Allowing regulators to designate an institution as creating systemic risk in the absence of explicit statutory authority creates a significant risk of politicization. Might regulators in the future designate an activity as risky because it is in political disfavor? Further, the recent track record of regulators to spot emergent risks does not suggest competence in doing so. They clearly underestimated the dangers of inflation and then were caught flat-footed by the bank failures. If the…

Open banking represents the end of bank runs that create long, picturesque lines of frantic depositors standing outside bank doors. In the new world, it will be slow thumbs who lose out.

In contrast to securities regulators, banking regulators have generally been adverse to making public the problems that an individual bank was having, so as to prevent bank runs. But if the bank regulators expect depositors to bear the losses resulting from bank failures, it will be hard to keep a…

The Federal Government appears to be on a path toward the issuance of a dollar CBDC, including by attempting to clear away potential competitors, such as stablecoins, through enforcement actions. The FRB says that it will not go forward with a CBDC without clear approval from Congress, but does not say whether such clear approval would be in the form of a law. How else would Congress give such approval? In light of the policy implications of a dollar CBDC noted in the CRS report, the…

This incident is relevant not only to the CFPB, but to other financial regulators as well. Centralization of financial information on the CAT system, for example, may be a risk not worth taking. (See, e.g., .)