#G7

18 04, 2024

DAILY041824

2024-04-18T17:08:48-04:00April 18th, 2024|2- Daily Briefing|

G7 Backs NBFI Reform

Although prioritizing Ukraine and broad statements about the global economy, the new statement from G7 finance ministers and central bankers also emphasizes the need to pursue the kind of NBFI reforms advanced yesterday by the FSB.

Bowman Battles New Liquidity Regs

FRB Gov. Bowman today reiterated her conviction that sufficient contingency funding should be a matter between banks and supervisors, not a cause for new rules.

Brown, Reed Press Big Banks on Wire Transfer Fraud

Building on their longstanding campaign pressing banks on Zelle, Senate Banking Chair Brown (D-OH) and Sen. Reed (D-RI) today sent letters to the CEOs of JP Morgan, Wells Fargo, Bank of America, and Citi stating that banks have a responsibility to proactively monitor and prevent fraudulent wire transactions and should reimburse customers when these obligations are not met.

House Select Committee Targets Index-Fund Chinese Investments

Building on its prior report pressing financial institutions to address exposures to China and potential systemic risks, the House Select Committee on the CCP today released a bipartisan report sharply criticizing index-fund and asset managers for investing American savings in sanctioned Chinese companies associated with the PLA and/or human-rights abuses.

Daily041824.pdf

5 04, 2023

DAILY040523

2023-04-05T16:55:56-04:00April 5th, 2023|2- Daily Briefing|

FDIC Joins CFPB Targeting UDAP

The FDIC today published Consumer Compliance Supervisory Highlights showing that UDAP violations related to NSF representment constituted the second highest number of total citations and were by far the largest number of serious citations in 2022.  The FDIC reiterates August guidance that third-party arrangements related to re-presented items may present numerous risks.  We note that the FDIC’s UDAP focus is new under Chairman Gruenberg and comes at a time when the CFPB is expanding the reach of its own UDAAP enforcement powers with a focus in part on overdrafts and NSF practices.

IMF Staff Highlight New Systemic Risk: Geopolitical Stress

At a panel event today, IMF staff reported that their model-based study in the IMF’s global financial stability report found that geopolitical risks and global fragmentation gravely threaten financial stability by weakening interconnectivity between geopolitical blocs.  Their model found that increased fragmentation results in reduced cross-border banking between blocs, higher lending costs, substantial diversification losses among G7 countries, and reduced bank profitability.  Staff also drew a link between the war in Ukraine and the recent banking crisis, arguing that the war’s inflationary pressures led to an aggressive monetary policy reaction, revealing bank vulnerability to interest rate risk.

Daily040523.pdf

20 05, 2022

DAILY052022

2023-02-21T14:11:57-05:00May 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.

Daily052022.pdf

9 05, 2022

DAILY050922

2023-03-01T13:21:36-05:00May 9th, 2022|2- Daily Briefing|

U.S. Adopts Powerful Back-Door Campaign vs. Shell Companies, Trusts

In conjunction with a G-7 statement strongly condemning Russia, Treasury took an innovative move to address shell companies linked to the Russian Federation even as FinCEN’s beneficial-ownership rules remain bogged down.

Hsu Promises Deal-By-Deal Review of Large Regional M&A Pending Broad, Forward-Looking Policy

Citing changes in both U.S. banking and inequality since the last round of merger-policy statements in 1995, Acting Comptroller Hsu today called for a new policy that is neither pro- nor anti-merger but rather determines which larger mergers are “good” transactions so that only risky ones are rejected.

SEC Bows to Critics with Longer Comment Periods

In a significant concession to Congressional Republicans and industry critics, the SEC today extended the comment period for two of its most controversial initiatives.  The deadline for comments on its climate-risk disclosures is moved forward by twenty-eight days to June 17.

CFPB Takes Administrative Action Expanding ECOA Reach, Lender Risk

Living up to its promise on Friday to address structural racism, the CFPB today issued a new advisory extending its fair-lending enforcement scope under the ECOA to all aspects of a credit transaction, not just loan origination or servicing.

Daily050922.pdf

14 03, 2022

M031422

2023-04-03T15:09:09-04:00March 14th, 2022|6- Client Memo|

The Collapse of the Global Financial Order and What’s to Come

The Great Depression’s role sparking the Second World War led the victors to create the Bretton Woods agreement establishing stable reserve assets under-girding a world prosperous and peaceful enough to prevent another conflagration.  After 2008, the world reinforced another set of global norms, setting cross-border financial standards over the next fifteen years by newly empowered transnational financial agencies.  Now, what was left of Bretton Woods is in ashes and national geopolitical interests will again dictate critical financial requirements.  Although it’s of course possible that Russia’s devastating invasion will end without still more cataclysmic carnage, it has done irreparable damage to the largely frictionless cross-border finance on which it and its oligarchs relied.  China should take a lesson.

m031422.pdf

14 03, 2022

Karen Petrou: The Collapse of the Global Financial Order and What’s to Come

2023-04-03T15:09:21-04:00March 14th, 2022|The Vault|

The Great Depression’s role sparking the Second World War led the victors to create the Bretton Woods agreement establishing stable reserve assets under-girding a world prosperous and peaceful enough to prevent another conflagration.  After 2008, the world reinforced another set of global norms, setting cross-border financial standards over the next fifteen years by newly empowered transnational financial agencies.  Now, what was left of Bretton Woods is in ashes and national geopolitical interests will again dictate critical financial requirements.  Although it’s of course possible that Russia’s devastating invasion will end without still more cataclysmic carnage, it has done irreparable damage to the largely frictionless cross-border finance on which it and its oligarchs relied.  China should take a lesson.

To be sure, this globalized and increasingly financialized construct was imperfect even for the hegemonic states and systemic financial companies in whose interests it worked the best.  As Rana Foroohar pointed out last week, it was premised on the optimistic “end of history” reasoning that expected an interdependent world to be all-for one and one-for-all.  Quite simply, if you must go through someone else’s space to get where you want to go, then you are more likely to abide by the rules applicable in that space to ensure you get there.  Over time, this creates a macrofinancial system in which currencies, payments, assets, and risks moved with few speedbumps from one end of the earth to the other.  Even where rules might slow all of this down, safe-haven states constructed high-price bypasses.  This, …

11 03, 2022

DAILY031122

2023-04-03T15:14:45-04:00March 11th, 2022|2- Daily Briefing|

US, G7 Fragment Global Financial Construct to Sanction Russia

Heightening sanctions to a still more unprecedented level, the President has issued a new set of Russian sanctions and the U.S., along with the rest of the G7, announced today that both the World Bank and IMF will be pressed to deny Russia borrowing privileges, which are rarely – if ever – denied for overtly political reasons.

Daily031122.pdf

20 10, 2021

FedFin on: Global CBDC Policy

2023-06-07T15:35:08-04:00October 20th, 2021|The Vault|

Shortly after the BIS and a group of central banks endorsed a construct for retail-facing central-bank digital currency (CBDC), the Group of Seven (G7) finance ministerial issued these public-policy principles to establish a still broader framework for future action.  No G7 nation, including the U.S., has decided on CBDC, but their governments have generally developed these documents to ready themselves, enhance the odds of CBDC better suited to cross-border clearing and settlement, anticipate private stablecoins and the risks they raise, as well as counter China’s efforts to build a CBDC that enhances its global macroeconomic might.

The full report is available to retainer clients. To find out how you can sign up for the service, click here.…

20 10, 2021

CBDC9

2023-06-07T15:35:02-04:00October 20th, 2021|1- Financial Services Management|

Global CBDC Policy

Shortly after the BIS and a group of central banks endorsed a construct for retail-facing central-bank digital currency (CBDC), the Group of Seven (G7) finance ministerial issued these public-policy principles to establish a still broader framework for future action.  No G7 nation, including the U.S., has decided on CBDC, but their governments have generally developed these documents to ready themselves, enhance the odds of CBDC better suited to cross-border clearing and settlement, anticipate private stablecoins and the risks they raise, as well as counter China’s efforts to build a CBDC that enhances its global macroeconomic might.

CBDC9.pdf

14 10, 2021

Daily101421

2023-06-07T16:17:21-04:00October 14th, 2021|2- Daily Briefing|

G7 Presses CBDC, Cross-Border Payment Work; Disparages Stablecoin
G7 finance ministers today released policy-setting statements on digital payments and CBDC. Building on recent BIS work (see Client Report CBDC6) essentially endorsing retail-facing CBDC, the G7 points to CBDC’s considerable benefits as long as the questions also addressed by the BIS are successfully answered in member jurisdictions.

Global Climate-Risk Disclosures Advance
The FSB’s Task Force on Climate-related Financial Disclosures (TCFD) today reported that private-sector adoption of TCFD-aligned disclosures is accelerating, with over fifty percent of firms now disclosing climate-related risks and opportunities.

Cash-Acceptance Mandate Faces GOP Opposition
Continuing debate on the merits of mandating cash acceptance (see Client Report MERGER7), HFSC’s Oversight Subcommittee Chairman Green (D-TX) and Ranking Member Emmer (R-MN) remain diametrically opposed to mandating acceptance.

Daily101421.pdf

Go to Top