LOTS TO TALK ABOUT
Later this week, Janet Yellen will testify before the House Financial Services Committee on the global financial system. Typically, these hearings are sedate affairs at which Treasury Secretaries are grilled on Chinese exchange rates, foreign banks, the IMF and World Bank, and many other issues that have nothing whatsoever to do with global finance. This time will indeed be different.
US, G7 Fragment Global Financial Construct to Sanction Russia
Heightening sanctions to a still more unprecedented level, the President has issued a new set of Russian sanctions and the U.S., along with the rest of the G7, announced today that both the World Bank and IMF will be pressed to deny Russia borrowing privileges, which are rarely – if ever – denied for overtly political reasons.
FRB-NY Climate Stress Test Reveals Large Capital Shortfalls
A new Federal Reserve Bank of New York paper proposes a climate stress-test methodology which, when deployed, finds significant systemic risk due to large bank capital shortfalls during periods of sharp transition risk.
Timeline Set for GSE Capital Rewrite
The Federal Register today includes FHFA’s proposed changes to the GSEs capital framework. As detailed in our in-depth report, the rule would actively promote CRT and rewrite the leverage ratio, making risk-based capital the GSEs’ binding constraint.
Gensler Ramps Predictive-Analytics Threat Up to Systemic Risk
Following his Senate Banking appearance earlier this month (see Client Report INVESTOR18), SEC Chairman Gensler today reiterated his focus on digital engagement practices (DEPs), warning that predictive data analytics could increase systemic risk due to increased data- source concentration, herding, and interconnectedness.
McHenry Attacks Treasury for “Social Agenda,” Warns of Chinese Threat
Ahead of Treasury Secretary Yellen’s appearance before HFSC this Thursday, Ranking Member McHenry (R-PA) blasted Biden administration financial policy on grounds that it advantages China at cost to U.S. national interest.