#Warren – Page 3 – Federal Financial Analytics

11 12, 2023

Daily121123

Shane Smith2023-12-11T16:51:51-05:00December 11th, 2023|2- Daily Briefing|

Treasury Broadens Illicit Finance Scope to CRE, Investment Advisors

In connection with an order sanctioning two Afghanis for transnational corruption, Treasury and FinCEN today issued a fact sheet on actions under way to address corruption and other illicit transactions.

White House Threatens Veto on Bill Curtailing OCC, Other Agencies

The House Rules Committee is expected today to clear H.R. 357 for floor action as soon as tomorrow, prompting the White House to issue a veto threat.

Warren Presses Case for Crypto Standards in NDAA

Strengthening her position ahead of a fight with HFSC Chair McHenry (R-NC) over crypto provisions in the NDAA, Sen. Warren (D-MA) today announced that Sens. Hickenlooper (D-CO) and Luján (D-NM) alongside Senate Banking Committee members Warnock (D-GA), Butler (D-CA), and Van Hollen (D-MD) joined Sen. Warren and 14 other Senators as co-sponsors of the Digital Asset Anti-Money Laundering Act.

CGFS Wants LTV-Related Capital Rules Adjusted to Reflect House Prices

Reviewing the link between housing finance and systemic risk, the BIS Committee on the Global Financial System’s report today focused on the need for automatic stabilizers that provide macroprudential controls in this high-risk sector.

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30 11, 2023

DAILY113023

Eliza Allen2023-11-30T17:02:53-05:00November 30th, 2023|2- Daily Briefing|

FRB-Cleveland Head Calls for Reg Redesign

The head of the Federal Reserve Bank of Cleveland, Loretta Mester, yesterday argued for higher bank capital requirements, including counter-cyclical imposition of a capital buffer during low-risk periods so it can be released under stress based on credit growth under a formula ensuring that the CCyB in fact moves quickly to ease stress.

Brown, Colleagues Stand Behind GSIB Surcharge

Ahead of next week’s hearing with GSIB CEOs, Senate Banking Chairman Brown (D-OH) was joined today by Sens. Warren (D-MA), Fetterman (D-PA), and Reed (D-RI) in a letter to FRB Vice Chair Barr voicing their strong support for the Board’s GSIB surcharge proposal (see FSM Report GSIB22).

IMF: Future of AI’s Impact on Banking Unpredictable

The IMF today released an article focused on AI, concluding that banking has the potential to be the biggest beneficiaries of AI, but also may have the most to lose. The article considers the unpredictable future of AI technology through optimistic and pessimistic scenarios, concluding that AI could better protect assets and markets, but also could be put to various nefarious uses.

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14 11, 2023

REFORM229

Eliza Allen2023-11-14T15:57:18-05:00November 14th, 2023|5- Client Report|

Capital Proposal Gets Bipartisan Bashing in Senate Banking

Today’s Senate Banking hearing with top bank regulators showcased broad bipartisan concern over the interagency capital proposal (see FSM Report CAPITAL230). Although Chairman Brown (D-OH), Sen. Warren (D-MA), and Sen. John Fetterman (D-PA) staunchly defended the proposal on countercyclicality grounds, other senators on both sides of the aisle sounded the alarm over its impact on credit availability, small-business lending, and shadow-bank migration. FRB Vice Chair Barr repeatedly defended his agency’s analysis while emphasizing openness to comment, also highlighting that the proposal relates primarily to non-credit activity and would apply to only 37 banks. Some Republicans also raised concerns over other recent rulemakings, with Sen. Britt (R-AL) asking Vice Chair Barr if the agencies would consider a comment deadline extension for the LTD proposal (see FSM Report TLAC9). Although Mr. Barr stated that the rule is far simpler than the capital proposal, he also said the agencies would consider a similar extension. FDIC Chairman Gruenberg drew bipartisan ire over reports of FDIC widespread harassment, with Republicans seizing the occasion to criticize Mr. Gruenberg’s leadership. Grilled by Sen. Tillis (R-NC) about reports of a Fed leak of confidential supervisory information, Mr. Barr only said that he is deeply concerned. Separately, Chairman Brown emphasized unfinished work on bank executive accountability and urged Congress to pass the RECOUP Act (see FSM Report COMPENSATION37), which passed the Committee nearly unanimously in July.

REFORM229.pdf…

3 11, 2023

DAILY110323

Eliza Allen2023-11-03T17:39:35-04:00November 3rd, 2023|2- Daily Briefing|

FSOC Advances Designation Framework, Ready to Deploy

The FSOC today voted unanimously to finalize the Council’s analytic framework for financial stability risk identification (see FSM Report SYSTEMIC95) and guidance on nonbank financial company systemic designations (see FSM Report SIFI35). FedFin will soon provide clients with in-depth reports on each item. In addition to minor clarifications to the analytic framework, the Council importantly decided not to add cost-benefit analysis. Further, the final nonbank designation guidance is unchanged from the proposal, meaning that designation standards will not require a determination of imminent threat to financial stability.

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18 10, 2023

DAILY101823

Eliza Allen2023-10-18T17:19:09-04:00October 18th, 2023|2- Daily Briefing|

Treasury Responds to Hamas Sanctions Pressure, More to Come

Reflecting ongoing and high-impact Congressional pressure, OFAC today sanctioned ten Hamas terrorist group members, operatives, and financial facilitators including the virtual currency exchange service known as Buy Cash.

CPMI Wants Faster Payments

The BIS Committee on Payment and Market Infrastructures today submitted an interim report to the G20 with ten initial considerations regarding the structure, design, and oversight of interlinking arrangements for fast payment systems.

Treasury Reiterates CBDC Interest

Treasury International Affairs Under-Secretary Jay Shambaugh yesterday stated that Treasury has a “complementary role” in addressing CBDC’s role in the payment system, reinforcing the likelihood that Treasury continues to press the FRB to go farther into CBDC than the Fed seems willing to do (see Client Report CBDC14).

Senate Sides with Industry versus CFPB Small-business Reporting

Despite a veto threat from the White House, the Senate today voted 53 to 44 to authorize Congressional Review Act withdrawal of the CFPB’s small business reporting rule.

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25 09, 2023

DAILY092523

Eliza Allen2023-09-25T16:05:07-04:00September 25th, 2023|2- Daily Briefing|

IMF Report: CBDC Designs Could Boost Financial Inclusion

On Friday, the IMF released a report concluding that a well-designed CBDC could foster financial inclusion and act as an entry point for the unbanked to the broader financial system. This will strengthen Democratic demands for a U.S. CBDC, but we expect GOP opposition to remain firm and the Fed’s posture to retain its current focus on wholesale CBDCs.

FRB-NY: Stablecoins, MMFs Have Same Dynamic Runs

An FRB New York study today concludes that stablecoin investors behaved similarly to MMF investors in numerous recent runs. Staff found that investors consider a stablecoin to have been effectively depegged once its price drops below $0.99 which triggers a run and mirrors the dynamics of MMFs “breaking the buck.”

Senate Dems Target SIFI Designation, Scenarios to Curb Climate Risk

Senator Warren (D-MA) along with Sens. Sanders (I-VT), Heinrich (D-NM), Markey (D-MA), Whitehouse (D-RI), and Merkley (D-OR) today released a letter dated last Wednesday to Treasury Secretary Yellen and Climate Counselor Zindler calling on the Department to significantly increase the urgency with which it targets climate-related financial risk.

Daily092523.pdf…

20 09, 2023

DAILY092023

Eliza Allen2023-09-20T17:11:25-04:00September 20th, 2023|2- Daily Briefing|

Brown, Rounds Agree: AI Credit-Underwriting Warrants Regulatory Attention

At today’s Senate Banking hearing on AI in financial services, Chairman Brown (D-OH) argued that AI should be governed by the same rules as the rest of the financial system, with new law necessary if existing rules prove inadequate.

HFSC FinCEN Bills Draw Bipartisan Support

HFSC Chairman McHenry (R-NC) at today’s markup praised the scope of bipartisan support on today’s FinCEN, sanctions, and other national security bills.

HFSC Delays Bipartisan Sanction Bill Vote

Today’s HFSC markup also considered two bills addressing sanctions policy: H.R. 5512 from Rep. Sherman (D-CA) to require bank subsidiaries to comply with sanctions on Russia and Belarus and H.R. 760 from Rep. Barr (R-KY) imposing blocking sanctions on Chinese defense or surveillance companies and the third-party companies that supply them.

HFSC Dems Continue Strongly Opposing GOP Anti-CBDC Measure

The bipartisan spirit of today’s HFSC markup dissipated as Members fiercely debated H.R. 5403 from Majority Whip Emmer (R-MN), a bill that would bar the Fed from issuing a CBDC to individuals.

Gruenberg: New Shadow Bank Standards Would Cure a Capital Proposal Problem

FDIC Chairman Gruenberg today gave remarks arguing that FSOC along with OFR should establish a new reporting framework to assess the financial stability risks posed by nonbanks and ensure that public reporting is sufficient for market participants to understand nonbank counterparty risk.

HFSC Reports FinCEN, Sanctions, CBDC Bills

HFSC today unanimously reported H.R 760 sanctioning Chinese defense companies, H.R. 5512 requiring bank subsidiaries to comply with sanctions …

18 09, 2023

DAILY091823

Eliza Allen2023-09-18T16:46:46-04:00September 18th, 2023|2- Daily Briefing|

Dems Slam Fed Climate Scenarios

Sens. Markey (D-MA), Warren (D-MA), Sanders (I-VT) and eight additional Democratic Senators and House Members sent a letter to Chair Powell today demanding that the Fed ensures that the financial institutions it oversees properly address the threat of climate change. Claiming that the Fed’s climate pilot scenarios are not sufficiently rigorous, the letter demands that the Fed require banks to submit and execute plans to align their activities with climate targets, such as reducing financed emissions.

Top Treasury Official Sounds Big-Tech Payments Alarm

Treasury Assistant Secretary for Financial Institutions Graham Steele Friday warned that Big-Tech firms’ entry into financial services could result in increased market concentration and predatory pricing, highlighting their ability to leverage existing commercial relationships as well as network effects. Mr. Steele also named consumer-data rights and junk fees as top priorities, praising the CFPB’s actions on personal data (see FSM Report DATA3) and credit-card late fees (see FSM Report CREDITCARD36).

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15 09, 2023

DAILY091523

Eliza Allen2023-09-15T16:55:06-04:00September 15th, 2023|2- Daily Briefing|

Warren Adds Interest-Rate Risk to Fed Concerns

Heightening her attack on Fed interest-rate hikes, Sen. Warren (D-MA) yesterday pressed Treasury Secretary Yellen for FSOC action addressing interest-rate risks. Those she highlights include unrealized bond losses, CRE hazard, and challenges in the leveraged-loan market. Citing Moody’s recent credit downgrade of 10 regional banks, Ms. Warren voiced concern that interest rate risk still poses a systemic threat in these three areas and urged FSOC to act quickly to mitigate risk without suggesting specific actions.

Daily091523.pdf…

30 08, 2023

Daily083023

Arezou Rafikian2023-08-31T07:41:42-04:00August 30th, 2023|2- Daily Briefing|

FRB Chicago Study Finds Nonbanks Act as Global Shock Absorbers

A new empirical FRB Chicago study finds that nonbanks act as global shock absorbers during times of stress because tightening US monetary policy is associated with increased nonbank syndicated dollar lending compared to banks. This of course frustrates monetary-policy transmission in the U.S., but the paper focuses on EMEs where the principal risk is macroeconomic and financial shock.

Comment Period Reopened on Controversial Custody Proposal

The SEC today reopened the comment period on its controversial investment-advisor asset custody NPR. As noted (see FSM Report CUSTODY5), this thorough rewrite would redefine qualified custodians to exclude most crypto firms, as well as foreign firms and other entities the Commission does not believe ensures sufficient safeguards.

FSB Seeks Comment On Securitization Reforms

The FSB today announced that it will evaluate the impact of G20 securitization reforms (see FSM Report ABS37) on its financial-stability objectives as well as on securitization markets. The evaluation will focus on regulatory capital regulation governing securitization exposures and RMBS and CDO/CLO market segments, although the FSB will also consider including other segments.

Warren Blasts Powell, Alleging Capital-Reg Delay, Concessions

Expanding on her longstanding criticism of Chair Powell, Sen. Warren (D-MA) sent him a letter today chastising him for what she views as undue deference to big-bank lobbying and demanding that he press for the rapid completion of tough new capital rules.

Daily083023.pdf…