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5 10, 2022

DAILY100522

2022-10-05T16:59:59-04:00October 5th, 2022|2- Daily Briefing|

GOP Demands AG’s CBDC Ruling

HFSC Republicans today sent a letter to Attorney General Merrick Garland demanding a copy of the DoJ’s assessment on whether legislation is necessary to issue a CBDC required and due on September 5 by the President’s crypto executive order (see Client Report CRYPTO26).  Citing both Congress’ exclusive authority to coin money and Chairman Powell’s (see Client Report FEDERALRESERVE71) and Vice Chair Brainard’s (see Client Report CBDC13) ambiguous discussion of what constitutes CBDC “approval,” the Republicans reiterate that the Fed does not have the authority to issue a CBDC under current law.

Basel Blesses Counter-Cyclical Buffers

Following the FSB’s directive, the Basel Committee today issued a newsletter on counter-cyclical capital buffers (CCyBs) and a detailed report on capital and liquidity buffers.  The FSB has posited that one reason for both bank resilience and pandemic-related credit shortages was the unwillingness of banks to dip into buffers.  As we noted recently, Treasury Under Secretary Liang praised CCyBs and Basel’s newsletter reaches the same conclusion.  However, the detailed report finds that CCyB release had a weaker, albeit discernible, effect than express regulatory decisions to allow banks to use their capital buffers.

Daily100522.pdf

11 05, 2022

DAILY051122

2023-02-21T15:33:13-05:00May 11th, 2022|2- Daily Briefing|

HFSC re FSOC: SIFIs, Climate, Stablecoins, Lots More

Looking ahead to tomorrow’s HFSC hearing with Secretary Yellen, the Democratic staff memo suggests that this session will track much of what occurred yesterday at Senate Banking (see Client Report FSOC26): i.e., discussion of the need for stablecoin legislation, the role of SIFI designation, and the overall risks presented by higher inflation, Russia, China, and climate change.

Basel Plans Wholesale Review of Post-GFC Regulatory Regime

The head of the Basel Committee, Pablo Hernández de Cos, today announced a full-scale evaluation of the Basel III construct set for release later this year.  The report will evaluate complexity, regulatory interactions and systemic-risk dynamics, focusing on capital, liquidity, leverage, and macroprudential elements of the Basel III reforms.  The report will also evaluate resilience and financial-activity behavioral incentives.

FSB Plans Commodity, Climate, Crypto Agenda

In remarks today, FSB head Klaas Knot reiterated ongoing concern about commodity markets and continuing financial-market resilience despite stress absorption since Russia first invaded Ukraine.  Mr. Knot is also concerned that some banks are generally over-leveraged and those with prime brokers may be at particular risk.

Daily051122.pdf

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