23rd September 2021 > > Regulatory developments.

tl;dr

The CCC welcomes sensible regulatory developments.

Market Snap

Market Wrap

Evergrande stock up nearly 20% overnight suggesting that this wobble might soon be over.

Occasional Series – Climate change

Many people claim, almost with religious fervour, that this is the single biggest issue facing the world.

I am not getting into a debate as to the merits or otherwise of that claim, but I do wonder why some of its most vocal supporters seem intent to destroy their own credibility.

We already know that Alok Sharma, Chairman of COP26, Allegra Stratton, Boris Johnson’s climate spokeswoman and Dr Gail Bradbrook, one of the founders of that Marxist organisation, Extinction Rebellion, all drive diesel cars.

John Kerry, climate-change envoy for Joe Biden, flew in his personal private jet to Barak Obama’s 60th birthday party. That is the 16th flight he has taken in 2021 in his personal private jet.

When Emma Thompson flew from LA to London specifically to attend and speak at an XR protest, she did at least use a scheduled flight. First class of course.

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To add to this hall of shame I present, Liam Norton, a spokesman for Insulate Britain, an organisation that is one of the few that would actually benefit from appointing a diversity officer. Their meetings and protests would pass the Klu Klux Klan test for racial purity, and I suspect Iran’s ban on homosexuality would not be at risk of being breached, but I digress. (*)

Norton stormed out of a live TV interview yesterday after admitting that his home is not insulated.

He stormed off having taken offence at the very apt description of being a hypocrite.

Norton is 38 – is that too old to be labelled a snowflake too?

(*) In a world were some look to take offence at every opportunity, let me assure you that the CCC does not agree with either the Klu Klux Klan or Iran’s leaders. Both organisations are despicable.

Curious Cryptos’ Commentary – Regulatory developments

On the 11th June 2021 the CCC reported that the Basel Committee for Banking Supervision (BCBS) had determined that cryptos would be given the highest risk rating possible. An arcane and sometimes tedious topic, these decisions about risk weightings are of the highest importance to banks, their balance sheets and profitability, and of course the cost of servicing clients.

At the time a lot of doom-mongers were whingeing about BSBS, but the CCC once again found itself out on a limb by welcoming this news.

I do not wish to rehash those arguments (back copies available on request if you want more information) but they essentially boiled down to the fact that this decision removed uncertainty for those banks wanting to provide crypto products to clients, and that this decision shows the growing acceptance of cryptos by the regulatory and legal infrastructure around banking.

Both these conclusions sound very positive to me, at least.

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The Global Financial Markets Association (GFMA), backed by J.P. Morgan and Deutsche Bank amongst others, is pushing back against this risk classification, arguing it should be less onerous.

They claim, somewhat hysterically, that the current rules are pushing crypto trading and crypto products into offshore, unregulated entities, thus putting investors at risk.

Some people just do not get it.

Until recently, ALL crypto trading was conducted via unregulated entities. Until recently there were no other crypto products except for spot markets. Even today, some of those trading exchanges still rely on a physical meeting in which cash is exchanged for a paper wallet. In some countries – those wishing to enforce a crypto ban for instance – this is sometimes the only option for an individual wishing to exchange fiat for cryptos.

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The GFMA is also pushing back strongly against what they perceive as an unfair focus on stablecoins.

It is true that the regulators seem to be more worried about stablecoins than cryptos in general. Gary Gensler, Chair of the SEC, has described them as “poker chips”.

The regulatory and legal landscape is always changing and developing. Banks should get on with the task of developing products, and product strategies, that are of tangible benefit to their clients, and prove robust in the face of a sometimes-volatile market.

That is the way to get regulators on side, not by being overly aggressive through some talking shop that no-one ever listens to (except the CCC perhaps?)