Monday, August 28, 2017

Fed Chair Rejects Regulatory Roll-back

Financial Reforms Should be Refined, Not Repealed

Federal Reserve Chairwoman Janet L. Yellen strongly defended post-crisis financial reforms, saying that new regulations have strengthened the U.S. financial markets and wholesale roll-back would be unwise. In remarks delivered at a symposium sponsored by the Fed in Jackson Hole, Wyoming Yellen made the case for the success of these reforms, summarizing indicators and research that show the improved resilience of the U.S. financial system, due, she said,  "importantly to regulatory reform as well as actions taken by the private sector.” She also addressed "evidence regarding how financial regulatory reform has affected economic growth, credit availability, and market liquidity.”

Monday, August 7, 2017

Risk Management Still at the Heart of Financial Regulation

Fed Official Urges a Tiered Risk-Based Calibration of Post-Crisis Reforms

In an August 2, 2017 address, President and CEO of the Federal Reserve Bank of Cleveland Loretta J. Mester advocated a fresh risk assessment to recalibrate financial regulations and right-size them to ease the burden on smaller banks. Ms. Mester proposed "tiering of oversight by risk,” thereby relieving community banks from much of the regulation intended for larger banks whose activities present different and larger risks to the greater financial system than those of smaller institutions. 

Wednesday, August 2, 2017

Treasury Secretary on the State of the Global Financial System

Mnuchin Briefs Congress on his Marching Orders

On July 27, 2017, Treasury Secretary Steven Mnuchin delivered the Department of the Treasury’s annual report on the state of the international financial system. Mnuchin’s testimony covered many topics ranging from the Volcker Rule to tax reform and China equity caps. The hearing was sometimes contentious, with Rep. Maxine Waters (D-CA) sparring with Secretary Mnuchin over his apparent failure to respond to letters of inquiry from Waters. Despite the fireworks, Mnuchin laid out some of his thoughts on the state of domestic and global financial markets as well as the Treasury’s plans for recalibration of Dodd-Frank regulatory reforms.

Friday, July 28, 2017

Fed Nominee Favors Regulatory Refinement and Transparency

Randal Quarles says “some refinements” are in order.

At his July 27, 2017 confirmation hearing before the Senate Banking Committee, Randal Quarles testified that if confirmed he would advocate not for a rollback, but a reexamination of post-crisis reforms. He also advocated for better transparency on the part of regulators, and promised to approach the position with an open mind and in cooperation with the members of the Committee. 

Wednesday, July 26, 2017

There is No Room for Complacency

French Central Banker Outlines Priorities to Complete Post-Crisis Reform

In a July 12, 2017 address before the Paris Europlace International Financial Forum, François Villeroy de Galhau, Governor of the Banque de France, outlined what he sees is necessary to complete the work of financial regulatory reform. Noting that resilience of the global financial system has significantly improved in eight years as a result of sweeping regulatory changes, de Galhau urged regulators and central bankers not to be complacent. There is work yet to finish on the new regulatory framework, and steps that must be taken to consolidate the achievements made thus far in making the global economy safer and more secure.

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