regulators, arguing against any near-term binding capital or prudential standards in this arena.

Daily021722.pdf…