In a lengthy farewell speech today as his tenure on the Federal Reserve Board of Governors comes to a close, former Vice Chairman for Supervision Randal Quarles outlined several “further refinements to the bank supervisor and regulatory framework” that still need to be made in the near term, including further calibration of leverage capital standards.
While the Federal Reserve is not planning to join onto forthcoming OCC guidance for large firms on managing climate risk, Fed Chairman Jerome Powell signaled that he would be open to coordinating the other banking agencies to ensure a consistent regulatory framework around climate risk, and that the Fed could also move to issue its own guidance in the future.
Federal Reserve Chairman Jerome Powell told members of the Senate Banking Committee today that “the banking system is strong,” and that while “there are some issues to address in the capital markets, I wouldn’t say they rise to the level of grave systemic importance.” He did flag cyber risk as a key threat to financial stability.
With certain tenors of Libor set to sunset at the end of 2021, the Commodity Futures Trading Commission has issued a request for information on potential ways to amend its swap clearing requirement to address the transition away from Libor to alternative reference rates.
The Basel Committee on Banking Supervision today released outlined principles for the effective management and supervision of climate-related financial risks.
In remarks today at the OCC, Acting Comptroller Michael Hsu indicated that the agency plans to address climate change risk regulation with high-level framework guidance and five “range of practices” questions for large-bank boards by the end of 2021.
Banks continued to be profitable and strongly capitalized as structural vulnerabilities persist in some types of money market funds, the Federal Reserve said in its latest financial stability report released today.
Acting Comptroller of the Currency Michael Hsu today warned that the “rebundling of banking services by fintechs and the fragmented supervision of universal crypto firms pose significant medium- to long-term risks to consumers, businesses and financial stability.”
In response to the worldwide call by investors and regulators for disclosure of environmental, social and governance—as well as climate-specific—information, the Value Reporting Foundation and the Climate Disclosure Standards Board will be consolidated into the newly-formed International Sustainability Standards Board.
Acting Comptroller of the Currency Michael Hsu signaled that his agency is working to develop “high-level climate risk management supervisory expectations for large banks” and that he expects to issue framework guidance for comment “by the end of the year.”