#Omarova – Federal Financial Analytics

1 02, 2022

AI013122

Eliza Allen2023-04-05T14:17:39-04:00February 1st, 2022|3- This Week|

TROUBLE AHEAD

Although we anticipated a significant confirmation fight for Sarah Bloom Raskin (see Client Report FEDERALRESERVE66), it’s getting uglier not only for her but also one of the lower-profile Fed nominees, Lisa Cook. Indeed, all three face a new challenge from Ranking Member Toomey (R-PA): the legality of their appointments. We doubt this hearing will take on the particularly nasty tone of that for OCC-nominee Omarova (see Client Report REFORM210) and it’s likely to be even more partisan. Still, as we’ll assess following the hearing, each nominee will surely earn their job at this session if they win confirmation.

AI013122.pdf…

30 11, 2021

FEDERALRESERVE64

Arezou Rafikian2023-05-23T14:42:56-04:00November 30th, 2021|5- Client Report|

Powell Threads His Way Through Macro, Monetary, Regulatory Challenges

Most of the news at today’s Senate Banking hearing revolves around Chairman Powell’s concession that inflation may not be transitory and economic growth is now so robust that quantitative tightening might proceed more quickly than planned, pandemic permitting. Mr. Powell was pressed on this dramatic turn-around, but none of the questioning appears to dim his chances for rapid confirmation. Secretary Yellen focused her comments on fiscal stimulus and the debt ceiling. In this report, we analyze in depth financial-policy issues, addressing issues such as CBDC, stablecoin, LIBOR transition, and economic inequality.

FEDERALRESERVE64.pdf…

19 11, 2021

AL112221

Arezou Rafikian2023-05-23T15:32:34-04:00November 19th, 2021|3- This Week|

We Shall See

When President Biden first nominated Saule Omarova as Comptroller of the Currency, Karen Petrou called it an effort at a classic Washington political package in which the Administration bowed to progressives on the OCC slot to get them to back off their opposition to Chairman Powell. It of course didn’t work, with Sen. Warren (D-MA) immediately branding Mr. Powell a “dangerous man” to make very, very clear that she hadn’t bought into a deal even if other key senators were willing to do so. What’s next?

AL112221.pdf…

18 11, 2021

REFORM210

Arezou Rafikian2023-05-25T16:00:56-04:00November 18th, 2021|5- Client Report|

Omarova Nomination Threatened

As expected, today’s hearing with Comptroller-nominee Saule Omarova included an unprecedented amount of fireworks for what is normally a low profile appointment. In this report, we omit analysis of the debate on Ms. Omarova’s origins and alleged Marxism, instead assessing policy issues germane should Ms. Omarova succeed in what seems an increasingly difficult confirmation. Notably, moderate Democrats such as Sens. Tester (D-MT) and Warner (D-VA) were clearly concerned with Ms. Omarova’s opposition to the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA), while Republicans lambasted her for previous comments about cutting off credit to the oil and gas industry and proposals they believed would nationalize U.S. banking.

REFORM210.pdf…

18 11, 2021

FedFin on: Omarova Nomination Threatened

Arezou Rafikian2023-05-25T16:01:16-04:00November 18th, 2021|The Vault|

As expected, today’s hearing with Comptroller-nominee Saule Omarova included an unprecedented amount of fireworks for what is normally a low profile appointment. In this report, we omit analysis of the debate on Ms. Omarova’s origins and alleged Marxism, instead assessing policy issues germane should Ms. Omarova succeed in what seems an increasingly difficult confirmation. Notably, moderate Democrats such as Sens. Tester (D-MT) and Warner (D-VA) were clearly concerned with Ms. Omarova’s opposition to the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA), while Republicans lambasted her for previous comments about cutting off credit to the oil and gas industry and proposals they believed would nationalize U.S. banking.

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

16 11, 2021

Daily111621

Arezou Rafikian2023-05-26T10:56:42-04:00November 16th, 2021|2- Daily Briefing|

Basel Proposes Global Climate-risk Management, Supervision Principles
As anticipated, the Basel Committee today proposed climate-risk management and supervision principles sure to guide both the Fed and OCC, even in just proposed form, as the U.S. agencies finalize near-term U.S. guidance in this high-priority arena.

FRB-NY Staff: U.S. Banks Now Even More Resilient
A new post from the Federal Reserve Bank of New York’s blog assesses bank resilience through the pandemic, concluding that large banks are even more resilient now than before thanks to post-2008 rules and post-2020 market backstops.

HFSC Republicans Condition CBDC on Stablecoin, Private Sector
HFSC Republicans have now laid out their principles for any U.S. CBDC, demanding that any Fed-issued CBDC maintain the U.S. Dollar’s reserve currency status and the U.S. payment system’s preeminence.

Senate GOP Tackles USPS Banking Pilot Program
Senate Banking Ranking Member Toomey (R-PA) today described postal banking as about the worst possible idea. Joined by other Republicans, Mr. Toomey wrote to the Postmaster General, questioning USPS authority to offer its recent pilot and challenging its mission-relevance.

CFPB Plans HMDA-Data Do-Over
Reflecting the President’s executive order on racial equity, the CFPB has now accelerated its fair-lending efforts with a request for views on how best to retool HMDA to better prevent mortgage discrimination.

FRB Presidents: Fund-Access, Financial-Literacy Improvements Needed
At today’s racism and the economy virtual event hosted by the Minneapolis Fed, FRB Atlanta President Bostic highlighted work by his Reserve Bank’s Special Committee on Payments Inclusion to show the Fed’s dedication in this …

15 11, 2021

Karen Petrou: The Real Problem in the Omarova Hearing

Arezou Rafikian2023-06-01T13:46:35-04:00November 15th, 2021|The Vault|

Later this week, the Senate Banking Committee will hold Saule Omarova’s confirmation hearing for Comptroller of the Currency. Many expect this to be a knock-down, drag-out between the progressive bank-reform agenda and the banking industry’s antipathy thereto. This it surely will be, but to watch only these fireworks is to miss the longer-burning fire below: renewed questions about whether banks are public utilities or private companies with unique privileges fully reimbursed by virtue of unduly-burdensome regulation. It is by this choice — not Ms. Omarova’s most-uncertain confirmation — that the future of U.S. finance will be decided.

Although Ms. Omarova has surely moved on from the Marxist views of which she is accused based on an early academic paper, she clearly sides with those who think that banking is for public purpose, not private profit. Indeed, according to at least some of her work, banking can’t be trusted to banks and thus should be seconded to the federal government or outside experts presumed to be not just objective, but also disinterested in all but the public good.

This is not a new view. After the S&L crisis of the 1980s and the subsequent banking debacle in the early part of the next decade, much was made of the subsidy banks were said to enjoy from unique access to FDIC insurance and the Fed’s discount window. Bankers strongly disputed any subsidy, but I said then and believe now that banks then indeed enjoyed special-purpose charters that warranted not just tough safety-and-soundness …

12 11, 2021

Al111521

Arezou Rafikian2023-06-01T13:48:22-04:00November 12th, 2021|3- This Week|

You Have to Really Want the Job

On Thursday, Senate Banking will convene for what will surely be a thoroughly contentious confirmation hearing for Saule Omarova as Comptroller of the Currency. Karen Petrou’s forthcoming memo will focus on the long-term impact of the issues at stake in this debate. Here, we turn to the questions not only that will put Professor Omarova on any number of hot seats, but also provide key insights into emerging Senate Banking actions.

Al111521.pdf…

3 11, 2021

Daily110321

Arezou Rafikian2023-06-02T12:54:06-04:00November 3rd, 2021|2- Daily Briefing|

Fed Acknowledge Climate Threat, Avoids Near-Term Commitments
The Federal Reserve today supported the most recent NGFS statement on global central-bank climate initiatives, emphasizing that the global statement allows each central bank to tailor its climate-risk efforts to its mandate and that the Fed’s mandate circumscribes efforts it recognizes to be of great importance.

Omarova Nomination Clears Formal Hurdle
Late yesterday, the White House officially nominated Saule Omarova as the next Comptroller of the Currency. As previously noted, we view this appointment to be part of a larger political negotiation over Jay Powell’s second term and the broader slate of Fed nominees.

Comment Date Set for FHFA Capital-Disclosure Proposal
The Federal Register today includes FHFA’s proposed capital-disclosure regime for Fannie and Freddie, with comment now due January 3. As previously noted, the proposed disclosures would better align the GSEs’ releases with those mandated for large banks, requiring transparency regarding standardized approach, operational, market, and leverage capital requirements.

OCC Climate Guidance Imminent
In his statement today supporting the NGFS Glasgow Declaration (see our earlier alert), Acting Comptroller Hsu expands on his comments about FSOC’s climate-risk report (see Client Report GREEN11).

Powell: Fed No Longer Contemplating SLR Rewrite
While FRB Chair Powell’s press conference today largely focused on the economy and monetary policy, he was also asked if the Fed still plans to seek comment on ways the SLR could be adjusted to increase Treasury-market liquidity.

Daily110321.pdf…

6 10, 2021

Daily100621

Arezou Rafikian2023-06-20T16:34:10-04:00October 6th, 2021|2- Daily Briefing|

Toomey Continues GOP Attack on Comptroller Nomination
Making clear Senate Banking Republicans intend to give Comptroller-nominee Omarova no quarter, Ranking Member Toomey (R-PA) today requested a copy of her college thesis authored while Ms. Omarova was studying at Moscow State University.

Carstens Reiterates: Big Tech Demands Entity-Based Rules
Although U.S. policymakers have yet to reckon with big tech in financial services, global regulators continue to advance plans for new rules to govern the sector, with BIS General Manager Agustín Carstens today reiterating the need for entity-based rules.

BIS, IOSCO: FMI Principles Apply to Systemically-Important Stablecoins
The BIS Committee on Payments and Market Infrastructures (CPMI) and IOSCO today issued for consultation guidance on the application of their Principles for Financial Market Infrastructures (PFMI) to stablecoin arrangements.

Daily100621.pdf…