October 28, 2021
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DOJ reportedly looking into Visa's deals with fintechs
(Anna Moneymaker/Getty Images)
Department of Justice investigators are examining whether financial incentives provided by Visa to PayPal and Square prevented the fintechs from using other money transfer technologies or card networks, sources say. The inquiry reportedly is part of the DOJ's antitrust investigation into Visa first reported in March.
Full Story: The Wall Street Journal (10/27),  Reuters (10/27) 
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The Commerce Department's initial estimate of third-quarter economic growth, due for release today, is expected to show a decline in growth for the first time in over a year, largely because of the Delta coronavirus variant. "Delta is the biggest reason why we have this noticeable deceleration," Moody's Analytics economist Ryan Sweet says, but there is evidence growth began to revive in September as the effect of the variant faded.
Full Story: Reuters (10/28),  The New York Times (10/28),  U.S. News & World Report (10/27) 
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Chopra: CFPB closely watching big tech in retail finance
Consumer Financial Protection Bureau Director Rohit Chopra told the House Financial Services Committee the bureau aims to ensure big tech companies don't dominate competition and limit consumers' options in the retail finance and payments sectors. Payment systems operated by major tech companies should adhere to consumer protections and not "undermine a fast, fair and transparent system," said Chopra.
Full Story: HousingWire (10/27),  The Hill (10/27),  Forbes (tiered subscription model) (10/27),  Bloomberg Law (10/27) 
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Entities that expect to use Libor after the benchmark expires at year-end through use of a synthetic Libor, or "zombie Libor," are mistaken, acting Comptroller of the Currency Michael Hsu has said during an event sponsored by the Alternative Reference Rates Committee. "Let me be clear: The federal financial regulators have said no new Libor exposures -- zombie or otherwise -- after Dec. 31, 2021, and we mean it," Hsu said.
Full Story: Practice Insight (10/27) 
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Yields on 10- and 30-year Treasurys have suffered the steepest declines since July amid concerns about how well the economy would manage tapering of asset purchases and interest-rate increases. However, shorter-dated instruments have continued to trade well, with a sale of 5-year Treasurys netting $61 billion.
Full Story: MarketWatch (tiered subscription model) (10/27),  CNBC (10/26) 
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Senators ask CFTC's Behnam about climate, cryptoassets
Behnam (Commodity Futures Trading Commission)
In a hearing that is part of his nomination to become permanent chair of the Commodity Futures Trading Commission, acting Chair Rostin Behnam has testified before the Senate agriculture committee on issues including climate risk to financial markets, voluntary carbon markets and the regulatory environment for digital assets.
Full Story: The Wall Street Journal (10/27),  Reuters (10/27),  The Block (10/27),  BNN Bloomberg (Canada) (10/27) 
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How COP26 will shape ESG and impact investing
Simon Puleston Jones, co-founder and CEO of Climate Solutions, explains how COP26 might influence the flow of capital aimed at tackling the climate crisis. Simon also explains the educational journey taking place around ESG and impact investing.
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The Future of Finance
The US Securities and Exchange Commission is reportedly only allowing unleveraged exposure to bitcoin futures contracts and has asked Valkyrie Investments to withdraw its leveraged bitcoin exchange-traded fund proposal, according to sources. Meanwhile, Direxion has filed an application for an ETF that effectively bets against the ProShares ETF's bitcoin futures contracts.
Full Story: The Wall Street Journal (10/27) 
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Despite some skepticism among traditional institutions, banks should embrace open banking to improve consumers' experience and to help the sector evolve, says Citigroup Chief Innovation Officer Vanessa Colella. "I think 100% of big banks understand that we need to partner with fintech and tech companies to work in data and cyber, not just for client-facing tech, but also for enabling infrastructure at the bank as well," Colella says.
Full Story: American Banker (10/27) 
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Bank of America is not merely a traditional bank but is also "clearly a technology company," CEO Brian Moynihan says. "We spend about $3.5 billion a year on new code implementation. New products and services are driven by technology," Moynihan says.
Full Story: Yahoo (10/26) 
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Payments
Visa aims to be major connector between consumers, merchants and banks for buy now, pay later offerings, said CEO Al Kelly. "We're bringing scale to the disruptors," Kelly said.
Full Story: American Banker (10/27) 
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    Industry Watch
    PNC Financial Services Group Chief Economist Gus Faucher expects supply chain bottlenecks to ease, despite a 0.4% month-over-month decline in September for durable goods orders, as manufacturers faced higher material and labor costs. "I expect that supply chain issues will be worked out over the next six months or so," Faucher says. "Demand for manufactured goods remains solid, and business investment will be a driver of economic growth in 2022."
    Full Story: The Wall Street Journal (10/27),  MarketWatch (tiered subscription model) (10/27) 
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    Sustainable Finance
    China's policymakers face a dilemma as their announced plan to achieve zero carbon emissions by 2060 competes with the need to supply electricity for industrial production and the domestic needs of its populace. The country remains heavily reliant on coal to generate energy, and a UBS report estimates it will need investment of up to $2 trillion a year to make the transition to cleaner sources.
    Full Story: The Wall Street Journal (10/27) 
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    Digital Assets
    Federal Reserve board member Randal Quarles challenged the suggestion by European Central Bank President Christine Lagarde that central banks can issue digital currencies to improve financial inclusion without harming the retail banking sector by distributing the currencies through banks. "You're saying that I'll still need a bank account in order to use my central bank digital currency, so I need a bank account anyway, so how is this helping financial inclusion?" he asked.
    Full Story: MLex (10/25) 
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    Cybersecurity
    The State Department will be home to the new Bureau of Cyberspace and Digital Policy, which will focus on issues such as internet freedom and cyberthreats, Secretary of State Antony Blinken says. The country has a "major stake in shaping the digital revolution that is happening around us and making sure that it serves our people, protects our interests, boosts our competitiveness and upholds our values," Blinken says.
    Full Story: The Hill (10/27) 
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    Data of the Day
    New-home sales surged 14% in September to a seasonally adjusted annual rate of 800,000 units, according to the Commerce Department. The total is the largest in six months, although the cost of a new home increased in September by 18.7% to a median price of $408,800.
    Full Story: CNBC (10/27) 
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    About the Editor
    Colin Hogan bio (updated)
    Colin Hogan is the editor of several SmartBrief newsletters focused on the global financial system and capital markets.

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