FSOC

In a letter to Treasury Secretary Janet Yellen, Sen. Sherrod Brown, D-Ohio, said regulators should have supervisory authority over crypto activity.

The report from the Financial Stability Oversight Council on cryptocurrency also urges action to prevent regulatory arbitrage and for regulators to study direct access to markets by retail customers.

Critics of the council say it hasn’t been as effective as it could be, but Treasury’s Nellie Liang said in an interview that right now it is “in a good place.”

Regulators and the Biden administration are considering how to respond to the sharp growth in digital assets pegged to fiat currency. Their options include establishing rules like those for bank deposits and having the Federal Reserve issue a digital dollar that competes with private-sector stablecoins.

Members of the Financial Stability Oversight Council are trying to light a fire under banks to adopt an alternative to the foundational reference rate.

President Biden plans to direct his administration to develop a strategy on climate-related risks for public and private financial assets, according to a draft document seen by Bloomberg News.

The Financial Stability Oversight Council has struggled to find its footing since its creation in Dodd-Frank. The Treasury secretary has signaled a more aggressive role for the panel, including reviving its authority to target nonbank behemoths.

Treasury Secretary Janet Yellen conducted her first meeting as chair of the Financial Stability Oversight Council and set the stage for a potential recalibration of the panel's role after it was weakened in the Trump administration.

Treasury Secretary Janet Yellen said she prefers to have the Financial Stability Oversight Council flag hazardous activities by nonbanks rather than subject specific firms to heightened supervision.

Banks weren't involved in the trading frenzy, but some observers say the regulatory response should address risks to all financial institutions.