Aurelia Butler

WASHINGTON (Reuters) – Republicans’ Tuesday boycott of a vote to advance the nomination of Sarah Bloom Raskin as the Federal Reserve’s Wall Street cop will further delay regulatory changes which have been in limbo since Randal Quarles stepped down as Vice Chair for Supervision in October.While Fed staff are able to work on some measures in the background, Raskin would need to sign off on any major policy decisions. Here are some key ones likely to be affected: DE-REGULATION REDUX?Over the past four years, Quarles led a review of regulations introduced following the 2007-2009 global financial crisis, arguing they were too blunt and onerous. Democrats accused Quarles of saving Wall Street billions of dollars while increasing systemic risks and want Raskin to revisit some of those changes.Among the most contentious were revisions to the “Volcker Rule” curbing speculative bank investments; scrapping a requirement for big banks to hold capital against certain swap trades; and stripping the Fed of its power to fail banks on their annual “stress tests” based on subjective concerns.Raskin would have to pick which of these to address. Even without the nomination delay, the process of overhauling many of these rules was expected to be extremely time-consuming.CLIMATE CHANGE RISKSClimate change, a top policy priority for Democrats, is expected to rapidly rise on the Fed agenda under new leadership.So far, the Fed has asked lenders to explain how they are mitigating climate change-related risks to their balance sheets, with the industry expecting to progress to a formal climate change scenario analysis in 2023, Reuters has reported. Those projects are expected to accelerate. The big question will be whether Raskin pushes for restrictions or stiffer capital requirements on banks with significant exposures to polluting industries or other climate-specific risks.Raskin may have to tread more carefully than progressives had hoped given Republicans have cited her stance on climate change as one of the reasons for opposing her appointment.BANK M&AThe delay in nominating Raskin may compound a logjam in approving bank tie-ups that had slowed during the past six months due to uncertainty over Fed personnel changes. Some pending deals were approved following Fed Chair Jerome Powell’s renomination, but the industry is still waiting for the Fed and the Justice Department to decide on a potential new policy for bank deals. Raskin is expected to lead the committee that scrutinizes potential tie-ups, suggesting any new merger policy may also need her backing. Without that certainty, bankers and lawyers have said they would be reluctant to pursue new tie-ups. FINTECH FRAMEWORKShe will also have to tackle a regulatory blueprint for “fintech” companies that are quickly chipping away at the traditional financial sector.The Fed is exploring how banks intersect with fintechs, particularly with smaller lenders that may outsource more services and infrastructure. Fintechs are also lobbying the Fed for access to its payments system.While other banking regulators have worked for years to bring fintechs under their regulatory umbrella, the Fed has resisted, fearing doing so could create systemic risks. But as the sector continues to balloon, the Fed is expected to act.The controversy over Raskin’s role in helping fintech Reserve Trust gain access to a key Fed service could also complicate that process.SUPPLEMENTARY LEVERAGE RATIOAnother issue on the table is the supplementary leverage ratio, a rule created after the decade-ago crisis requiring banks to hold capital against assets regardless of their risk.The Fed had to temporarily ease that rule in the midst of the pandemic as a glut of bank deposits and Treasury bonds drove up capital requirements on what are viewed as safe assets.Despite intense bank lobbying, the Fed let that relief expire last year but promised to review the overall rule. The Fed has yet to publish a proposal, leaving the job up to Raskin.COMMUNITY REINVESTMENT ACTThe central bank will also play a key role in a long-awaited overhaul of the Community Reinvestment Act (CRA) rules which promote lending in lower-income communities. The Fed, which shares responsibility for writing the rules with other bank regulators, hopes the CRA can be updated to reflect the growth in online banking, while still ensuring lenders make meaningful contributions to the poorer areas they serve.Raskin would likely have to be in place before the Fed could sign off on the changes. More

The Andean country’s economy grew 10.6% last year, beating expectations, as the entertainment, retail and manufacturing sectors soared, the government’s DANE statistics agency reported earlier on Tuesday.However, pressures amid supply-chain issues mean Colombia’s central bank will need to act quickly in the first half of this year to anchor inflation expectations and insure against upside inflation risks, said Hamid Faruqee, head of the IMF’s Colombia mission.”Controlling inflation … poses a challenge to Colombia’s central bank, a challenge that we see in other countries as well, including the United States,” Faruqee said during a virtual press conference. Colombia’s inflation came in at 5.62% in 2021, its highest in five years, while 12-month inflation in January hit 6.94%, more than double the central bank’s target of 3%.”For Colombia we see the need for additional interest rate hikes, front loaded in the first half of this year and broadly speaking we’re seeing markets have similar expectations shifting in that direction for some other major central banks,” Faruqee added.While the IMF forecasts Colombia’s economic growth at 4.5% this year – with help expected to come from consumption, investment and exports – the multilateral organization will revise its outlook following DANE’s report, Faruqee added. “We won’t know the final numbers yet until we reexamine our forecast,” he said. “Obviously we’ll make some adjustments as we look at the DANE release today.” More

WASHINGTON (Reuters) – The U.S. government said it faces “significant harm” if an a appeals court fails to reverse an injunction barring enforcement of President Joe Biden’s COVID-19 vaccine mandate for government workers, and that testing unvaccinated employees could cost up to $22 million a month.White House Office of Management and Budget Deputy Director Jason Miller disclosed in an declaration cited late on Monday by the Justice Department that the government would be hurt on several fronts if it cannot enforce the vaccine requirements.”While most federal civilian employees are fully vaccinated, hundreds of thousands of them are not vaccinated,” Miller said in the Jan. 28 declaration.The government hires about 20,000 workers monthly and currently cannot require them to be vaccinated, he added.On Jan. 21, a U.S. judge in Texas ruled Biden could not require federal employees to be vaccinated against COVID-19 and blocked the U.S. government from disciplining employees failing to comply.In September, Biden had issued an order requiring about 3.5 million workers to get vaccinated by Nov. 22 barring a religious or medical accommodation – or else face discipline or firing.Miller’s declaration said as of Jan. 21, roughly 2% of the federal civilian workforce “had neither affirmed they were fully vaccinated nor submitted a request for or received an exception.”U.S. COVID-19 workplace safety protocols require unvaccinated federal employees to submit to regular testing. Weekly testing “could cost taxpayers on the order of $11 million to $22 million each month, or $33 million to $65 million each quarter,” Miller wrote.Tens of thousands of unvaccinated federal employees do not have pending or approved requests for exception and tens of thousands of exception requests are pending, Miller wrote.Last week, a U.S. appeals court declined to block the vaccine ruling. The 5th Circuit Court of Appeals will hear the case on March 8.Miller said the ruling is forcing government agencies to revise “reentry and post-reentry plans and schedules” to include “setting up expanded COVID-19 testing programs at agencies.” He added if the injunction remains in place “it will imperil the federal government’s ability to protect the health and safety of the federal workforce.”The Justice Department cited then-President Ronald Reagan’s 1986 executive order requiring federal employees abstain from using illegal drugs, both on and off duty, and argued the president has “broad power to regulate the federal civil service.” More

CARACAS (Reuters) – The Venezuelan central bank’s gold reserves dropped seven tonnes last year to a new 50-year low, according to financial statements published by the bank on Tuesday.The quantity of gold bars at the bank’s vaults in Caracas fell to an equivalent of 79 tonnes, down from 86 tonnes equivalent at the end of 2020.Authorities have not provided details on the destination of the gold, which has been used in the past to shore up national finances amid a prolonged economic and social crisis.The value of the reserves through December last year was $4.56 billion, $493 million less than at the close of 2020, amid a fall in prices for gold.The average price for gold, according to estimates by the bank, was $1,799.48 dollars per troy ounce in 2021, compared to $1,833.76 per troy ounce in 2020.The bank for decades held more than 300 tonnes equivalent of gold, but between 2015 and 2017 the government began using the precious metal as a collateral for loans with international banks.A fall in oil production and United States sanctions, which have stymied crude exports, have led the government of President Nicolas Maduro to use the gold as a funding source.The opposition alleged in March last year that the government sent gold to Mali on Russian-owned planes and that it was resold primarily in the United Arab Emirates in exchange for euros and U.S. dollars. More

Toomey’s comments to reporters appeared to confirm the intention of Republicans on the committee, of which he is their ranking member, to boycott a meeting scheduled for Tuesday at 2.15 p.m. EST to vote on the slate of nominees to the Federal Reserve in protest against Bloom Raskin, Biden’s pick for the central bank’s Wall Street regulator.Toomey said he told Senator Sherrod Brown, the Democratic chairman of the committee “that if he wishes, he can proceed with five of the six nominees that he had intended to have a vote on. Republicans will attend. We will vote. Actually a significant majority of them will pass with Republican support if he were to do that. Or he can have none. And that’s his choice. So we’ll see what he decides this afternoon.” More