#stablecoins – Federal Financial Analytics

23 03, 2023

DAILY032323

Eliza Allen2023-03-23T17:09:59-04:00March 23rd, 2023|2- Daily Briefing|

OFR Study Predicts Household Gains, Banking Instability From Digital Currencies

A new OFR working paper concludes that full integration of digital currencies into the economy would reduce financial-system volatility and improve household welfare, but also increase the probability of a banking crisis.

HFSC Poses Still Tougher SVB/SBNY Resolution Questions

Following tough GOP letters to the Fed and FDIC earlier this week, HFSC Chairman McHenry (R-NC) and Subcommittee Chair Hill (R-AR) last night sent even sterner missives to Chairman Gruenberg and Secretary Yellen.

Bipartisan Push Begins For CEO Clawbacks

Ahead of its first of many hearings on the collapse of SVB and SBNY, Senate Banking Chairman Brown (D-OH) and Ranking Member Scott (R-SC) today sent letters to the former CEOs of the banks demanding that they answer for the bank failures, noting also that they will be expected to testify before the Committee if they are unable to do so next week.

OFR Blog: CRE, Residential Markets Pose Little Systemic Risk

Despite growing concerns about CRE and even potential systemic risk, an OFR blog post today concludes that neither the residential nor commercial real estate market poses a significant threat to the financial system.

Basel Stands By Its Rules, Contemplates New Supervisory Standards

The Basel Committee’s release following its March 14 meeting unsurprisingly notes the bank failures preceding it just days before, but attributes them principally to poor risk management in the face of rising rates.

GSEs Seek Public Comment on Credit Score Model Transition

The FHFA today announced…

14 02, 2023

FedFin on: Crypto Set For Senate AML, Reserve Rewrite

Arezou Rafikian2023-02-15T16:13:52-05:00February 14th, 2023|The Vault|

Although Chairman Brown (D-OH) remained non-committal on the need for crypto legislation, he emphatically called for reform to protect consumers and investors. Sen. Warren (D-MA) plans to reintroduce bipartisan legislation extending AML requirements to crypto firms, while Sen. Tillis (R-NC) announced that he is working on a bill addressing proof of reserves and asset segregation. Sen. Lummis (R-WY) was not present, but also plans to reintroduce her sweeping crypto bill (see FSM Report CRYPTO28) in this Congress following revisions that reflect…

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

14 02, 2023

CRYPTO39

Max Camateros-Mann2023-02-14T16:45:27-05:00February 14th, 2023|5- Client Report|

Crypto Set For Senate AML, Reserve Rewrite

Although Chairman Brown (D-OH) remained non-committal on the need for crypto legislation, he emphatically called for reform to protect consumers and investors. Sen. Warren (D-MA) plans to reintroduce bipartisan legislation extending AML requirements to crypto firms, while Sen. Tillis (R-NC) announced that he is working on a bill addressing proof of reserves and asset segregation. Sen. Lummis (R-WY) was not present, but also plans to reintroduce her sweeping crypto bill (see FSM Report CRYPTO28) in this Congress following revisions that reflect recent developments. Ranking Member Scott (R-SC) seemed open to at least some legislation, but also blasted SEC Chairman Gensler’s enforcement-focused approach. Sen. Smith (D-MN) also reiterated concerns she and Sen. Warren share about crypto assets in the banking system.

CRYPTO39.pdf…

16 11, 2022

REFORM215

William Cross2022-11-22T15:02:46-05:00November 16th, 2022|5- Client Report|

HFSC Session Brings Crypto Action to Fore, “Holistic” Capital Under Scrutiny

HFSC today largely focused bank regulators on the same range of questions posed at yesterday’s Senate Banking session (see Client Report REFORM214). However, Chairwoman Waters (D-CA) emphasized the importance of federal legislation in sharp contrast to Chairman Brown (D-OH), also announcing a hearing in December on FTX. Ranking Member McHenry (R-NC), who will become HFSC chairman in the next Congress, concurred with the chairwoman’s views on the need for digital-finance statutory reform. However, he took strong issue with inter-agency policy with regard to new capital rules, merger restrictions, and third-party relationship constraints. Republican members also targeted Vice Chairman Barr’s holistic capital review, arguing that banks are currently well capitalized and that additional standards would hamper lending. Mr. Barr indicated that an SLR rewrite is part of the holistic review but not immediately necessary to quell Treasury-market volatility or illiquidity. As discussed in more detail below, regulators promised banking-sector crypto rules at least as stringent as Basel’s proposal.

REFORM215.pdf

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12 10, 2022

DAILY101222

Eliza Allen2022-10-12T16:58:59-04:00October 12th, 2022|2- Daily Briefing|

ECB Staff: Retail CBDC Success May Hang on Interest-Rate Inducements

A new paper from European Central Bank staff looks not so much at CBDC policy objectives, but at whether central banks can achieve them and still satisfy the needs of retail depositors and businesses. Based in part on two small, failed CBDC ventures, the paper concludes that CBDC adoption will prove harder than policy focused CBDC analyses suggest.

Barr Accepts Crypto Activities In Banks But Demands New Safety Rules, Consumer Standards

Although he did not adopt Acting Comptroller Hsu’s attack yesterday on cryptoassets, Fed Vice Chair Barr today made it clear that the Fed believes, as it and global regulators repeatedly say, that the same risks should be covered by the same rules. Mr. Barr does believe that cryptoasset activities may be appropriate for banks if appropriate standards and internal controls are in place, noting that the Fed is now moving past its own supervisory guidance (see FSM Report CRYPTO31) to work with the FDIC and OCC to craft additional standards.

IOSCO Releases Global Online Marketing, Enforcement Standards

IOSCO today increased its focus on digitalization, moving away from longstanding edicts regarding monitoring to a set of specific standards for supervision and enforcement. IOSCO urges supervisors to require firms to have online marketing-and-distribution standards as well as protocols governing online onboarding.

Daily101222.pdf…

22 09, 2022

REFORM212

Max Camateros-Mann2022-10-12T17:06:54-04:00September 22nd, 2022|5- Client Report|

HFSC Goes Easy on CEOs

At today’s big-bank oversight HFSC hearing, Committee Democrats focused on each bank’s progress on social issues, such as internal diversity, unionization, and historic roles in financing slavery. Although Chairwoman Waters (D-CA) called for more restrictive merger-approval criteria in her opening statement, Democrats largely left the issue untouched. Ranking Member McHenry (R-NC) framed the hearing as political “theater,” focusing on discrediting capital increases. Committee Republicans also asked CEOs about inflation, fiscal policy, and gun merchant codes. Chairwoman Waters concluded this marathon session by chastising the CEOs for failing fully to answer the questions she posed ahead of the hearing and demanding that they do so in five legislative days.

REFORM212.pdf…

4 04, 2022

DAILY040422

Eliza Allen2023-03-27T12:49:01-04:00April 4th, 2022|2- Daily Briefing|

FDIC Climate-Risk Principles Set for Public Comment

Today’s Federal Register includes the final text of the FDIC’s request for public comment on climate-risk management principles.

FRB-NY Reasserts that Disasters Don’t Damage Bank Resilience

The Federal Reserve Bank of New York today released a blog post on its earlier staff paper finding that weather events triggering federal disaster declaration did not pose significant risk to bank resiliency, even for the most damaging of disasters.

GOP Demands Disclosure, Not Rules, Govern Stablecoins

Republicans last week outlined their preferred, disclosure-based approach to stablecoin regulation, a sharp contrast to the PWG’s recommendations (see Client Report CRYPTO21) calling for new chartering restrictions.

HFSC Presses Financial Industry for Reparations

The HFSC memo today on tomorrow’s hearing about the need for reparations from the financial-services industry indicates that the Oversight Subcommittee will focus on the extent to which banks provided financing for slavery, allowed for enslaved persons to be used as collateral, and how insurers covered enslaved people’s work or sales value.

Nonbank Small-Business Lenders Face Possible CFPB Sanction

House Small Business Chair Velasquez (D-NY) has introduced H.R. 7351 to force nonbank small-business lenders into the CFPB’s efforts to identify patterns of racial, ethnic, or gender bias via ECOA disclosures.

CFPB Demands Lenders Give Consumers Data in Servicing, Other Disputes

Building on its mortgage servicing initiatives, the CFPB today not only filed an amicus brief in a case against Wells Fargo, but also reiterated that banks must participate in “relationship banking” and respond promptly …