#Russia – Page 3 – Federal Financial Analytics

24 03, 2022

DAILY032422

Eliza Allen2023-04-03T12:54:18-04:00March 24th, 2022|2- Daily Briefing|

Waller Adds Residential Real Estate to Monetary Policy Criteria

In remarks today, FRB Gov. Waller addressed the impact of what he calls the “red-hot” housing market on monetary and fiscal policy. Noting that nonbank servicers were able to survive the 2020 crisis due to the refi boom’s liquidity benefit and a Ginnie facility, Mr. Waller reiterates ongoing policy concern about nonbank-servicer resilience without detailing any preferred policy actions.

HFSC Expands Diversity Data Demands to Large Insurers

Chairwoman Waters and Diversity Subcommittee Chairwoman Beatty expanded the committee’s diversity efforts today to include insurers via a letter sent to the largest insurance companies.

IOSCO Decries DeFi, US Regulatory Intervention Likely

Going beyond the general DeFi concerns outlined in a February FSB report, IOSCO today released a detailed report arguing that most DeFi products are directly akin to regulated investment, lending, and clearing products, posing not only the risks otherwise captured within the prudential perimeter, but also numerous additional risks presented by the manner in which DeFi generally operates.

HFSC Wants Names re Russian Business Exposure, Sanctions Compliance

HFSC Chairwoman Waters sent a letter today to financial and business trade associations requesting detailed information on each sector’s efforts to divest from Russia. The letter applauds current efforts, but states that HFSC must nonetheless seek additional details about exit strategies and sanctions compliance, along with the names of companies continuing to do business within the Russian Federation or with Russian-based firms.

Daily032422.pdf…

22 03, 2022

DAILY032222

Eliza Allen2023-04-03T13:01:29-04:00March 22nd, 2022|2- Daily Briefing|

BIS Advances Cross-Border CBDC Settlement

The BIS today announced significant progress accelerating the ability of CBDCs to handle cross-border payments. Working with central banks in Australia, Singapore, Malaysia, and South Africa, the BIS described two prototype platforms for multi-currency international settlement that in their view prove that central banks can transact directly with each other using a shared platform.

ECB Head Criticizes Crypto, Calls for CBDC

Although we have not been able to confirm this by official remarks, press reports today indicate that ECB head Christine Lagarde has concluded that crypto-assets and -currency are significant factors in Russian-sanctions evasion.

CFPB Attaches UDAAP Label to Product-Review Practices

Building on FTC action, the CFPB today issued guidance stipulating that contractual-gag orders and certain other practices (e.g., employee or paid reviews) affecting the integrity of consumer reviews are illegal in credit-card, mortgage, or other consumer-finance marketing. The law on which this view is premised is a provision in the CFPB’s authorizing statute providing enforcement power for unfair, deceptive, or abusive acts or practices (UDAAP).

Treasury Lays out Digital-Asset Work Plan

In remarks today, Treasury Under-Secretary Liang laid out her agency’s plans to execute President Biden’s digital-asset order (see Client Report CRYPTO26). Treasury’s report on money and the payment system will address current weaknesses (e.g., high fees for low-balance accounts, slow and costly remittances), recognize the strength of FDIC insurance and other safeguards, build on FedNow, and establish a way for stablecoins to access the payment system.

Daily032222.pdf…

21 03, 2022

m032122

Arezou Rafikian2023-04-03T13:18:30-04:00March 21st, 2022|6- Client Memo|

How to Set Course to a Digital Future

Last week, we laid out the macrofinancial implications of the Ukraine crisis – i.e., its impact on the global financial-and-regulatory order. Some of this analysis is founded on President Biden’s digital-asset executive order, which also has profound and immediate impact on critical macroprudential issues at the border of innovation and regulation to which we now turn. To forecast how digitalization will come upon us, the digital-asset order must be read in the Administration’s broader context in which high-impact political issues, such as racial equity, weigh at least as heavily as the complexities of CBDC or even the benefit of a future financial crises foregone.

m032122.pdf…

21 03, 2022

Karen Petrou: How to Set Course to a Digital Future

Arezou Rafikian2023-04-03T13:18:42-04:00March 21st, 2022|The Vault|

Last week, we laid out the macrofinancial implications of the Ukraine crisis – i.e., its impact on the global financial-and-regulatory order. Some of this analysis is founded on President Biden’s digital-asset executive order, which also has profound and immediate impact on critical macroprudential issues at the border of innovation and regulation to which we now turn. To forecast how digitalization will come upon us, the digital-asset order must be read in the Administration’s broader context in which high-impact political issues, such as racial equity, weigh at least as heavily as the complexities of CBDC or even the benefit of a future financial crises foregone.

Administration policy based on Democratic politics is set not only by the digital-asset order, but also by other White House directives that will define the boundaries of what Treasury and the agencies – the Fed included at least to a point – will do. To forecast digital-asset policy, one must thus also divine the outcome of two other executive orders.

First, there’s the President’s competition directive. Every critical consumer-protection question under the CFPB’s purview is now considered first and foremost in terms of competition, with the agency’s director making it manifestly clear that almost anything done by any big bank is a target for structural reform. Director Chopra doesn’t like fintech or biotech much better than most banks do, but his approach to digital assets is likely only to squelch big banks as much as he can and thus to drive cryptoassets further into …

18 03, 2022

Al032122

Arezou Rafikian2023-04-03T13:20:59-04:00March 18th, 2022|3- This Week|

AS IT GETS WORSE, AMERICA GETS ANGRIER

Although the Congressional schedule this week (see below) looks light, it will be anything but quiet on Capitol Hill. We will thus continue to monitor and analyze key developments related to sanctions against Russia, Belarus, their oligarchs, and pretty much anyone else Americans think may be playing a direct or indirect role accelerating geopolitical risk, encouraging aggression, and exacerbating human suffering. With the House out of session next week, new laws cannot be enacted, but the White House and Treasury will act as fast as possible and as assertively as they think is right, even if their edicts tread on the boundaries of current law when they are convinced that Congress will quickly codify what’s been done, as well as authorize still more.

Al032122.pdf…

18 03, 2022

DAILY031822

Eliza Allen2023-04-03T14:21:59-04:00March 18th, 2022|2- Daily Briefing|

Commodity-Market Backstop Prospects, Impact

In this alert, we update clients on our assessment of policy consequences related to commodity-market strains. Notably, a letter from European energy traders to the ECB has been made public indicating stress in this sector is so severe that traders are seeking emergency liquidity support. While directed to the ECB, the letter calls upon all central banks to provide this support, making it likely that a similar plea has been sent to the Federal Reserve.

Congress Wants More, Tougher Sanctions

Although witnesses at yesterday’s Senate Banking Committee sought to assure Congress that digital currency does not promote sanctions evasion (see Client Report SANCTION17), legislation continues to advance to curtail any form of sanctions evasion. As we noted yesterday, senior Senate Democrats have introduced a bill expressly targeting digital assets and exchanges while HFSC marked up numerous bills tightening more conventional financial-transmission and policy channels.

Daily031822.pdf…

17 03, 2022

DAILY031722

Eliza Allen2023-04-03T14:33:52-04:00March 17th, 2022|2- Daily Briefing|

Fed, FHFA Leadership Advance

As anticipated last night, the Senate Banking Committee yesterday advanced all the Fed nominations and that of Sandra Thompson as FHFA director. However, Lisa Cook’s nomination was tied on a strictly partisan basis, meaning that it was not approved by Senate Banking but is nonetheless discharged to Senate Majority Leader Schumer (D-NY).

HFSC Hikes Array of Anti-Russia Sanctions

In the first of a series of markups, HFSC today approved 5 bills ramping up sanctions against Russia and Belarus. The most controversial of them, H.R. 7080 (Waters, D-CA), would broaden FinCEN’s ability to obtain information about the transactions of Russian oligarchs in the US.

Chopra Uses Rate Hike to Press Competition Inquiries

Describing the CFPB as “the arm of the Federal Reserve System that is fully focused on consumers,” Director Chopra today issued a statement following yesterday’s rate hike.

Senate Democrats Take Turns Whacking Wells Fargo

Senior Democrats today took sharp issue with Wells Fargo’s refi lending, asserting it was discriminatory and seeking an array of data from the bank and action by federal agencies. Senate Banking Chairman Brown (D-OH), Majority Whip Durbin (D-IL), and other senators called on HUD and the CFPB to investigate findings in a recent Bloomberg story, confining their comments to a general attack on discrimination without setting a date for a reply or any specific matters the agencies are to review.

Daily031722.pdf…

15 03, 2022

DAILY031522

Eliza Allen2023-04-03T14:45:47-04:00March 15th, 2022|2- Daily Briefing|

House Readies Still Tougher Sanctions

Thursday’s HFSC mark-up will advance a series of bills ramping up sanctions designed as amendments to the omnibus legislation advancing through Congress to punish Russia and targeted allies. We expect all these bills to pass by wide margins, with additional measures added after tomorrow’s speech from Ukraine’ president; we will provide clients with an in-depth report of the mark-up and other actions related to financial markets.

What’s Next at the Fed

As anticipated, Sarah Bloom Raskin has reportedly withdrawn her nomination following indication from Sen. Manchin (D-WV) and two moderate Republicans that they will oppose her confirmation. Although this might clear the nominations of Chairman Powell, Gov. Brainard, Lisa Cook, and Phillip Jefferson, this will occur only if Chairman Brown (D-OH) is willing to sacrifice leverage over the next nomination for the supervision vice chair.

More on What’s Next for the Fed

President Biden’s statement today on Ms. Raskin’s withdrawal clarifies the outlook detailed in our alert earlier this afternoon. After praising the nominee, the president urges the Senate to quickly confirm Mr. Powell, Ms. Brainard, Ms. Cook, and Mr. Jefferson.

Daily031522.pdf…

14 03, 2022

M031422

Arezou Rafikian2023-04-03T15:09:09-04:00March 14th, 2022|6- Client Memo|

The Collapse of the Global Financial Order and What’s to Come

The Great Depression’s role sparking the Second World War led the victors to create the Bretton Woods agreement establishing stable reserve assets under-girding a world prosperous and peaceful enough to prevent another conflagration. After 2008, the world reinforced another set of global norms, setting cross-border financial standards over the next fifteen years by newly empowered transnational financial agencies. Now, what was left of Bretton Woods is in ashes and national geopolitical interests will again dictate critical financial requirements. Although it’s of course possible that Russia’s devastating invasion will end without still more cataclysmic carnage, it has done irreparable damage to the largely frictionless cross-border finance on which it and its oligarchs relied. China should take a lesson.

m031422.pdf…

14 03, 2022

Karen Petrou: The Collapse of the Global Financial Order and What’s to Come

Arezou Rafikian2023-04-03T15:09:21-04:00March 14th, 2022|The Vault|

The Great Depression’s role sparking the Second World War led the victors to create the Bretton Woods agreement establishing stable reserve assets under-girding a world prosperous and peaceful enough to prevent another conflagration. After 2008, the world reinforced another set of global norms, setting cross-border financial standards over the next fifteen years by newly empowered transnational financial agencies. Now, what was left of Bretton Woods is in ashes and national geopolitical interests will again dictate critical financial requirements. Although it’s of course possible that Russia’s devastating invasion will end without still more cataclysmic carnage, it has done irreparable damage to the largely frictionless cross-border finance on which it and its oligarchs relied. China should take a lesson.

To be sure, this globalized and increasingly financialized construct was imperfect even for the hegemonic states and systemic financial companies in whose interests it worked the best. As Rana Foroohar pointed out last week, it was premised on the optimistic “end of history” reasoning that expected an interdependent world to be all-for one and one-for-all. Quite simply, if you must go through someone else’s space to get where you want to go, then you are more likely to abide by the rules applicable in that space to ensure you get there. Over time, this creates a macrofinancial system in which currencies, payments, assets, and risks moved with few speedbumps from one end of the earth to the other. Even where rules might slow all of this down, safe-haven states constructed high-price bypasses. This, …