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19 12, 2022

DAILY121922

2022-12-19T16:49:50-05:00December 19th, 2022|2- Daily Briefing|

JEC Report Calls for Crypto Regulation

The Joint Economic Committee (JEC) released a report late Friday arguing that recent contraction in the digital-asset market demonstrates the need for more regulation.  While it does not outline specific policy changes, the report asserts that new regulations must strive to keep digital assets separate from the broader economy to prevent contagion, as well as ensure that investors are properly informed on digital asset’s individual risks.

KC Fed Discounts SLR Relief as Solution to ONRRP Growth

A Friday brief from the Kansas City Fed concludes that limited money-market investment opportunities, policy uncertainty, and ONRRP changes such as easier eligibility better explain the sharp increase in ONRRP than bank-capital shortages as deposits flowed to MMFs.  As a result, the paper concludes that reinstating SLR exemptions for central-bank deposits and Treasury obligations would not materially affect bank use of the ONRRP and thus facilitate Fed balance-sheet reduction.

McHenry Tees Up Fintech Action for New Congress

Incoming Chairman McHenry (R-NC) today reintroduced legislation designed to facilitate financial innovation, kicking off his chairmanship’s focus on fintech, crypto, and other financial technology related matters.  The bill does not address priority policy questions in this contentious arena, instead creating a pathway for financial innovators to request information on whether they are eligible for exemptions from relevant regulations from the banking agencies and CFPB.

Daily121922.pdf

23 08, 2022

DAILY082322

2023-01-04T10:40:24-05:00August 23rd, 2022|2- Daily Briefing|

Life Insurers Depend on FHLB Advances for Stress Liquidity, Long-Term Funding

Reflecting longstanding fears about life-insurance run-risk (see Client Report SYSTEMIC92), a new research note from the Federal Reserve finds that life insurers were quick to establish liquidity buffers when Covid hit in 2020, largely doing so via FHLB advances and interest-rate derivative margins.

JEC Financial Inclusion Report Calls for Postal Banking, Crypto Regulation

The Joint Economic Committee yesterday afternoon released a report on the barriers that people of color and low-income communities face accessing financial services, concluding that traditional banks discriminate, new nonbank offerings may prove predatory, and policy solutions are essential.

OFR: Lower-Risk Hedge Funds Lead to Higher Treasury-Market Stress

A new OFR working paper finds that changes in aggregate hedge fund exposures are related to Treasury yield changes in economically and statistically significant ways, with managed futures and multi-strategy funds having the highest impact on Treasury prices.

FHFA Advances Equity Campaign with New Committee

Building on its equitable housing campaign, FHFA today announced an advisory committee on affordable, equitable, and sustainable housing.  It will provide analysis focused on Fannie, Freddie, and the FHLBs in areas such as the barriers to and need for regulatory or policy changes to expand affordable, equitable, and sustainable housing.

Daily082322.pdf

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