Reserve banking

Federal Reserve Bank Chief Discusses Crypto and Climate Change

Michael S. Barr has been confirmed as Federal Reserve Vice Chairman for Oversight, having been appointed by the Biden administration in July this year.

He is a member of the Board of Governors of the Federal Reserve. This new title for Barr was created after serving under former President Obama as Assistant Secretary of the Treasury for Financial Institutions.

On Wednesday, he delivered his first public address since taking office, presenting his proposed program at the Brookings Institute’s Hutchins Center on Fiscal and Monetary Policy. The aim of this speech was to make the financial system safer and fairer.

One of the main issues on Vice President Barr’s agenda concerns cryptocurrencies. He wants to regulate these currencies. In his speech, he specifically mentioned stablecoins, cryptocurrencies that attempt to peg their market value to an external source. Barr said these funds, along with other unregulated private funds, could pose financial stability risks. In his speech, Barr said,

“History shows that in the absence of proper regulation, private money is subject to destabilizing runs, financial instability and the potential for widespread economic damage.”

Before banks were regulated, there were several financial crises caused by this lack of stability. Barr called on several regulatory agencies to work together to pass legislation on the subject as soon as possible.

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Another potential issue addressed by Barr in his speech relates to financial issues related to climate change. Banks have their eyes on how this environmental concern will affect their bottom line. The Federal Reserve is currently looking into the risks posed by climate change and has been more vocal about it lately.

Barr intends to work with the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation to give banks better guidance on how to handle these issues.

The goal according to Barr’s speech is to “provide guidance to major banks on how we expect them to identify, measure, monitor and manage the financial risks of climate change.” Next year there will be a program to assess the long-term risks of climate change on major institutions.

He also talked about fairness in financial institutions. The first way to increase fairness is to ensure that banks use financial capacity, which involves price transparency to allow buyers to make more informed choices.

Another way to promote equity is to ensure access to safe, low-cost banking services for people with low to moderate incomes, using methods such as fast digital payments. The last means mentioned by Barr is consumer protection, which will be achieved through the supervision and regulation of business practices.

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In his new post, Barr intends to work with the Board of Governors, as well as other agencies, to ensure the Federal Reserve promotes fair and equitable practices and ensures the financial success of big business. Americans.