#Raskin – Page 2 – Federal Financial Analytics

14 02, 2022

m021422

Arezou Rafikian2023-04-04T16:07:21-04:00February 14th, 2022|6- Client Memo|

Two Regulatory Decisions That Will Define the Future of Money

Like all of you, we at FedFin spend a lot of time watching the U.S. Congress, but I’m increasingly wondering why. Sure, there’s the blood and guts. Watching Congressional deliberations is more and more like being a spectator at a hockey game for the fights or NASCAR races for the next fiery crash. Does any of this carnage really matter? Not much when it comes to vital, urgent financial policy questions such as what money has come to be in the United States. With Congress mired in a never-ending cock fight, regulators hold the fate of finance mostly in their own fierce grip. Even without deployment of the Fed’s nuclear CBDC option, two developments last week show clearly how much power regulators have to redefine U.S. digital currency.

m021422.pdf…

14 02, 2022

Karen Petrou: Two Regulatory Decisions That Will Define the Future of Money

Arezou Rafikian2023-04-04T16:07:34-04:00February 14th, 2022|The Vault|

Like all of you, we at FedFin spend a lot of time watching the U.S. Congress, but I’m increasingly wondering why. Sure, there’s the blood and guts. Watching Congressional deliberations is more and more like being a spectator at a hockey game for the fights or NASCAR races for the next fiery crash. Does any of this carnage really matter? Not much when it comes to vital, urgent financial policy questions such as what money has come to be in the United States. With Congress mired in a never-ending cock fight, regulators hold the fate of finance mostly in their own fierce grip. Even without deployment of the Fed’s nuclear CBDC option, two developments last week show clearly how much power regulators have to redefine U.S. digital currency.

First, there was outgoing FDIC Chair McWilliams’ offhand suggestion in her final remarks that stablecoins have all the characteristics of fiat currency deposits and thus could be eligible for FDIC insurance under current law. As soon as he took the helm, Acting FDIC Chairman Gruenberg demanded tough cryptocurrency regulation, but he didn’t rule out deposit status for at least some stablecoins if the agency was satisfied with their stability.

The impact of an FDIC decision deeming at least some stablecoins to be deposits is hard to over-estimate. As I detail in my book, what’s actually in a bank deposit isn’t what most people think they hold, i.e., a virtual pile of dollars. In fact, money in the bank is …

10 02, 2022

DAILY021022

Eliza Allen2023-04-05T09:57:51-04:00February 10th, 2022|2- Daily Briefing|

KC Fed: 2020 Capital-Distribution Constraints Worked
Touching on a subject of considerable sensitivity as well as a policy issue subject to change under a new Fed, the Kansas City Federal Reserve Bank has released a study arguing that 2020’s limits on capital distributions contributed to greater systemic resilience. The paper tracks both share buy-backs and dividends over recent years, noting that GSIBs often distributed more than their income. Repurchases succeeded dividends as the principal capital-distribution medium since the great financial crisis, a shift found to give banks more flexibility to adjust distribution levels without significant investor backlash.

FHFA Leads Way on U.S. AI/ML Standards
FHFA today issued the first U.S. financial-agency supervisory guidance on AI/ML use by Fannie Mae, Freddie Mac and Common Securitization Solutions (not also the FHLBs). This goes well beyond the 2020 RFI released so far by the banking agencies (see FSM Report AI), with the standards also reflecting FHFA’s new equity focus in supervisory guidance specific to inclusive considerations.

Toomey Takes on the Entire Reserve-Bank System
In remarks today, Senate Banking Ranking Member Toomey (R-PA) heightened his critique of the Federal Reserve’s regional banks, suggesting that the System needs a sweeping overhaul.

CFPB Assesses Overdraft-Fee Marketplace
Reflecting the CFPB’s continuing critique of overdraft fees (see FSM Report CONSUMER38), the Bureau today posted a chart of overdraft and NSF fees at the largest banks, calling recent changes “encouraging.” However, the release does not retract recent allegations about their anti-consumer or -competition impact, …

9 02, 2022

Daily020922

Arezou Rafikian2023-04-05T11:42:19-04:00February 9th, 2022|2- Daily Briefing|

Global Regulators Demand Fast Capital Rewrite
Reinforcing his chairman’s comments yesterday, the Basel Committee and its supervising panel of central bankers today stressed the need for national action on the Basel III/IV package. The global bodies also reiterated the need for “full, timely, and consistent” action, with these calls sure to speed U.S. inter-agency deliberations as soon as the Federal Reserve’s board fills out with a new supervisory vice chair.

Senate Ag Ready to Engage on SEC/CFTC Crypto Jurisdiction
The Senate Agriculture Committee today held a hearing examining the CFTC’s authority to govern cash digital assets, with Members on both sides agreeing that it is vital to clarify the distinctions between securities and commodities law to ensure that the CFTC can intervene where appropriate to ensure stability and consumer protection. Chairwoman Stabenow (D-MI) acknowledged bitcoin’s financial-inclusion potential, but also noted an array of risks such as those to the climate, volatility, fraud, and insider trading.

IMF Discounts CBDC Inevitability
The IMF today released a comprehensive report on CBDC, the results of which led Managing Director Kristalina Georgieva to conclude that a central-bank digital currency is not an inevitable outcome of digital transformation.

Daily020922.pdf…

7 02, 2022

DAILY020722

Eliza Allen2023-04-05T13:35:42-04:00February 7th, 2022|2- Daily Briefing|

FDIC Takes New, Unsurprising Direction
Upon taking office over the weekend, Acting FDIC Chairman Gruenberg released a new set of agency priorities.

Fed Lawyers Press for Regulated Crypto Prior to Payment-System Access
In sharp contrast to the economic and often then even theoretical focus of many Fed research papers, Fed lawyers last week released a note assessing the legal underpinnings of U.S. money and the issues they present for rapid evolution in tandem with increasing digitalization.

Toomey Heightens Raskin Opposition
Following up last week’s contentious hearing (see Client Report FEDERALRESERVE69), Senate Banking Ranking Member Toomey (R-PA) today sent Vice Chair-nominee Raskin a formal request for information on her relationship to a fintech company that unusually obtained a Fed master account.

Fed Reiterates Anti-DLT Construct for CBDC
As we noted last week, the FRB’s CBDC technology team known as Project Hamilton has determined an array of significant CBDC benefits but also found that DLT is not its preferred system infrastructure.

HFSC to Debate Stablecoins, Not Start Action on Them
Today’s HFSC staff memo makes it clear that tomorrow’s hearing will be a platform for both Congressional — or at least Democratic — support for the PWG’s stablecoin report (see Client Report CRYPTO21).

Daily020722.pdf…

3 02, 2022

FEDERALRESERVE69

Arezou Rafikian2023-04-05T14:06:42-04:00February 3rd, 2022|5- Client Report|

FedFin Assessment: Raskin Confirmation Possible, But a Squeaker

As this report details, all three Fed nominees before the Senate Banking Committee today emphasized the vital importance of Fed independence and their anti-inflation zeal to quell GOP opposition and cement it among moderate Democrats.

FEDERALRESERVE69.pdf…

3 02, 2022

FedFin Assessment: Raskin Confirmation Possible, But a Squeaker

Arezou Rafikian2023-04-05T14:06:56-04:00February 3rd, 2022|The Vault|

As this report details, all three Fed nominees before the Senate Banking Committee today emphasized the vital importance of Fed independence and their anti-inflation zeal to quell GOP opposition and cement it among moderate Democrats. Professor Philip Jefferson sailed through and will be confirmed — perhaps quickly — by a relatively -wide bipartisan margin. We expect Professor Lisa Cook also to prevail, with Democrats likely joined by a
couple of moderate Republicans convinced that attacks on her expertise art unseemly with regard to a Black woman given how rarely similar concerns are voiced about white nominees with no macroeconomic-policy expertise.

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

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…

28 01, 2022

Daily012822

Eliza Allen2023-04-11T15:59:03-04:00January 28th, 2022|2- Daily Briefing|

Toomey Raises New Objections to Fed Slate
Adding to his objections to Fed nominees other than Mr. Powell, Senate Banking Ranking Member Toomey (R-PA) today cited missing paperwork.

Board Advances Longstanding DIHC/Insurance Construct
The Federal Reserve today proposed new supervisory guidance for DIHCs principally engaged in insurance activities, also detailing a new supervisory rating system.

Daily012822.pdf…

25 01, 2022

Daily012522

Arezou Rafikian2023-04-12T13:57:13-04:00January 25th, 2022|2- Daily Briefing|

CFPB Takes Bank-Competition Lead
The read-out posted today of the President’s competition-council meeting included a statement that the CFPB is going after “tens of billions” in “junk fees” in “banking, credit cards, and mortgages.” No details are provided, but we believe this statement positions the Bureau’s latest efforts in overdraft fees firmly in the context of “unfair” competition for deposit pricing announced when the Bureau launched this initiative.

Toomey: Fed Nominees Violate Geographic, Professional Diversity Requirements
Continuing to oppose several of President Biden’s Fed nominees, Senate Banking Ranking Member Toomey (R-PA) today argued the nominations fail collectively to meet geographic and professional diversity requirements in law.

Daily012522.pdf…