Regulation

Regulators Eye Google, China’s Interest Rates, Crypto Risk Framework Looms?

In the regulatory realm (for Google, at least), call it a case of adding insult to inquiry. A bit of pun there, but the Federal Trade Commission (FTC) — in the wake of the $5 billion fine via the European Union (EU), centered on the Android operating system and antitrust violations — is looking at the matter, too.

As noted late last week, FTC Chairman Joseph Simons said to U.S. lawmakers that he had spoken to European Commissioner for Competition Margrethe Vestager about the penalty, and stated that “we’re going to read what the EU put out very closely.” He noted, too, that scrutiny would be directed at both Google and Apple, and their respective weights in the smartphone industry.

As has been widely reported, the fine comes after a ruling that the tech juggernaut abused its dominance via Android, which is found on more than 80 percent of the world’s smartphones. The company had used, and still uses, various methods through which it promotes its own search engines and mobile applications. Google argued that its tactics — such as not charging for the OS installation on those devices — actually helps competition, and an end result is lower prices for the end consumer.

China’s Lending Rates In Crosshairs

The headlines are dominated by trade wars — with the United States and China, of course, as the focus.

Economics, of course, is an internal event, as well as an external one, that crosses borders via trade. In China, regulators want to boost small business lending. Earlier this month, those same lenders prodded banks to cut rates significantly for small businesses beginning in the current quarter.

The move, Reuters noted, is one that seeks to offset some of the impact of the aforementioned trade war, which could include a slowdown of overall economic growth. Smaller businesses on both sides could see a disproportionate impact, and China Banking and Insurance Regulatory Commission (CBIRC) has taken on the initiative through a non-public notice. The rates are also non-public, but monetary policy reports have pegged the rate at just under 6 percent in the first quarter of this year. Lending to smaller firms stood at one-third of lending balances as of last year.

Cryptos Get Some Examination, Again

Cryptocurrencies get some mention within regulatory discussions, too, of course. To that end, regulators are eyeing the creation of a framework that will focus on risk tied to cryptocurrencies. As noted by Reuters, the Financial Stability Board (FSB) has issued a report that cites a ripple effect of sorts that could spread beyond cryptocurrencies.

“Monitoring the size and growth of crypto-asset markets is critical to understanding the potential size of wealth effects, should valuations fall,” the FSB said. “The use of leverage, and financial institution exposures to crypto-asset markets, are important metrics of transmission of crypto-asset risks to the broader financial system.”

That statement comes after last month’s ruling from the authority within the U.S. Securities and Exchange Commission (SEC) that states cryptos are indeed securities. Since they are securities, the cryptos would be bound to the SEC’s oversight and other securities laws.

CFPB Pick Faces Scrutiny On The Hill

A bit closer to home, the Consumer Financial Protection Bureau’s (CFPB) reshaping continues via the Trump Administration. The nominee to lead the bureau, Kathy Kraninger, faced questioning from a panel of Democratic Senators. The panel touched on a host of issues, but focused on Kraninger’s experience that would be relevant to leading the CFPB.

Kraninger, according to news outlets, including Reuters, seems on track to be confirmed as early as this month. As the newswire quoted Isaac Boltansky, director of policy research at the Washington D.C. firm Compass Point Research & Trading, “We believe the odds of Ms. Kraninger securing confirmation have increased, given her avoidance of a debilitating gaffe, but her confirmation is not yet certain.”

One point of contention dovetailed with questioning that tied into immigration policy. Kraninger stated that she had no role in shaping that policy, which, as has been widely reported, separated thousands of children from their parents. She did, however, state that she had attended meetings on implementing that mandate, which in turn led Senator Elizabeth Warren to claim Kraninger had a “moral stain” on her character.

Beyond that, they charged that the nominee does not have experience to lead the bureau. Supporters state that her time with the White House Office of Management and Budget (where she worked with now acting CFPB head Mick Mulvaney) does indeed qualify her for the role.

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