New Fed Banking Chief Targeting Crypto And Climate Change As Top Priorities

During his speech on Wednesday, the Federal Reserve’s new banking regulator called for action on stablecoins, climate change preparations, and safety and fairness in the financial sector. Since his confirmation by the Senate, Fed Governor Michael Barr, who holds the title of vice chair for supervision, gave his first policy speech.
His priorities include urging Congress to enact comprehensive regulation of stablecoins, 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 facing the largest institutions.” And he said a push for a system that is not only financially sound but also fair, particularly to those at the lower end of the income spectrum with less access to banking services, would be a major priority. Barr presides over a financial system that is generally thought to be well capitalized but was still hit by market disruptions requiring Fed intervention in the early days of the Covid crisis. The rise of cryptocurrencies and stablecoins also has posed challenges for the Fed, which is exploring a potential digital currency of its own. He called for increased scrutiny of the crypto industry and its risks. On climate change, Barr waded into an area that has drawn criticism from some Republican congressional leaders who believe the Fed is overstepping 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 narrow.”

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