#shut-down

12 01, 2024

Al011524

2024-01-12T15:32:45-05:00January 12th, 2024|3- This Week|

The Shut-Down Shut-Up

Although the calendar later in this report notes several Congressional hearings set for this week, these will be poorly attended if they are even convened.  That’s because we’re back on the brink, waiting to find out if Speaker Johnson (R-LA) can corral his super-conservative colleagues or if key parts of the U.S. government will close their doors.  Even if they don’t, the disruption of an imminent shut-down and start-up is significant and much of the government is thus already holding its breath.  The banking agencies are funded outside the appropriations process and will soldier on, but other financial regulators face shut-down of all but their emergency functions as soon as the 19th and, if that deadline mercifully passes, then again on February 2nd when the rest of the government is on the brink of losing its funding.  A Washington snowstorm always stows chaos and the one likely on Tuesday surely won’t make any of this any easier.

Al011524.pdf

29 09, 2023

M092923

2023-09-29T11:41:36-04:00September 29th, 2023|6- Client Memo|

How a Shut-Down Stokes Systemic Risk

Although there’s been some talk of what a government shut-down does to the SEC, there’s lots, lots more to worry about.  Risks are out there, risks that should be taken very, very seriously by the Members of Congress who seem to think that more chaos stokes their political fortunes.  Perhaps it does, but it could well do a lot of damage to their finances, not to mention those of all the voters who might well bear a reasonable grudge.

M092923.pdf

29 09, 2023

Karen Petrou: How a Shut-Down Stokes Systemic Risk

2023-09-29T11:41:22-04:00September 29th, 2023|The Vault|

Although there’s been some talk of what a government shut-down does to the SEC, there’s lots, lots more to worry about.  Risks are out there, risks that should be taken very, very seriously by the Members of Congress who seem to think that more chaos stokes their political fortunes.  Perhaps it does, but it could well do a lot of damage to their finances, not to mention those of all the voters who might well bear a reasonable grudge.

Where’s the systemic scary place?  Or, better said, places?  Some are right in front of us; others lurk in the closet waiting to pounce.

What worries me the most in the immediate future is the ability of bad actors to exploit what could be lightly- or even unguarded portals into critical financial market infrastructure.  There are of course many, many bad actors out there with the sophistication and/or state sponsorship quickly to test and then attack critical points in the payment, settlement, and clearing systems and/or the grids on which they rely.

As I discussed on Tuesday, not all providers of critical financial market infrastructure are under the hopefully-eagle eyes of the federal banking agencies which, funded outside federal appropriations, will remain open.  Some fall under the SEC or CFTC, agencies that will be hobbled, and some critical providers are wholly outside the regulatory perimeter.  Even if their nodes of market access seem small, disruption has a bad habit of migrating at lightning speed.  Even if power outages are …

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