Regulators are struggling to find a way to protect banks from cryptocurrency risks. In this context, a governor of the FED made statements, which could intrigue more than one, concerning the regulation of cryptos. This is Lisa Cook, who recently joined the Board of Governors of the United States Federal Reserve. Hear the highlights of what the Governor said at an event hosted by the Detroit Economic Club.
Do banks have sufficient protection against crypto?
Fed Governor said that authorities may not need to introduce new crypto regulations. According to her, there would already be the best possible controls to protect banking institutions from the risks associated with cryptos. Lisa Cook believes that recent market events prove that regulators are sufficiently equipped against crypto.
She highlighted the collapse of several crypto businesses without significantly affecting the financial system. According to her, regulators, with their current tools, can avoid overflows issues affecting the crypto and stablecoin markets.
” Because we haven’t seen the crypto crisis lead, so far, to a financial crisis, that means regular banking regulations […] actually resisted“said Lisa Cook. She added: “So sometimes […] maybe we don’t need a whole lot more different kinds of regulation. Maybe we just need to do the work that’s already in our power to do.“.
Lisa Cook argues that inflation is still“far too high”
Lisa Cook suggested that the FED will continue to raise US interest rates, because “inflation remains far too high“. According to the governor, there is reason to be cautious, and therefore to move forward “in small steps“.
However, she recognizes that there is a noticeable slowdown in inflation, compared to its level 40 years ago. During a speech at the Detroit Economic Club, Cook expanded extensively on the issue. “We have started to see some improvement in inflation data“, did she say.
According to Governor Lisa Cook, consumer and producer prices eased in October. Cook adds that inflation in the service sector of the economy could pose a long-term threat. The services in question are: travel, leisure and entertainment.
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