President Joe Biden will nominate Michael Barr as the Federal Reserve’s top manager in charge of major banks. Barr, who served as Assistant Secretary of the Treasury for Financial Institutions during the Obama administration, appeared here at the Treasury Department meeting in Washington, DC on November 30, 2010.
Andrew Harrer | Bloomberg | beautiful pictures
The Federal Reserve’s new banking regulator outlined a broad agenda in a speech Wednesday that promotes action on stablecoins, climate change preparedness measures, and climate change preparedness measures. both safety and fairness of the financial industry.
Fed Governor Michael Barr, whose title of vice chairman of oversight gives him broad powers over the nation’s banks, delivered his first policy speech since it was confirmed by the Senate.
Among his priorities: pushing Congress to enact comprehensive regulation of stablecoins or cryptocurrencies pegged to other assets, usually currencies.
He also said that next year the Fed will launch an exercise “to better assess the long-term climate-related financial risks faced by the largest institutions.”
And he said promoting a system that is not only financially sound but also fair, especially for those on lower incomes with little access to banking services, would be a big priority.
“Fairness is fundamental to financial oversight, and I am committed to using regulatory, monitoring and enforcement tools so that businesses and households can access the services they need, the information they need, and the information they need. necessary to make their financial decisions and protect them from unfair treatment,” Barr said in a speech at the Brookings Institution in Washington, DC.
Barr currently runs a financial system that is generally thought to be well-capitalized but is still affected by market disruptions that required Fed intervention in the early days of the Covid crisis. The rise of cryptocurrencies and stablecoins also poses challenges for the Fed, which is exploring a potential digital currency of its own.
He called for increased scrutiny of the cryptocurrency industry and the risks it poses.
“Stablecoins, like other unregulated private currencies, can pose financial stability risks,” Barr said. “I believe that Congress should urgently work to pass much-needed legislation to bring stablecoins, especially those designed to serve as a means of payment, within the prudent regulatory circle. .”
On the issue of climate change, Barr has entered an area that has received much criticism from some Republican congressional leaders who believe that the Fed is exceeding its mandate.
Barr said the Fed wants to understand the risks that climate events pose to the system, while acknowledging that the central bank’s interest in the issue is “important, but limited.”
Together with the Office of the Comptroller of the Currency and the FDIC, the Fed is looking for ways for banks to “identify, measure, monitor, and manage the financial risks of climate change. Additionally, we’re looking at it. how to develop and perform climate risk scenario analyses.”
On the issue of fairness, Barr said he wants a system that gives consumers access to services and information to protect them from abuse.
“As innovative financial products evolve and grow rapidly, the excitement can go beyond a proper risk assessment,” he said. “As we have seen with the development of crypto assets, in a rapidly growing and volatile market, participants may believe they understand new products only to find out that they do not exist. , and then suffered substantial losses.”
Barr said he will also work to ensure that banks involved in crypto-related efforts have risk controls in place.
