BPInsights: April 18, 2026

Crypto: The New Shadow Fleet in U.S.-Iran Conflict

Iran has demanded that ships pay tolls for accessing the Strait of Hormuz in cryptocurrency, according to the Financial Times recently. The waterway has become a flashpoint in the U.S. conflict with the Middle Eastern nation, with the U.S. military this week instituting a blockade of Iranian ports. The U.S. also issued new sanctions this week against individuals and companies connected with an Iranian smuggling network. Crypto, including the use of "mixers" to obfuscate the origins of digital assets, plays a key role in money laundering, illicit financing and sanctions evasion. While the crypto toll demand makes its role in geopolitical conflict more explicit, it has long been a feature of illicit cross-border financing networks and a conduit for terrorist funding.

Five Key Things

1. The Latest on Crypto Market Structure

The expected release of the legislative text of the crypto market structure bill this week was delayed, suggesting continued internal deliberation on key provisions like yield, AML, DeFi regulation and ethics. A key element is intensely negotiated language on stablecoin yield proposed by Sens. Thom Tillis (R-NC) and Angela Alsobrooks (D-MD). Tillis said senators "may have to do crypto-palooza," where he would convene crypto and banking industry representatives on Capitol Hill to gather input on the Senators' language. "And that could take a little bit of time to get people in the room." Officials including Treasury Secretary Scott Bessent, White House crypto czar David Sacks have urged the prompt passage of the CLARITY Act legislation in recent weeks. Now that Congress has returned from recess, the bill may receive a markup, though no markup date has been set by the Committee.

• CEA Report. The White House Council of Economic Advisers last week released a report on the potential effects of a stablecoin yield prohibition. Such a ban would increase bank lending by a modest amount, the paper suggests. However, American Bankers Association economists noted that "[t]he live policy concern is not whether prohibiting yield on payment stablecoins would impact bank lending. It is whether allowing yield on payment stablecoins would encourage deposit flight - especially from community banks - thus raising banks' funding costs and reducing local lending. By focusing on the effects of a prohibition, the CEA paper risks creating a misleading sense of safety by avoiding the much more consequential scenario: yield-paying payment stablecoins scaling quickly." The CEA paper does not consider what would happen to bank deposits as the stablecoin market grows, ABA writes. Separately, economist Andrew Nigrinis echoed those concerns, warning that stronger stablecoin-driven Treasury demand "is not a free lunch" if it displaces community bank deposits and curtails relationship-based lending to small businesses, farmers and rural communities.

2. Bessent: EO on Banks Collecting Citizenship Data 'In Process'

Treasury Secretary Scott Bessent said this week that an executive order requiring banks to collect customers' citizenship information is "in process." It was not immediately clear whether the order would require banks to collect such data from existing customers or just from new customers. At a CNBC summit, Bessent expanded on the rationale for the action: "Why can unknown foreign nationals come and open a bank account?" he said. "Our bank executives' job is to know your customer. How do you know your customer if you don't know if they have legal or illegal status, whether they are a U.S. citizen or green card holder?" Know Your Customer rules require banks to verify customers' identity, but U.S. banks do not have a specific obligation to verify U.S. citizenship. Bessent told CNBC's Sara Eisen, "Every other country does it. Every other country. … There should be stricter rules."

3. Bowman on Basel: Need Time for Transition

At an Institute for International Finance event this week, Federal Reserve Vice Chair for Supervision Michelle Bowman expressed hope that "we've struck the right balance" on the recently released Basel proposal. She acknowledged that feedback may vary on the proposal, and described the measure as "very middle of the road," noting that six of seven Fed governors supported it. Bowman said the proposal will likely be finalized by the end of the year, but noted that "There will need to be some time for transition from the current framework into whatever the next framework will look like." Bowman also said that forthcoming changes to the stress tests are expected to be completed in late summer or early fall.

4. Does Bank Supervision Have a Culture Problem?

In recent years, bank examiners have focused supervision not just on banks' balance sheets, but on intangible factors like organizational culture. But supervisory culture also needs a thorough re-examination, according to a new report drawing on former policymaker and industry comments. The report - "Supervisors on Supervision" - calls for greater coherence, less international fragmentation and a common language in bank supervision. The April 2026 version of the report is the culmination of a series of papers, beginning with a stock-take analysis released in late 2025.

• Why These Questions Matter. Supervisory culture affects supervisory outcomes, and "rule-writing and capital provisions cannot compensate for governance and incentive failures, broken feedback loops, or myopic vision." The report flags the 2023 banking turmoil as a cautionary example of supervisory culture issues. "Supervisory culture - its assumptions, incentives, confidence, and willingness to act - was repeatedly implicated in failures of oversight," wrote study chair and former Fed supervision chief Randal Quarles and series lead Stephen Scott.
• Looking Inward. Supervisors must be willing to examine their own culture as a matter of good governance, the report argues.
• Comment Takeaways. The final version of the report compiles takeaways from industry comments on the initial stocktake. Industry responses called for "sharper definitions, better evidence, more disciplined discretion, stronger challenge rights, a considered embrace of innovation, and sustained cross-border coordination."
• Moving Forward: To overcome tensions in the supervisory culture debate, there are several necessary components, including a common grammar to discuss supervision culture.
• Learn More: To download the full report, click here.

5. OCC Eyeing Preemption Actions on Illinois Interchange Law

The OCC plans to issue regulatory actions asserting federal preemption over Illinois' state law banning interchange fees on sales tax and tips, according to an OMB notice this week. The move would enshrine the OCC's existing stance on preemption into formal policy, echoing determinations that the OCC issued in late 2025 on preemption of state laws on mortgage escrow interest rate caps. The Illinois law is at the center of ongoing litigation between the banking and retail industries. A U.S. district judge determined in February that Illinois is within its right to regulate the fees, partially rejecting a portion of the law that prohibited banks from sharing certain data; the case is now pending appeal. Limits on interchange have come under legal scrutiny elsewhere in recent years, such as in the Corner Post case, in which a North Dakota truck stop challenged the Federal Reserve's 2011 rules governing debit interchange fees.

Clarification: The last edition of BPInsights stated that the Federal Reserve's balance sheet currently and before the global financial crisis are 84 and 24 percent of nominal GDP, respectively. Those percentages are for nominal GDP over a quarter. At an annual rate, the percentages are 21 and 6 percent.

In Case You Missed It

The Crypto Ledger

Here's the latest in crypto.

• Coinbase Charter Approved. The OCC earlier in April conditionally approved a national trust company charter for Coinbase, "despite significant concerns about whether the bank's proposed activities are consistent with law," BPI said in an X post. "National trust company activities are meant to be limited because these institutions are subject to substantially less regulation than full-service banks. For example, national trust bank parent companies are not subject to federal banking agency supervision and may engage in any commercial activities, which undermines the longstanding principle that banking and commerce should be separate. We will closely review the approval to determine if the OCC followed the law."
• Crypto Scams and the Tools to Launch Them: Just an App Download Away. Xinbi Guarantee, a Chinese-language marketplace offering money laundering services for crypto scammers and tools for human trafficking, has remained available on messaging app Telegram despite flags to the platform from crypto crime investigators and investigative journalists. "Despite WIRED and crypto crime researchers repeatedly pointing out that blatantly criminal activity to Telegram, the company has since allowed Xinbi Guarantee to grow into the biggest black market on the internet, one that's facilitated a staggering $21 billion in total transactions," WIRED reported this week. Meanwhile, a clone mimicking the Ledger Live app crypto wallet app "slipped onto Apple's App Store, draining millions from dozens of victims across multiple blockchains in a weeklong phishing campaign," according to CoinDesk.
• Kraken Files for IPO. Crypto exchange Kraken, which recently received a limited Federal Reserve master account, has filed for a U.S. initial public offering, according to CNBC.
• Fed Nominee Warsh Discloses Crypto Holdings. In a financial disclosure required for the confirmation process, Fed chair nominee Kevin Warsh disclosed holdings that include investments in at least 20 crypto-linked entities. Those include decentralized derivatives trading exchange dYdX, decentralized exchange protocol Lighter, venture capital firm Polychain, NFT-focused company Dapper Labs, as well as Solana and Optimism. Warsh also has investments in lesser-known crypto-related startups like Eulith, Lemon Cash, OnJuno, and Ridian, according to the ethics report.
• Binance Compliance Officials Head for the Exits. Crypto exchange Binance, which pleaded guilty to U.S. sanctions and AML violations in recent years, has experienced an exodus of senior compliance staff, according to Bloomberg. Chief Compliance Officer Noah Perlman is seeking to exit the firm and has begun discussions with management about leaving. This follows the departure of other senior compliance staff, including Peter Van Logtenstein, Inga Petrauskaitė, Erin Fracolli, Jarek Jakubcek, and Alex Côté. Binance recently came under scrutiny over transactions on its network linked to Iranian evasion of U.S. sanctions.
• Circle Failed to Freeze Funds Drained in Hack, Suit Says. Circle faces a proposed class action lawsuit from a Missouri customer who accused the stablecoin issuer of failing to intervene and freeze assets as hackers drained an estimated $280 million in digital assets from crypto project Drift Protocol.
• Who is Satoshi? New York Times reporter John Carreyrou's quest to unmask Satoshi Nakamoto, the pseudonymous creator of Bitcoin, led him to computer scientist Adam Back.

The Fed's Market Shock Methodology: Largely Coherent, But Containing One Fatal (But Correctible) Flaw

The Federal Reserve has released extensive details of its Global Market Shock, a component of the annual bank stress tests that helps determine capital requirements for banks with significant trading activity. While the overall modeling framework is sound and coherent, one step in the methodology has a fatal but correctible flaw: the selection process for the primary risk factor shocks, which essentially determines the entire GMS, is subject to no objective or analytically-based constraints and no meaningful regulatory constraints.

What is the GMS? The GMS is a trading book risk stress test in which financial quantities, such as equity prices or credit spreads, suddenly and violently move and markets become totally illiquid; thus, banks cannot trade or hedge their portfolios as asset prices violently move against them. The losses that a bank computes from running the GMS are incorporated into its annual capital requirement.

Why It Matters: A small number of shocks to five key financial markets are fed into the overall GMS model, which then produces the large number of shocks to all remaining risk factors. However, there is no empirical method or theory to guide selection of the primary risk factor shocks, and small changes in assumptions on primary shocks can generate bigger changes elsewhere in the GMS.

What This Note Shows: A new BPI research note demonstrates how the GMS methodology works, implementing it for a credit example to show how arbitrarily small changes in the selection of the primary variable shocks can produce large changes in the GMS credit spread shocks. The note discusses how the GMS methodology could be improved to ensure greater objectivity and robustness.

Recommendations: The Fed should publish its reasoning around the selection of the primary shocks, including the scenario narrative, before each stress test exercise and explain how its choices are related to the narrative, subject to public comment. Guardrails around GMS severity are particularly important as the banking agencies consider the combined picture of the GMS and the Basel market risk capital requirement to eliminate overcapitalization across the framework.

Bottom Line: The Fed needs to improve the justification, transparency and governance of the small number of choices the Fed makes that essentially determine the severity of the GMS.

AML Updates, FCC Action: Recent BPI Updates

BPI released several statements over the preceding weeks. Here's a quick roundup.

• The Risks of Fintech Fed Accounts. BPI's Paige Pidano Paridon published an Open Banker op-ed explaining the risks of fintechs accessing the Fed's payment rails directly through master accounts. Read it here.
• AML Changes. BPI commented on the Treasury Department's proposed updates to Bank Secrecy Act rules. "Importantly, the proposal supports a forward-looking approach that supports responsible innovation, strengthening the detection and disruption of money laundering and terrorist financing activity in today's evolving financial landscape."
• FCC Know Your Customer. The FCC proposed a new rule aimed at preventing criminals from exploiting U.S. telecom networks. BPI expressed support in a statement. In related news, the FCC recently fined a Florida telecom provider $4.5 million for allegedly facilitating bank impersonation scam calls.

Traversing the Pond

Here's the latest in international banking policy. Global financial policymakers converged on Washington this week for the IMF-World Bank spring meetings.

• Topline Concerns. War in Iran and risks from artificial intelligence models emerged as IMF concerns in discussions about financial stability risks. This week, media reports noted that European Central Bank regulators will query banks about cyber risks related to Anthropic's Mythos AI model, following similar inquiries in the U.S. and UK.
• Incoming PRA Chief: No Plan for Further Ringfencing Reforms. Katharine Braddick, the incoming head of Britain's Prudential Regulation Authority, indicated she doesn't envision any further reforms to the ring-fencing system beyond the review of the framework currently underway by the UK government. "I've observed that the government has established it continues to want a ⁠ring fence, and that it wants that ring fence to be optimised for efficiency," Braddick told lawmakers this week. "That seems to me to be what the PRA is doing, so I don't have anything to add ​to ​that. It seems to me that the matter is ​settled." She suggested lessons could be learned from the ECB's recently announced review of its approach to bank supervision. Braddick will assume the role on July 1.
• ECB Backs Plan to Consolidate Crypto Supervision Under EU Markets Regulator. The ECB has expressed support for a European Commission plan to shift supervision of crypto service providers from national regulators to ESMA, the bloc's markets regulator. The central bank indicated this would improve consistency in crypto oversight across the EU. The proposal now heads into negotiations between EU governments and the European Parliament.
• Fraud Accountability in Focus in Canada. The Canadian government recently launched a 45-question consultation on its National Anti-Fraud Strategy. The consultation seeks feedback on three initial measures for the strategy: Supporting law enforcement's ability to combat fraud, strengthening public awareness and establishing a comprehensive Multi-Sector Anti-Fraud Framework. The framework would introduce new and enhanced obligations for federally regulated financial institutions, telecommunications service providers, and digital platforms. Organizations could be required to take fraud prevention measures specific to their industry. On liability, the framework states: "In the event an organization's investigation of a complaint determines that it did not fulfill its Framework obligations, and that an individual suffered financial harm as a result, organizations could be required to make the individual whole, either solely by a single organization or, in the case where multiple organizations have not met their obligations, the individual could be made whole through an arrangement between organizations that apportions blame proportionate to the fault of the implicated organizations (for example, a text from a known fraudster leads to an individual making an electronic funds transfer payment to the fraudster)."

What to Watch Next Week

• The Senate Banking Committee holds a nomination hearing for Fed chair nominee Kevin Warsh on Tuesday.
• Comments are due Monday on the OCC's revised supervisory appeals framework.
• House Financial Services Subcommittee on National Security, Illicit Finance and International Financial Institutions holds a hearing Wednesday on the effectiveness of U.S. sanctions programs.

Member News

Synchrony Recognized as #1 Best Company to Work For in the U.S.

Synchrony has been named the No. 1 Best Company to Work For in the United States for 2026 by Great Place To Work and Fortune. This ranking, based on employee feedback, is a significant climb from its No. 37 ranking in 2021. This recognition highlights Synchrony's high-trust culture as a primary driver for both business performance and technological adoption.

BNY Launches Homeowner Program Including Down Payment Assistance for Eligible U.S. Employees

BNY recently announced the launch of a new homeowner program for U.S.-based employees to help them navigate the journey to homeownership and address affordability pressures. The program combines education, access to mortgage benefits and BNY-funded down payment assistance. Eligible U.S. employees with qualifying compensation of $100,000 or less annually may qualify for $6,500 in down payment assistance to be used toward the purchase of their first home. All U.S. employees will have access to on-demand digital education and live seminars, as well as additional special mortgage benefits.

BPI Job Bank

• Summer Intern, Communications

Upcoming Events

• 4/21/2026: Senate Banking Committee Hearing on the Nomination of Kevin Warsh to be a Member and Chairman of the Board of Governors of the Federal Reserve System
• 4/21/2026: House Homeland Security Subcommittee on Border Security and Enforcement and the Subcommittee on Cybersecurity and Infrastructure Protection: "Online Scams, Crypto Fraud, and Digital Extortion: An Examination of How Transnational Criminal Networks Target Americans"
• 4/21/2026: Brookings Institution event with Fed Governor Christopher Waller on "Transforming the Fed's operations for the 21st century"
• 4/22/2026: House Financial Services Subcommittee on National Security, Illicit Finance and International Financial Institutions hearing on Effectiveness of U.S. Sanctions Programs
• 4/22/2026: House Financial Services Subcommittee on Housing and Insurance hearing on Reinsurance and Credit Risk Transfers
• 4/28/2026: House Financial Services Committee hearing: "Evaluating the Impact of Capital Proposals on Economic Growth and American Communities"
• 4/29/2026: House Financial Services Task Force on Monetary Policy, Treasury Market Resilience and Economic Prosperity hearing on Derivatives and the Treasury Market

Clarification: This edition of BPInsights stated that the Federal Reserve's balance sheet currently and before the global financial crisis are 84 and 24 percent of nominal GDP, respectively. Those percentages are for nominal GDP over a quarter. At an annual rate, the percentages are 21 and 6 percent.

How to Shrink the Fed's Balance Sheet Without Blowing Up Markets

On Thursday, Federal Reserve Board Governor Stephen Miran gave a speech at the Economics Club of Miami on "Prospects for Shrinking the Fed's Balance Sheet." The Federal Reserve's balance sheet is currently 21 percent of nominal GDP; before the Global Financial Crisis it was 6 percent. Miran indicated that the Fed's balance sheet could be reduced gradually by $1 to $2 trillion without disrupting financial markets. 

Miran gave four reasons why the Fed should shrink its balance sheet.

• Minimizing the footprint of the Fed in markets to limit government-induced distortions.
• Lowering the probability that the Fed would make losses.
• Protecting the boundaries between monetary and fiscal policy.
• Preserving dry powder in case the Fed once again hits the zero lower bound on interest rates.

The speech provided an overview of a simultaneously released Fed working paper that he coauthored with three Fed economists, "A User's Guide to Reducing the Federal Reserve's Balance Sheet." In the speech and accompanying paper, he outlined six steps the Fed could take to facilitate a reduction.

• Reforming regulatory liquidity requirements including by making liquidity buffers more usable and recognizing the liquidity inherent in discount window access.
• Destigmatizing the three sources of Fed credit: standing repo operations, the discount window, and daylight credit.
• Engaging in more active open market operations, particularly around quarter-ends and fiscally significant dates;
• Making it easier for dealers to absorb securities as the Fed reduces its holdings including by reforming leverage ratio and GSIB capital requirements.
• Making alternatives to reserves, like Treasury securities, more liquid and attractive, especially for foreign banking organizations and foreign international institutions.
• Making it more expensive for banks to hold reserves by conducting policy with a slightly higher federal funds rate relative to the interest rate on reserve balances.

Governor Miran foreshadowed some of his analysis in a speech at the Bank Policy Institute in November, "Regulatory Dominance of the Federal Reserve's Balance Sheet." BPI's Chief Economist, Bill Nelson, provided similar prescriptions in recent testimony before Congress.

Just a few hours earlier, Stanford professor Darrell Duffie presented a paper at the Brookings Institution on ways the Fed could reduce the size of its balance sheet. In an interview with Brookings, Duffie stated that the Fed may wish to reduce its balance sheet so that it did not "smother the financial system," but that, if it did, it should shrink in a way that did not "blow up money markets."

Duffie's paper describes four actions the Fed could take to reduce the size of its balance sheet, some of which line up with steps suggested by Miran, although with a greater focus on the role of the payment system and banks' reluctance to incur daylight overdrafts. 

• The Fed could revise its liquidity regulations so that banks feel less pressured to conserve their reserve balances.
• Add liquidity savings mechanisms to Fedwire, the Fed's large-value payment system.
• Tier interest rates on reserves, paying a lower interest rate on reserve balances beyond a specified target or quota.
• Smooth the path of reserves by offsetting unintended shocks to the supply of reserve balances, such as those that occur at the end of each quarter.

These proposals come as Federal Reserve Chair nominee Kevin Warsh approaches the confirmation process. "People familiar with Warsh's thinking said he supports a measured approach for reducing the size of the balance sheet without causing ructions in financial markets," the Financial Times reported this week.

Five Key Things

1. An End in Sight on Crypto Market Structure? That Depends on the Details.

Sens. Thom Tillis (R-NC) and Angela Alsobrooks (D-MD) struck an "agreement in principle" with the White House on provisions in crypto market structure legislation concerning the ability of stablecoins to pay yield. While the text isn't public or finalized, the Senators have been in discussion this week with representatives from both the banking and crypto industries about the contours of the language. The details will help determine whether the Senate Banking Committee can move forward with a markup in April, along with work on a few other unresolved issues besides yield. Coinbase has expressed opposition to the latest legislative language, Punchbowl News reported.

• Next Steps. Tillis suggested he may release the text of the agreement once lawmakers have finished meeting with stakeholders.
• Yield. The agreement between Tillis, Alsobrooks and the White House would prohibit crypto firms from paying "any form of interest or yield to restricted recipients a) solely in connection to holding a payment stablecoin or b) in a manner that is economically or functionally equivalent to an interest-bearing bank," according to a summary described by POLITICO.

2. FSOC Proposes New Guidance on Nonbank Financial Company Designations

The Financial Stability Oversight Council this week proposed updated guidance on the designation of nonbanks as systemically important financial institutions. The FSOC was established by the Dodd-Frank Act after the Global Financial Crisis to help address potential risks to the stability of the U.S. financial system, including by designating systemically important nonbank financial institutions to be subject to Federal Reserve supervision and prudential standards. The updates, which would reinstitute several elements from FSOC's 2019 interpretive guidance, aim to return FSOC's approach to one that assesses the risk of certain activities across markets, rather than singling out individual firms. The guidance would:

• Incorporate "economic growth and economic security" into FSOC's analysis of financial stability risks.
• Prioritize identifying, assessing, and addressing risks through an activities-based approach.  "Under the proposal, the Council would pursue entity-specific designations only if a potential risk or threat cannot be, or is not, adequately addressed through an activities-based approach," the guidance said.
• Enhance analytical rigor by committing to performing a cost-benefit analysis before a designation decision
• Provide a pre-designation "off-ramp" and promote greater transparency. 

3. Meta Liable for Failing to Protect Children

A court in New Mexico found that Meta - which runs Facebook, WhatsApp and Instagram - was liable for failing to protect children from sexually explicit content, human trafficking and other dangers on its platform. The jury found Meta liable for misleading consumers about the safety of its platforms and endangering children, under the state's consumer protection laws, and ordered a maximum penalty for each violation, totaling $375 million in civil penalties. While that penalty is minimal for such a large company, the case - the result of a New Mexico state attorney general lawsuit against Meta - marks an important precedent in holding social media companies liable for harm on their platforms. Similarly this week, a Los Angeles jury found Meta and Google liable for a 20-year-old woman's mental health problems stemming from her longstanding addiction to social media.

4. Joint Economic Committee Examines Fraud and Scams

The Joint Economic Committee this week held a hearing examining fraud and scams. The hearing, titled "The Rising Global Scam Economy: Modernizing Federal Approaches to Protect Americans from Foreign Fraudsters," featured two panels of witnesses from the FBI, Justice Department, Scam Center Strike Force, Federal Trade Commission and other organizations. Here are some highlights.

• From 'pay and chase' to prevention first: The U.S. is focusing on reactive responses to fraud rather than stopping scams at their source, witnesses explained. They largely agreed that prevention should move upstream. Rep. David Schweikert (R-AZ), Chairman of the Joint Economic Committee, said: "How do we stop so it's no longer this sort of 'pay and chase' model, but a 'never leaves the account' model?" FBI official Gregory Heeb said of social media and other firms: "They have to improve the ability of their own platforms to prevent the fraudsters from reaching the victims in the first place." Scam Center Strike Force Director Karen Siefert said of telecom "likely scam" alerts: "That's a start, but the next step is to not even allow that phone call to come through." Law enforcement authorities cannot prosecute or arrest their way out of the scam crisis without active prevention from the private sector, witnesses emphasized.
• Challenging threat environment: They discussed the various challenges at hand, such as the global scale of criminal scam-farm enterprises, ability of AI to amplify scam effectiveness and reach and the sophisticated manipulative techniques that scammers use. "We've had former FBI directors that have fallen victim to schemes like this," Heeb said.
• Fragmented response: The federal response to fraud has been fragmented, confusing and insufficiently centralized, witnesses and lawmakers said. What is required is a cohesive national strategy. Ranking Member Sen. Maggie Hassan (D-NH) described a reporting landscape where victims are sent to various agencies, don't know where to report or what happens after and are turned away. One witness noted that victims report more to banks than to federal portals, which aren't designed for modern bulk reporting. One problem: the federal government lacks a common definition of "scam" and a systematic, government-wide assessment of risks and losses.
• Upstream accountability for social media, telecom: Witnesses called for reforms to require accountability for private sector platforms, including social media and telecom. Witnesses said voluntary efforts from firms are not enough. Rep. Sean Casten (D-IL) expressed frustrations with Meta: "More than 10% of Meta's revenue in 2024 was from these fraudulent ads. They're doing nothing to shut it down. And, you know, there have been bipartisan calls for the FTC to step in and hold Meta accountable; has the FTC initiated any of these investigations to date?" FTC official Lois Greisman said: "I hope you'll understand I can't speak to whether way may or may not be doing anything vis a vis any particular company … to your point of social media as an initial point of contact for scammers - yes, that's what our data show."

5. Top U.S. Prosecutor Acknowledges Lack of Evidence of Wrongdoing in Powell Investigation

G.A. Massucco-LaTaif, a top deputy to U.S. Attorney Jeanine Pirro, acknowledged earlier this month in a closed-door hearing that the Justice Department has no evidence of wrongdoing in its criminal investigation of the Federal Reserve, according to the Washington Post this week. Massucco-LaTaif, chief of the criminal division of the U.S. attorney's office in D.C., said at a March 3 hearing that Justice Department lawyers "do not know at this time" what evidence there is of fraud or criminal misconduct, arguing only that the Fed's renovation project was $1.2 billion over budget and that "it doesn't seem right." "There are 1.2 billion reasons for us to look into it," Massucco-LaTaif told a federal judge. The investigation into Powell has been an obstacle in moving Fed nominations through the Senate, as Sen. Thom Tillis (R-NC) has said he will not move forward with Fed nominations until the probe is resolved.

In Case You Missed It

Traversing the Pond

Here's what's new in international banking policy.

• EU Seeks FRTB Delayed Impact Deal by Mid-June. The EU is seeking to reach an agreement by the first half of June on how to neutralize the impact of the Fundamental Review of the Trading Book - the market risk component of the Basel capital framework, according to Bloomberg. The European Commission plans to consider proposals on changes to the FRTB rules, such as a "bank-based multiplier" to blunt the impact of the market risk requirements on EU banks for three years. The move comes amid concerns about competitive disadvantages for EU banks as the U.S. moves to implement a revised Basel framework. The EC planned to present 13 proposals on potential FRTB rule changes at a meeting scheduled for Wednesday, according to Bloomberg.
• Bessent Suggests BoE Model for Treasury-Fed Ties. U.S. Treasury Secretary Scott Bessent expressed support for the U.S. adopting some elements of the Bank of England's model, such as its closer ties with the government compared with the Federal Reserve and its style of intervention during market stress. "Across the pond, it is admirable how the Bank of England conducts large-scale asset purchases during financial crises and other times of systemic stress, and how they stop their interventions after smooth market functioning has been restored," Bessent told the FT.
• ECB Eyes Private Credit Exposure in Bank Supervision. The ECB will seek details of banks' exposure to private credit amid concerns about loan quality in that sector, according to Bloomberg this week. The planned oversight builds on similar work in 2024 and 2025, but euro area regulatory officials say recent vulnerabilities in private credit have underlined its importance. 
• PRA Fines Bank of London. The Prudential Regulation Authority fined the Bank of London and Oplyse Holdings Limited 2 million pounds for misleading the regulator over their capital positions, "failing to act with integrity, failing to be open and cooperative with the regulator and failing to maintain adequate financial resources," according to a press release this week. The action marks the first time that the PRA has fined a firm for failing to conduct its business with integrity and the first time it has taken enforcement action against the parent financial holding company of a firm.
• BCBS Releases Monitoring Report. The Basel Committee on Banking Supervision this week released its semiannual monitoring report for risk-based capital ratios, the leverage ratio and liquidity metrics, using data collected by national supervisory authorities on a representative sample of institutions in each country. Banks' liquidity ratios increased slightly while Basel III risk-based capital and leverage ratios remained stable in the first half of 2025. Basel III liquidity coverage ratios and net stable funding ratios increased while capital and leverage ratios remained stable for large internationally active banks in the first half of 2025. The report, based on data as of the end of June 2025, sets out trends in current bank capital and liquidity ratios and the impact of the fully phased-in Basel III framework.

The Crypto Ledger

Here's the latest in crypto.

• The Trail from Binance to Iran. The New York Times this week reported on the "trail of clues leading to Iran that Binance missed." The crypto exchange failed to sever ties with Blessed Trust, a "little-known payment processing firm that handled back-office tasks for Binance while using the exchange to move $1.2 billion that ultimately went to entities tied to Iran," until a year after red flags about the firm emerged in public records, according to the Times.
• Warren Warns YouTuber on Crypto Ads for Children. Senate Banking Committee Ranking Member Elizabeth Warren (D-MA) expressed concern in a Monday letter to Jimmy Donaldson, a YouTube influencer known as MrBeast, about his plans to offer financial and crypto trading services to minors. Warren flagged Donaldson's recent purchase of financial app Step, which previously allowed minors to trade crypto, and noted that Donaldson's company has expressed interest in engaging in DeFi.
• UK Bans Crypto Political Donations. The UK government under Prime Minister Keir Starmer has prohibited political donations via cryptocurrency, in an effort to prevent foreign interference in UK politics.

BPI Hires Sam Fabens to Lead Communications Team

BPI this week announced the hiring of Sam Fabens as Head of Communications. Sam will start the position on April 20.

"We are excited to welcome Sam to BPI," said Chief Public Affairs Officer Kate Childress. "With nearly two decades of experience in D.C., he brings insights and perspective to our team that will further strengthen our advocacy for our member banks."

"BPI advocates on complex regulatory and economic issues, and our effectiveness depends on being clearly understood by policymakers, media and the public," said BPI CEO Greg Baer. "Sam brings the expertise to elevate our voice and broaden the reach of our policy work."

Sam joins BPI after 17 years at public affairs agency VOX Global, where he most recently served as a partner and led the firm's financial services practice. At VOX, Sam worked with clients across a range of industries, including financial services, technology and telecommunications, to develop and execute communications campaigns that drive public policy. Sam has a Bachelor of Arts degree from Colby College in Economics and International Studies.

Member News

BMO Introduces Tokenized Cash and Deposit Platform

BMO this week unveiled plans for a new tokenized cash and deposit platform in collaboration with Google Cloud and CME Group. The platform will introduce new 24/7 tokenized cash capabilities that will allow institutional clients to move value more easily and securely using CME Group's permissioned network on Google Cloud Universal Ledger (GCUL).

BPI Job Bank

• AVP, Graphic Designer

Upcoming Events

• 3/31/2026: Federalist Society for Law and Public Policy Studies discussion on "The GENIUS (Guiding and Establishing National Innovation for U.S. Stablecoins) Act in Practice: Key Questions for Stablecoin Regulation"
• 4/1/2026:  American Enterprise Institute for Public Policy Research Discussion on "Monetary Policy, Economic Risks and the Outlook for the U.S. Economy"
• 4/13/2026-4/18/2026: IMF/World Bank Spring Meetings

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