Plus, the DUP’s plan to regain Northern Ireland’s first minister post
Plus, the DUP’s plan to regain Northern Ireland’s first minister post
WASHINGTON (AP) — Michael Barr, President Joe Biden’s pick to be the Federal Reserve’s top banking regulator, pledged Thursday to help reduce high inflation and provide “clear rules” to govern financial innovation.
“I would be strongly committed to bringing down inflation to the Federal Reserve’s target” of 2%, Barr said in testimony to the Senate Banking Committee, which is considering his nomination.
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.
The Federal Deposit Insurance Corporation (FDIC) recently approved a final rule regarding statutory authority prohibiting misrepresentations about FDIC deposit insurance or misusing the FDIC’s name or logo.
“These practices not only harm those who are targeted with the false promise of deposit insurance but, if left unchecked, could also undermine confidence in the FDIC, FDIC-insured banks, and the U.S. banking system,” Acting Chairman Martin J. Gruenberg said.
The final rule is slated to take effect 30 days after publication in the Federal Register. In recent years, the FDIC has observed a rise in the number of circumstances in which individuals or entities made false or misleading representations about deposit insurance or misused the FDIC’s name or logo.
According to the FDIC, to provide transparency, the final rule clarifies the FDIC’s procedures for identifying, investigating, and, where necessary, taking formal and informal enforcement actions against individuals or entities to address the violations.
“I would further note that, while the rule adopted by the Board is an important step, the FDIC is also considering revising and clarifying the agency’s official sign and advertising rules related to FDIC deposit insurance,” Gruenberg said via a statement regarding the final rule adoption. “The FDIC official sign and advertising rules were last significantly updated in 2006. In that time, it has become more challenging for consumers to know when they are dealing with an insured institution and that their money is safe in an insured product.”
The King County Council in Seattle, Wash., has established a Cannabis Safety Taskforce following an uptick in armed robberies at cannabis shops within the county.
“A dedicated Cannabis Safety Taskforce will be able to focus on keeping our local communities safe from the pattern of armed robberies targeting cannabis stores and manufacturers across the region,” said King County Council Member Reagan Dunn, who co-sponsored the measure with Council Member Jeanne Kohl-Welles. “This legislation sends a strong message that King County plans to hold those committing these crimes responsible for their actions. I could not be more proud of this bipartisan legislation and am grateful to my colleagues for their support.”
The council members cited a Washington Cannabusiness Association report determining that 70 robberies have been recorded at cannabis retailers statewide since the beginning of this year, with the rise being attributed in part to federal banking regulations resulting in cannabis businesses operating as all-cash entities.
“During and since my time in the state legislature, I have been a staunch supporter of the legalization and regulation of the medicinal and recreational use of cannabis,” Kohl-Welles said. “However, the federal banking regulations that force businesses to operate as all-cash businesses have ended up endangering employees, customers, and communities. As such, this motion serves to explore how local jurisdictions can better support these businesses, while efforts to reform banking laws at the federal level remain underway.”
Bank of England’s deputy governor for financial stability, Sir Jon Cunliffe, has warned of hard times ahead for cryptocurrency investors as the Federal Reserve and other central banks tighten monetary policy.
Bank of England’s Executive Warns About Crypto
Sir Jon Cunliffe, deputy governor for financial stability at the Bank of England (BOE), had a warning for crypto investors at a Wall Street Journal conference Tuesday, Reuters reported.
The Bank of England executive cautioned that crypto investors should expect more difficult times ahead. He explained that as the Federal Reserve and central banks around the world tighten financial conditions, investors will be more attracted to safer assets.
Replying to a question about whether rising interest rates would ramp up pressure on cryptocurrencies, Cunliffe was quoted as saying:
Yes, I think as this process continues, as (quantitative tightening) starts in the U.S. … I think we’ll see a move out of risky assets.
Federal Reserve Chairman Jay Powell said last week that the Fed will continue tightening monetary policy until it sees “clear and convincing” evidence that inflation is falling to the target rate of 2%.
Cunliffe also discussed another factor affecting the crypto market. Noting the Russia-Ukraine war is prompting investors to move funds into safer assets, he advised:
When there’s a move out of risky assets, you would expect the most speculative assets to be the ones most affected.
In November last year, Cunliffe said that cryptocurrency’s threat to the stability of the British financial system was “getting closer,” urging regulators to take action.
In December, he said that the value of cryptocurrencies could fall sharply, stating: “Their price can vary quite considerably and they could theoretically or practically drop to zero.”
What do you think about Sir Jon Cunliffe’s comments? Let us know in the comments section below.
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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.
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Reporting by Leigh Thomas; Editing by Edmund Blair
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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.”
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.