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Financial Oversight In The Biden Administration

Bretton Woods
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EDITOR NOTE: As of Biden’s second full day in office, following a flurry of executive orders to overturn critical segments defining the now-gone Trump era, it’s still too early to determine what financial oversight might look like under the new president. We know that Michael Barr, who, under Obama helped draft the Dodd-Frank Act, is Biden’s pick to lead the OCC. We know plenty about Janet Yellen, former Fed chair and our new Treasury Secretary. What we don’t know is who Biden will pick for the last seat in the Federal Reserve board of governors (which could have and should have gone to sound money advocate Judy Shelton). At the core of Barr’s Dodd-Frank efforts is the deceptive and foul Orderly Liquidation Authority measure that allows the banks to seize depositor funds as its own to bail itself out. Between Yellen and Powell, we’ll likely experience a Keynesian surge that will not only catapult our national debt to heights unseen but usher in a new hyperinflationary environment while extinguishing any competition from cryptocurrency competitors. These are just the beginning. The government and the banking system now have an ironclad grip on your money and future wealth prospects. Like many banking institutions that surprisingly have no real fiduciary responsibilities, the government and the Fed have at the top of their priorities the preservation of power for the State before the people. Don’t let this affect your financial holdings. It’s time for you to take it back by converting your cash to non-CUSIP gold and silver and storing your wealth in an accessible and secure private precious metals depository, where you can remain in control of your own money, and only you can determine the destiny of your wealth.

Yahoo Finance’s Julie Hyman, Brian Sozzi, Myles Udland, and Brian Cheung discuss economic outlook under Biden.

Video Transcript

JULIE HYMAN: As President Biden kicks off his days in office, his first full day in office, of course, as we've been talking about, he's been signing all these executive orders, but the team that he is assembling, his financial and economic oversight team is still taking shape.

Michael Barr, according to the Wall Street Journal, is going to be the head of the Office of the Comptroller of the Currency, and our Brian Cheung has been taking a look at this sort of staffing, and what it's going to look like in the Biden administration.

BRIAN CHEUNG: Well, yeah. As you mentioned, Julie, the financial regulatory team is really starting to come together under the Biden administration. Very influential when it comes to banking policy. Of course, not many people would be familiar with what the Office of the Comptroller of the Currency is. It's a sub-agency under the Treasury that works together with the Federal Reserve and the Federal Deposit Insurance Corporation as the main banking regulators here in the United States. And as you mentioned, the Wall Street Journal reporting that Michael Barr will be the Biden pick to head that administration.

A little bit more about Michael Barr himself, he's the Dean of Public Policy at the University of Michigan's Ford School. He did serve in the Obama administration. He was at the Treasury there. He was an assistant Secretary for financial institutions. Very knowledgeable in that bank regulatory space. So much so that he actually helped create the Dodd-Frank Act in 2010. Again, that post-crisis framework that was really used to put more stringent guardrails on the banking industry.

And this rounds out the appointments that we've already heard about so far. We've heard about Rohit Chopra at the Consumer Financial Protection Bureau, in addition to Gary Gensler, obviously, at the Securities and Exchange Commission. But there's going to be a number of other financial regulatory appointments that they can still announce in the future, which we don't know yet. One example would be at the Federal Reserve Board. Keep in mind, there are seven governors at the Federal Reserve. Currently, six of them were filled, a lot of them by the Trump administration. But there's still one vacancy because the Biden administration's inauguration yesterday officially closed the door on unnoted gold advocate Judy Shelton, again a Trump pick, for that spot. Now that door has closed, which means that the Biden administration could appoint one more person at the Federal Reserve, which in addition to monetary policy, has a lot of regulatory say as well.

And Randy Quarles, who's the Trump pick, he can stay on the Fed board through 2032. But his reign as the vice chair of supervision specifically ends in October of this year. So it could be interesting because the Biden administration could replace him at that spot as well. Something worth watching as we get into the middle of this year.

MYLES UDLAND: And Brian, just thinking broadly about the regulatory framework that the financial authorities are going to be looking at, certainly cryptos is a main question here. What are they going to do, if anything, as it relates to that? But also just broadly about the future of banking regulation, particularly since we had a crisis in the spring, all the rules that were put in place, all the Basel rules and the liquidity rules, basically worked. Right? There was no bank that said, I don't have any money, because they already had the money sitting there. Does that make regulators say, we should tighten these rules, we should loosen these rules, or is it proof that the current framework is kind of the one they want to roll with?

BRIAN CHEUNG: Well, Myles, whenever you say Basel, that's like my energy drink, which Brian Sozzi, he actually drinks an energy drink, but when you say Basel, that's what gets me all amped up. But yeah, as you mentioned, this is part of an international regulatory framework that was really put in place after the last financial crisis. And we know, for example, that a lot of the banks, as you mentioned, had no problem raising the amount of enormous capital that the regulators across the world had asked them to do after the last financial crisis.

So the question, of course, is now that we have a Republican administration that was out the door, which had largely been more sympathetic to maybe slight rollbacks in those provisions, will this Democratic administration be more aggressive about maybe wanting to further increase capital levels? That might be the case, if we saw a Lael Brainard led Fed, but of course, Chairman Powell is still there. And he seems to be OK with where capital levels are right now.

And I think when you talk to many analysts, they say, don't expect anything too aggressive when it comes to more stringent rules on the banking industry. Keep in mind that even if there were to be legislative change, there's still a 50-50 divide in the Senate. You still need some moderate Republicans to be on board with any sort of legislation that you have, which could really kind of guide policy somewhere more towards the center, as might be the case for other broad policy initiatives under this administration. Again, worth watching. But I would say, for the most part, not many people are expecting that much more stringent regulation, at least in the banking space over the next four years.

BRIAN SOZZI: You know, Brian, there's much more to me than energy drinks. I'm just saying. I know I haven't seen you physically in a year, but I got a lot of other stuff going on. But I appreciate the shout out.

BRIAN CHEUNG: Yeah, you've got to be caffeinated somehow. That's what gets me amped.

BRIAN SOZZI: Got it. Yep.

JULIE HYMAN: All right. Thanks so much for, Brians, for that. We'll check back in with you later.

Originally posted on Yahoo! Finance

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