Weekly Global News Wrap: Regulator mulls conservative bitcoin rule; JPMorgan amassing cash amidst inflation woes, says CEO
And Bank of America unveils plan to bring employees back to the office.
The Basel Committee on Banking Supervision has proposed that banks set aside enough capital to cover losses on any bitcoin holdings in full, in a "conservative" step that could prevent wide-scale use of the cryptocurrency by big lenders.
The regulator said in a consultation paper that whilst bank exposures to crypto assets are limited, their continued growth could hike risks to global financial stability from fraud, cyber attacks, money laundering and terrorist finance if capital requirements are not introduced.
Major economies including China and the United States have signalled in recent weeks a tougher approach, whilst developing plans to develop their own central bank digital currencies.
JPMorgan Chase has been “effectively stockpiling” cash rather than using it to buy treasuries or other investments because of the possibility that higher inflation will force the Federal Reserve to boost interest rates, its CEO Jamie Dimon said.
Dimon spoke about whether the higher inflation is a result of temporary aspects of the reopening or if it could be more lasting. Fed officials have called the current spike in inflation transitory, but others have warned about the consequences should the Fed ignore inflation.
JPMorgan’s move to accumulate cash accounts for about half of the decrease in anticipated net interest income this year, Dimon said, whilst the other half comes from lower credit card balances. The bank now expects $52.5b in net interest income in 2021, down from the $55b it disclosed in February.
Bank of America CEO Brian Moynihan has detailed their approach to bringing employees back to the office, adding that those who have received the coronavirus vaccine are the priority for now.
“About 60,000 people in the U.S. ... have told us that status,” Moynihan said, adding that the number stands around 70,000 for employees outside the US. “Now we’re in the process of inviting those people back to work. We give them 30 days-plus notice.”
Moynihan’s comments came on the same day that Goldman Sachs’ US employees were required to return to the office. In the run up, Goldman required US employees to inform the company of their vaccination status.