Inflation has soared to 8.3%, near a 40-year high, with the cost of items like food, gas and airline tickets having skyrocketed from 12 months earlier. The Fed is facing the difficult and high-risk task of curbing high inflation by sharply increasing interest rates without causing a recession. Widespread doubts about its ability to achieve that goal have helped send the stock market plunging.

Barr, who was a top Treasury Department official during the Obama administration, helped design the 2010 Dodd-Frank financial regulations after the devastating 2008 financial crisis. He is now the dean of the University of Michigan’s Gerald R. Ford School of Public Policy.

If approved by the committee and confirmed by the full Senate, Barr would join the Fed’s Board of Governors as the vice chair for supervision, a position created by the Dodd-Frank legislation. As one of seven members of the board, Barr would also have a permanent vote on interest rate decisions at each of the Fed’s eight policy meetings each year.

There has been only one other vice chair for supervision, Randal Quarles, whose term ended in January. Quarles drove several changes to financial regulation during his term that drew criticism from progressives, including Sen. Elizabeth Warren, a Democrat from Massachusetts. They argued that, among other moves, Quarles took steps that reduced the capital that banks are required to hold to ensure they remain solvent. Still, the banks overall emerged from the COVID pandemic in solid financial shape.

Warren has already endorsed Barr, a Rhodes Scholar who clerked for Justice David Souter on the Supreme Court. He also served during the Clinton administration at the White House, the Treasury Department and the State Department.

Biden chose Barr after his first pick, Sarah Bloom Raskin, ran into a wall of opposition from Senate Republicans and from West Virginia Democratic Sen. Joe Manchin. They argued that she would go too far to weigh the impact of climate change as part of the Fed’s regulatory authority and possibly discourage banks from lending to oil, gas, and coal companies.

This week, Manchin endorsed Barr and said the two had met and discussed “American energy security.”

Barr’s hearing comes after the Senate has approved several other nominees to the board, giving Biden a chance to put a Democratic stamp on the Fed. The Senate last week confirmed Jerome Powell to a second four-year term as Fed chair, and late last month approved Lael Brainard for the No. 2 position of vice chair.

This month, the Senate also confirmed Lisa Cook, an economics professor at Michigan State University, and Philip Jefferson, an economist at Davidson College, to the Fed’s board.

The House Committee on Financial Services on May 17 voted to approve an amended version of H.R.7022 – the Strengthening Cybersecurity for the Financial Sector Act of 2022 – and send the bill to the full House of Representatives for consideration.

The legislation aims to amend the “Federal Credit Union Act to modify requirements relating to the regulation and examination of credit union organizations and service providers.”

According to its sponsor Rep. Bill Foster, D-Ill., the bill “would grant the National Credit Union Administration (NCUA) and the Federal Housing Finance Agency (FHFA) the authority to oversee third party vendors employed by the entities under their purview.”

“This authority – currently utilized by all other industry regulators – was previously temporarily granted to the NCUA and FHFA but has since expired, leaving a dangerous regulatory gap and leaving consumers and families at risk,” the congressman’s office said. “This bill would bring parity amongst our regulators to ensure that our financial services and housing industries are well protected against cyberattacks.”

At the May 17 committee markup session, Rep. Andy Barr, R-Ky., argued against the legislation, saying “it may be a good faith effort to help the IT security of our financial system,” but said he worried about expanding “the size and scope of the Federal regulation under the guise of cyber security.”

Rep. Barr faulted the bill because it doesn’t use the word “cyber” in its text, and said the measure has more to do with financial regulation than cybersecurity.

PARIS, May 17 (Reuters) – The regulation of crypto-assets is likely to be discussed at a meeting of Group of Seven finance chiefs this week in Germany, French central bank head Francois Villeroy de Galhau said on Tuesday.

“What happened in the recent past is a wake-up call for the urgent need for global regulation,” Villeroy told an emerging markets conference in Paris, referring to recent turbulence in crypto-asset markets.

“Europe paved the way with MICA (regulatory framework for crypto-assets), we will probably … discuss these issues among many others at the G7 meeting in Germany this week,” he added.

Reporting by Leigh Thomas; Editing by Edmund Blair

Our Standards: The Thomson Reuters Trust Principles.

Image: Shawn/stock.adobe.com

17 May 2022

Europe
Reporter Carmella Haswell

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ESMA submits final reports on CCP resolution regime

The European Securities and Markets Authority (ESMA) has published six final reports of its review of the CCP Recovery and Resolution Regulation (CCPRRR) and these reports have now been submitted to the European Commission.

The final reports set out proposals for Regulatory Technical Standards (RTSs) on the content of central counterparies (CCPs) resolution plans, resolution colleges, valuation of CCPs’ assets and liabilities in resolution, and safeguards for clients and indirect clients.

It also contains guidelines on the circumstances under which a CCP is deemed to be failing or is likely to fail, as well as on the methodology to value each contract prior to termination.

Aiming to guide resolution authorities in developing effective resolution plans, the overarching goal of ESMA’s reports is to contribute to market preparedness generally and in the “unlikely event” of a CCP entering into resolution.

To determine whether a CCP has failed or is likely to fail, the relevant authorities should assess the available objective elements as they relate to the availability and adequacy of the CCP’s recovery tools, the pre-funded and committed financial resources still available to the CCP, and the liquid resources and liquidity arrangements still available to the CCP.

The authorities will also need to consider the operational capacity of the CCP and other requirements for continuing authorisation.

They should also be prepared for situations where a CCP is unable to manage the default of one or more clearing members, and where a CCP is unable to address a non-default event that results in unmanageable losses for the CCP. ESMA notes that these are both typical circumstances that may result in a CCP’s failure.

According to ESMA, the determination that a CCP is failing or likely to fail should remain an expert judgement and should not be automatically derived from any of the objective elements alone.

The European Commission has three months to decide whether to endorse the proposed standards under a Delegated Regulation.

Britain could become a world leader in cultured meat production post-Brexit by outflanking the EU to bring the hi-tech products to market swiftly, industry leaders say.

Cultured meat is grown from animal cells in a bioreactor that can be powered by 100% renewable energy, thereby curbing both greenhouse gas emissions and animal cruelty.

EU product approvals for the technology will take up to three years but the lab-grown meat sector is hoping that a post-Brexit white paper on the national food strategy due in May could accelerate the UK process.

Figures in the £1.9bn global industry say they have already had meetings with the UK’s Food Standards Agency on the post-Brexit regulatory framework for the products.

In Singapore where products made from cultivated meat are already on sale, the evaluation process takes nine to 12 months.

“There’s definitely an opportunity for the UK to become one of the primary innovation hubs for these sorts of novel technologies,” Robert Jones, the head of the Cellular Agriculture Europe trade association told the Guardian.

“The UK is a large market and every company will be looking at it as an incredible commercial opportunity,” said Jones, who is also an executive for the Dutch startup Mosa Meat.

The company hopes to seek regulatory approval for two beef products later this year. Peter Verstrate, its co-founder, said that the UK “would be at least a year ahead of the EU” in bringing products to market if it adopted a six- to nine-month assessment period.

Last year the UK Food Standards Agency chair, Prof Susan Jebb, described lab-grown meat as one of “the new innovations that might help us to change course” away from climate catastrophe. A “lens of environmental sustainability” might be applied to novel, safe and sustainable foods, she suggested.

A Defra spokesperson said: “We want to create the best possible environment for innovators, investors and consumers, and encourage safe innovation in the sustainable protein sector.”

The EU’s regulatory process can be lengthy in part because approval is needed from experts of all 27 member nations.

Edward Bray, a spokesperson for the European Food Safety Authority (EFSA), stressed that its scientific assessments took place within a nine-month window – although the clock on this could be stopped “if further data or clarification are required”.

Beyond that, the approvals timeline “is in the hands of the EU legislators who are responsible for the regulatory processes,” he said. “This is outside the EFSA’s remit.”

The EFSA’s ability to return to a business with additional questions several months after an application was filed made investment and operations decisions very difficult, said Russ Tucker, the co-founder of Ivy Farm, which plans to file for approval of a cultured mince line in the UK this year.

“While I’m waiting for a decision, how can I then build a facility, deploy capital, recruit people, and get supply arrangements with supermarkets and restaurants? It’s very difficult to make those business decisions when there isn’t transparency on how the application is moving through the process,” he said.

“There’s a big opportunity for the UK to think about how to do things differently from the EU,” he added.

About a quarter of the world’s greenhouse gas emissions come from agriculture, mostly livestock production. Lab-grown meat could substantially reduce this, according to the UN’s Intergovernmental Panel on Climate Change – with some studies projecting emissions savings of up to 80%.

But food safety will be crucial as new technologies raise new risks. Cells used to make cultivated meat could become contaminated, or suffer “dysregulation,” as happens with cancer cells, after being multiplied many times.

The technology’s bioreactors are also energy intensive and, as with electric cars, the use of fossil fuel-powered grids would limit emissionsavings.

A recent report by the thinktank IPES-Food said claims that lab-grown meat was sustainable were “limited and speculative.” The paper also dismissed assumptions that the technology could help feed a more affluent world population of up to 10 billion by 2050.

“I would [also] be concerned that most of the data on [product] safety are coming from the firms themselves,” said Prof Philip Howard, an IPES-Food expert. “There aren’t enough independent studies. This is a very new technology and frankly it’s not commercially viable. There’s no way to make money on it so pushing for regulatory approval is premature.”

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Clare Oxborrow of Friends of the Earth added: “This is a technology that’s still in its infancy and poses many questions, including who owns and benefits from it.”

Meat processors such as JBS, Tyson and Cargill are increasingly investing in the startup sector, according to IPES-Food but states are getting in on the act too.

Last month, the Dutch government ploughed €60m (£51m) into cellular agriculture technology, shortly after moving to allow tastings of the slaughter-free tech. In Israel a clean meat consortium was also awarded an $18m (£14m) government grant.

Alistair Burt declared Brexit had cost the UK dearly as the departure from the European Union has worsened trade relations and heightened the cost of living crisis. The former Conservative MP argued the economy would be slower to recover from recent inflation figures as a consequence of the nation’s choice for independence. Speaking to LBC, Mr Burt said: “I do believe that leaving the European Union is currently costing us.

“I think most of the major think tanks that have reported suggest the cost, I can’t remember the latest figure, I think there was one that suggested £800 million a month, or something like that.”

He continued: “I think there is a general presumption among neutral commentators that, at present, there is a physical cost to the United Kingston having left the European Union in terms of the costs of goods and trade and the like, to the UK economy.”

Mr Burt suggested there was a strong knowledge among political commentators that Brexit had been detrimental to the Tory Government’s economy.

He added: “The UK economy will not grow as fast outside the European Union as it would’ve done inside and that will take some years to work through. 

“I would be perfectly convinced of that.”

The former MP defended his stance as a Remainer and claimed his current view was related to the cost of living crisis and not his referendum vote.

He said: “I make no secret of the fact that I voted to remain inside the European Union and I would not have left.

“However, the arguments about the cost of living crisis go beyond this.”

Read more: Sunak slated as Treasury using outdated policy failing to help Brits

Despite his criticism of Brexit, Mr Burt did acknowledge external global factors that had also contributed to the dismal state of economic affairs.

Mr Burt said: “It’s fueled, of course, by this change in wholesale energy prices, it’s fueled by the impact of the war in Ukraine on commodity prices, which will be particularly damaging in terms of grain and the like.

“This has little to do with leaving the EU and those costs are created by something different.” 

Despite these factors, the former MP was adamant that Brexit had significantly worsened the economic concerns for the nation.

Mr Burt however said he would not support a campaign to return to the European Union as this would cause further confusion in economic policy.

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He said: “The arguments for returning to the EU, it would be so disruptive now to run any sort of current campaign in relation to it.

“I don’t get the sense there’s an appetite for it in the UK, it is not as simple an equation as if we rejoined, suddenly there would be a change in finances.

“That time has passed, I’m sorry it has and I don’t regret my view or my vote but I do not think at the moment it’s a viable option.

“It’s not an instant solution for the sort of problems people are facing on a day-to-day basis.”

Derry Girls will come to an end with a 45-minute extended episode set at the time of the Good Friday Agreement.

It left many viewers to urge the PM to watch it as he could learn a lot.

The hit Channel 4 series, about a group of teenagers growing up in Northern Ireland in the 1990s, around the time of the IRA and loyalist ceasefires, is due to end with the third series.

The episode is set in the week of the referendum on the Good Friday Agreement, threatening to overshadow Erin and Orla’s joint 18th birthday party.

Series creator and writer Lisa McGee said: “Like all the very best 90s bands, I couldn’t resist ending our farewell tour with an encore for our loyal fans.

“I’m delighted to say we’ll be returning for one extended special – airing in the same week as our final episode.

Good Friday Agreement

“The special deals with the historic and momentous Good Friday Agreement vote, which coincides with the gang’s coming of age, they enter adulthood just as Northern Ireland embarks on a new future.

“I’m so proud of this show and of our incredible cast and crew and everything we’ve achieved over the past five years.

“What a journey it’s been. I’m so grateful Channel 4 gave me the space to end the stories of these characters that mean so much to me with this special. I really hope the fans love it as much as I do.

“Derry people aren’t great at saying goodbye so I will instead use one of our native expressions ‘That’s us away now’.”

Actress Siobhan McSweeney, who plays Sister Michael in Derry Girls, says that it was ‘incredibly poignant’ that the characters are filled with hope for peace at the end of the sitcom.

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Related: Truss accused of saying Brexit would only impact farmers carrying turnips – reactions