A research paper says the president’s constant criticisms are driving Fed policy, directly or indirectly; the huge demand by banks for cash may be the result of tougher regulations.
Members of the House Financial Services Committee cited leveraged lending, cybersecurity and the switch to a new interest rate benchmark among potential systemic risks that keep them up at night.
One Republican lawmaker went so far as to suggest that Congress should try to block the central bank's effort, but Democrats said FedNow will promote competition in real-time payments.
Rep. Patrick McHenry, the top Republican on the House Financial Services Committee, proposed having the central bank update Congress on measures to strengthen its own cybersecurity as well as that of institutions under its watch.
The fintech is now worth $10 billion more than its top rival, Square; cost cuts, asset growth and share buybacks could offset the headwinds from low rates.
Steven Zeisel, a lobbyist with the Consumer Bankers Association who died Sunday, was a strong voice for financial institutions navigating post-crisis regulations. He also had the ear of policymakers on the other side of the table.
Vikram Pandit says digital push could force “creation of 21st century regulation”; Fed will conduct $75 billion overnight repurchase agreement operation.
Despite concerns over how regulatory requirements affect short-term funding markets, the central bank is not considering a reduction in the liquidity coverage ratio, Jerome Powell said.
