Federal Reserve System – Page 21 – Lawyers Write the Bets. Bankers Sell the Bets.

April 10, 2023September 4, 2023

Interbank Market News Scan: The Asset-less Shall Inherit the Earth

The irony is that the wrong capital allocation decisions could result in the evaporation of the income generating asset. The asset itself may have to be sold to pay off the debt that has been used to sustain the borrower. Failure to acknowledge the event of paying the balloon payment with the sale of the asset makes the “generational wealth” political argument proffered by some low-income and unbanked advocacy groups sound asinine. Continue reading Interbank Market News Scan: The Asset-less Shall Inherit the Earth

April 9, 2023September 4, 2023

Interbank market news scan: Incentivizing the market for a CBDC.

Why not amend the Federal Reserve Act so that depositors can create and enter their own overnight market where they authorize the exchange of funds at some rate agreed to by depositors? Rather than risk less than optimal participation in the digital currency system including the risk that black markets for US currency are created, the government and the Federal Reserve could consider such an incentive system. Continue reading Interbank market news scan: Incentivizing the market for a CBDC.

April 7, 2023September 4, 2023

Interbank market news scan: The jobs report wraps up the Holy Week.

Mr Biden may have missed an opportunity to craft a narrative that emphasizes the importance of getting ahead of the inflationary impact of blocks of emerging economies threatening to transition from the US dollar to resource-backed currencies. These threats have yet to materialize into something definitive and until then the inflationary impact of dumping the US dollar or at least complementing it with other currencies is a way off. Continue reading Interbank market news scan: The jobs report wraps up the Holy Week.

April 6, 2023September 4, 2023

Interbank market news scan: NFA issues rule to protect against manipulating bitcoin and ether prices.

The Federal Reserve would like to see a looser employment market, including reduced wage pressure and an uptick in unemployment. If these measures do not work to control inflation into 2024, more intrusive measures targeting consumer spending are anticipated. Continue reading Interbank market news scan: NFA issues rule to protect against manipulating bitcoin and ether prices.

April 3, 2023September 4, 2023

Interbank Market News Scan: Central bank digital currencies are likely more about efficiently changing the money supply.

The Federal Reserve’s intent around central bank digital currency is to create a direct and efficient way to manipulate money supply. A programmable digital currency that regulates spending via some algorithm or all out reduces dollar amounts in accounts again by some algorithm would save the Federal Open Market Committee two days of hair pulling decisions. CBDCs would amount to their unique version of ChatGPT, an artificial monetary policy environment that reduces the FOMC’s role to monitoring and advising versus direct policy action. Continue reading Interbank Market News Scan: Central bank digital currencies are likely more about efficiently changing the money supply.

March 29, 2023September 4, 2023

Custodia failed to wet the Fed’s beak.

Custodia’s application should have interwoven the currency validation narrative into its sales pitch to the Fed. It would still have had to address the illicit activities/AML issues, but the Board’s ears may have stayed open a little while longer, giving Custodia time to finagle the right language or work out some compromise. Continue reading Custodia failed to wet the Fed’s beak.

March 20, 2023September 4, 2023

Unless Elizabeth Warren can persuade Joe Biden to fire Jerome Powell, the Chair is going nowhere …

Senator Elizabeth Warren, Democrat of Massachusetts, lit in, as usual, to Jerome Powell, chairman of the Board of Governors of the Federal Reserve System. Mrs Warren shared today on “Meet the Press” her dissatisfaction with Mr Powell’s handling of bank regulation in the wake of three bank failures: Silvergate Bank, Silicon Valley Bank, and Signature … Continue reading Unless Elizabeth Warren can persuade Joe Biden to fire Jerome Powell, the Chair is going nowhere …

March 11, 2023September 4, 2023

Interbank Market News Scan: Does the State have an interest in sustaining SVB Financial? No.

Michael S. Barr, Vice-chair of the Board of Governors of the Federal Reserve System, warned the U.S. earlier this week that banks should take a careful and cautious approach to engaging in crypto-asset related activities. Banks need to determine whether their crypto-related activities are “legally permissible” before engaging in them. Mr Barr, who is responsible … Continue reading Interbank Market News Scan: Does the State have an interest in sustaining SVB Financial? No.

March 9, 2023September 4, 2023

Interbank Market News Scan: All quiet on the Federal Reserve front …

The media is saying this …. The Chicago Mercantile Exchange’s FedWatch tool has done a 180 degree turn from its 9 February 2023 consensus that the Board of Governors of the Federal Reserve System would only increase its fed funds target range by 25-basis points. The CME forecast a .908 probability of the Fed targeting … Continue reading Interbank Market News Scan: All quiet on the Federal Reserve front …