The Washington Report For week ended November 10, 2017 | KPMG | US

Washington Report 360 | November 10, 2017

The Washington Report For week ended November 10, 2017

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Highlights

Federal Reserve System leadership changes:

  • Randal K. Quarles was sworn in as member of the Board of Governors of the Federal Reserve System and as Vice Chair for Supervision; It is anticipated he will focus on principles-based supervision rather than rulemaking.
  • William C. Dudley, president and chief executive officer of the Federal Reserve Bank of New York, announced that he will retire in mid-2018, setting off a search to fill this critical position in both monetary and regulatory policy.
  • Jerome Powell confirmation hearing scheduled for November 28.
     

 

Financial services policy news

Randal K. Quarles was sworn in as a member of the Board of Governors of the Federal Reserve System and as Vice Chair for Supervision. In public comments, Quarles reportedly said "everything is up for a fresh look" and that “changing the tenor of supervision” would be the biggest part of his job.

William C. Dudley, president and chief executive officer of the Federal Reserve Bank of New York, announced that he will retire in mid-2018.

The Senate has scheduled the confirmation hearing of Jerome Powell, FRB governor and nominee for FRB Chair, for November 28. Mr. Powell recently spoke before the Alternative Reference Rates Committee on transitioning away from LIBOR.

Leveraged lending continues to be a focus for policy discussion. According to a news report, Acting Comptroller of the Currency Keith A. Noreika said the 2013 guidance is ineffective and should not be binding.

In a recently published opinion, CFTC Chairman Christopher Giancarlo discussed the possibility that Brexit negotiations will result in EU financial authorities regulating financial institutions outside of the EU, adding that "overlapping and uncoordinated regulation by the EU would be disruptive, expensive and detrimental to the U.S. trading markets and economy."

CFTC Commissioner Brian Quintenz stated before an industry roundtable that the CFTC's de minimis threshold for swap dealer registration should be based on risk-based metrics rather than activity-based notional value.

SEC Chairman Jay Clayton discussed governance and transparency in both SEC operations and in service of investor interests. Clayton touched on several issues, including Initial Coin Offerings, which he singled out for a "distinct lack of information about many online platforms."

Acting Comptroller of the Currency Keith A. Noreika argued that "mixing banking and commerce can generate efficiencies" and "improve bank and commercial company performance with little additional risk."

 

Financial services legislative and regulatory news

The CFTC’s Division of Clearing and Risk announced no-action relief from the swaps clearing requirement for three international financial institutions.

The SEC approved so-called "pay-to-play" rules, effective December 6, 2017, that allow Capital Acquisition Brokers to engage in distribution or solicitation activities for compensation with government entities on behalf of registered investment advisers.

The OCC issued a revised "Subordinated Debt" booklet of the Comptroller’s Licensing Manual to incorporate updated requirements for issuing subordinated debt and including it as tier 2 capital.

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