Economy

Exclusive-US senators seek salary information from Fed’s inspector general

Published

10 months ago

July 26, 2023

Exclusive-US senators seek salary information from Fed's inspector general

© Reuters. FILE PHOTO: U.S. Senator Elizabeth Warren (D-MA) questions witnesses during a Senate Banking, Housing, and Urban Affairs Committee hearing in the wake of recent bank failures, on Capitol Hill in Washington, U.S., May 18, 2023. REUTERS/Evelyn Hockstein/Fil

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By David Morgan and Costas Pitas

WASHINGTON (Reuters) – Republican Senator Rick Scott and Democrat Elizabeth Warren have asked for salary information from the Fed’s Inspector General, who serves as the central bank’s watchdog, as they criticized the current system amid a push to make the role independent, according to a letter seen by Reuters on Tuesday.

Republicans and Democrats in Congress have pledged tighter oversight of banking regulators following the collapse of Silicon Valley Bank and Signature Bank (OTC:).

The Federal Reserve is responsible for supervising – monitoring, inspecting and examining – certain financial institutions to ensure that they comply with rules and regulations, and that they operate in a safe and sound manner.

Some in Congress are concerned that the Federal Reserve’s current inspector general is not independent enough to serve as a check on the central bank. Unlike the Pentagon and other big agencies, the Fed’s internal IG, currently Mark Bialek, reports directly to the Fed board.

Under the Senators’ plans, the holder of the role would instead be appointed by the President and confirmed by the Senate.

Among their concerns with the current system, the Senators wrote in the letter, is that the IG’s compensation is now structured in such a way to create potential conflicts of interest. Specifically, they objected to having the IG’s salary tied to the compensation of Fed officials who the IG is tasked with investigating.

“…Because the Fed Inspector General’s salary is in part based on the bonuses earned by other Fed employees… there is a structural, financial incentive for the IG to overlook or downplay wrongdoing by those Fed officials,” Warren and Scott wrote in a letter to Bialek dated July 24, citing his previous testimony.

“These types of conflicts are why we have introduced legislation…”

They detailed five questions in their letter, including what salary Bialek had received over the last five full calendar years, what percentage of his salary was based on the average bonus component of the pay formula and whether he had conducted any inspections in connection with bonuses at the Fed in the last five years.

The IG’s office did not immediately respond to a request for comment from Reuters.

Bialek has previously faced criticism from Warren and other lawmakers for his handling of the securities trading scandal that caused two regional Fed bank presidents to step down in the fall of 2021.

At a hearing in May 2023, Warren blasted him for failing yet to produce a report on a matter that tarred the Fed’s reputation when it was reported nearly two years ago.

Bialek defended his agency’s independence and ability to conduct investigations.

“No Board Chair has resisted or objected to our oversight work since I have been the IG,” he said at the time.

Economy

Russian central bank says it needs months to make sure CPI falling before rate cuts -RBC

Published

5 months ago

December 26, 2023

Russian central bank says it needs months to make sure CPI falling before rate cuts -RBC

MOSCOW (Reuters) – Russia’s central bank will need two to three months to make sure that inflation is steadily declining before taking any decision on interest rate cuts, the bank’s governor Elvira Nabiullina told RBC media on Sunday.

The central bank raised its key interest rate by 100 basis points to 16% earlier in December, hiking for the fifth consecutive meeting in response to stubborn inflation, and suggested that its tightening cycle was nearly over.

Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.

“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.

Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.

“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.

The bank will next convene to set its benchmark rate on Feb. 16.

The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.

Economy

China identifies second set of projects in $140 billion spending plan

Published

5 months ago

December 25, 2023

China identifies second set of projects in $140 billion spending plan

© Reuters. FILE PHOTO: Workers walk past an under-construction area with completed office towers in the background, in Shenzhen’s Qianhai new district, Guangdong province, China August 25, 2023. REUTERS/David Kirton/File Photo

SHANGHAI (Reuters) – China’s top planning body said on Saturday it had identified a second batch of public investment projects, including flood control and disaster relief programmes, under a bond issuance and investment plan announced in October to boost the economy.

With the latest tranche, China has now earmarked more than 800 billion yuan of its 1 trillion yuan ($140 billion) in additional government bond issuance in the fourth quarter, as it focuses on fiscal steps to shore up the flagging economy.

The National Development and Reform Commission (NDRC) said in a statement on Saturday it had identified 9,600 projects with planned investment of more than 560 billion yuan.

China’s economy, the world’s second largest, is struggling to regain its footing post-COVID-19 as policymakers grapple with tepid consumer demand, weak exports, falling foreign investment and a deepening real estate crisis.

The 1 trillion yuan in additional bond issuance will widen China’s 2023 budget deficit ratio to around 3.8 percent from 3 percent, the state-run Xinhua news agency has said.

“Construction of the projects will improve China’s flood control system, emergency response mechanism and disaster relief capabilities, and better protect people’s lives and property, so it is very significant,” the NDRC said.

The agency said it will coordinate with other government bodies to make sure that funds are allocated speedily for investment and that high standards of quality are maintained in project construction.

($1 = 7.1315 renminbi)

Economy

Russian central bank says it needs months to make sure CPI falling before rate cuts -RBC

Published

5 months ago

December 25, 2023

Nabiullina said it was not yet clear when exactly the regulator would start cutting rates, however.

“We really need to make sure that inflation is steadily decreasing, that these are not one-off factors that can affect the rate of price growth in a particular month,” she said.

Nabiullina said the bank was taking into account a wide range of indicators but primarily those that “characterize the stability of inflation”.

“This will take two or three months or more – it depends on how much the wide range of indicators that characterize sustainable inflation declines,” she said.

The bank will next convene to set its benchmark rate on Feb. 16.

The governor also said the bank should have started monetary policy tightening earlier than in July, when it embarked on the rate-hiking cycle.