#Reed – Page 3 – Federal Financial Analytics

17 02, 2023

DAILY021723

Eliza Allen2023-02-17T12:16:37-05:00February 17th, 2023|2- Daily Briefing|

Senate Dems Frame FRB-Nomination Demands

In conjunction with a bill spearheaded by Sen. Jack Reed (D-RI), Banking Chairman Brown (D-OH) joined other Democrats yesterday in introducing S. 496, legislation to require that the Federal Reserve Board have a governor dedicated to worker interests much as the seat now held by Gov. Bowman is by law required to focus on community-bank considerations. The measure was also introduced in the last Congress and was then as now intended more to send a signal to the White House about the candidates Senate Banking will view with the greatest favor rather than as a serious effort to change the law.

Swiss Bank Role In SEC Crypto Action Sure To Hike Pressure On Banking Agencies

We draw to your attention the reference to a Swiss bank in the SEC’s enforcement order against Terraform Labs and its founder, Do Kwon. Although criticized today by Republicans as an example of the SEC’s prior regulatory failures, the order itself is unsurprising given that Mr. Kwon is a fugitive and the algorithmic stablecoin’s collapse shocked previously complacent crypto markets and regulators. The SEC’s order says only that $100 million was illegally transferred into a “Swiss bank,” not naming the institution.

Daily021723.pdf…

4 11, 2022

DAILY110422

Eliza Allen2022-11-04T17:11:14-04:00November 4th, 2022|2- Daily Briefing|

Big Banks Pressed on Sluggish, Inequitable Deposit-Rate Hikes

Advancing an initiative with political “legs,” Sen. Jack Reed (D-RI) has demanded answers from the nation’s largest banks on why small-deposit rates have barely budged even as the Fed sharply hiked interest rates now reflected in higher loan costs.

FRB-NY Official Details Wholesale CBDC Prototype

Remarks today from a senior FRB-NY official, Michelle Neal, continued the Fed’s ambivalent stand on a CBDC (see FSM Report CBDC10).

Fed Fixes Advanced-Approach Glitches

The FRB is proposing to implement three changes to Regulation Q data collection/disclosure rules governing advanced-approach capital adequacy at BHCs, SLHCs, and state member banks.

Fed to Name Master-Account Names

Reflecting ongoing concerns on Capitol Hill, the Fed is proposing to make what our analysis suggests were opaque payment-system access guidelines (see FSM Report PAYMENT24) “a bit more transparent.”

Toomey Presses for SLR Rewrite

Ranking Senate Banking Member Toomey (R-PA) today released his letter to Chairman Powell cautioning the central bank not to handle any Treasury-market liquidity events with new backstop facilities.

Waters Adds To Fed’s Political Woes

In a letter today, HFSC Chairwoman Waters (D-CA) joined Sens. Warren (D-MA), Brown (D-OH), and Hickenlooper (D-CO) in sharply criticizing the recent Fed “super-sized” rate hike.

Fed Worry Level Goes Up

The Federal Reserve likely hoped for the torpor of a Friday afternoon to quell frightened replies to the latest financial-stability report released today.

Daily110422.pdf…

3 03, 2022

DAILY030322

Eliza Allen2023-04-04T12:53:47-04:00March 3rd, 2022|2- Daily Briefing|

LIBOR Transition Rescue Advances

Advancing a long-delayed effort to clarify the LIBOR transition, a bipartisan group of Senate Banking Members today introduced legislation dictating replacement rates for legacy contracts. The language is a companion to a revised version of House-introduced standards (see Client Report LIBOR5) that among other things reflects Sen. Toomey’s (R-PA) concerns that the bill be narrowly tailored to a defined class of legacy contracts rather than, as some feared, stipulating new benchmark rates across the financial market for new contracts. The bill is supported by virtually all financial-industry advocacy organizations and should now advance quickly to the Senate floor since the Senate Banking Committee has already held hearings on this issue. At today’s hearing (see FedFin’s report), Chairman Powell strongly endorsed the bill and reiterated the need for rapid action.

Powell Defends Fed’s Institutional Legitimacy, Continuing Function as Nominations Stall

Today’s Senate Banking hearing with Chairman Powell featured continuing partisan wrangling over stalled Fed nominations showed no sign of resolution after Republicans essentially forced Mr. Powell to concur that his powers to act pro tem ensured continuing central-bank function. Ranking Member Toomey (R-PA) also renewed his campaign against Reserve Banks, arguing that they are anachronistic and have strayed from core mandate concerns.

Daily030322.pdf…

15 12, 2021

Daily121521

Arezou Rafikian2023-05-23T12:22:59-04:00December 15th, 2021|2- Daily Briefing|

HFSC GOP Try to Restrain FDIC Democrats
Squaring off in the partisan battle over FDIC merger policy, HFSC Republicans have launched their own investigation into what they call the Democrats’ “power grab.” Republicans also “demanded” that Chairwoman Waters (D-CA) convene an oversight hearing even as they seek Democrats to join their inquiry.

Powell Commends MMF Proposal, Demurs on Crypto Risk
As expected, Fed Chair Powell’s press conference today focused almost entirely on inflation. However, Mr. Powell used a question on financial stability to applaud the SEC’s MMF proposal (see alert earlier today). Asked about crypto’s financial-stability risk, the Fed chair discounted near-term systemic risk, but consumer protection and market issues such as leverage outside the Fed’s jurisdiction warrant attention.

Senate Dems Demand BNPL Standards
Sen. Jack Reed (D-RI) was joined today by Banking Chairman Brown (D-OH), Sen. Warren (D-MA), and other Committee Democrats in calling on the CFPB to regulate buy-now, pay-later (BNPL) products.

SEC Advances Controversial Swing-Pricing MMF Rewrite
Acting on a major FSOC, Fed, and global worry, the SEC today approved a multi-prong proposal realigning MMF liquidity standards and clarifying how MMFs can handle negative rates. The most controversial of the options would impose swing pricing on prime institutional and tax-exempt funds, an approach about which two Democratic commissioners expressed some concerns and the FSB seemed particularly skeptical in its recent MMF-options paper (see FSM Report MMF18).

Daily121521.pdf…