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Delivered daily by 8 a.m., Morning Money examines the latest news in finance politics and policy. | | | | |  | | By Kate Davidson, Sam Sutton and Aubree Eliza Weaver | Editor’s Note: Morning Money is a free version of POLITICO Pro Financial Services morning newsletter, which is delivered to our s each morning at 5:15 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day’s biggest stories. Act on the news with POLITICO Pro. Treasury Secretary Janet Yellen vowed Thursday to help Ukraine secure the economic support the country needs to withstand Russia’s onslaught. On Thursday night, that included a direct appeal for help to some of the top U.S. financial executives, delivered by Yellen’s No. 2. In a private dinner at the Treasury Department, hosted by Deputy Secretary Wally Adeyemo and Ukrainian Finance Minister Serhiy Marchenko, Adeyemo encouraged the business leaders to support Treasury’s efforts to aid Ukraine and bolster its economy, either by restarting existing ventures in the country or pursuing new opportunities, an agency official said. Adeyemo also encouraged the executives to provide resources to support Ukraine’s reconstruction and financial needs. The dinner guests included representatives from Bank of America, Citigroup, Goldman Sachs, Mastercard, the Institute of International Finance and the Business Roundtable.
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Deputy Treasury Secretary Wally Adeyemo, shown during an April 12 interview with the AP, urged financial executives to help support Ukraine. | Andrew Harnik/AP | Adeyemo argued that the shared resolve demonstrated by the government and the business community — including the companies and trade groups represented at the dinner — to come together against the war has been critical in isolating and shrinking Russia’s economy. The public and private sector must show similar solidarity in supporting the rebuilding of Ukraine and its economy, he told the participants, according to the Treasury official. A new round of aid — Yellen said Thursday that the Treasury would provide $500 million in immediate financial assistance to Ukraine to help cover urgent government expenses, including salaries for the military and social safety net payments. She also said the Biden administration plans to go back to Congress for more aid, and a spokesman for House Speaker Nancy Pelosi (D-Calif.) said lawmakers expect to receive the supplemental funding request next week. “We know this is only the beginning of what Ukraine will need to rebuild,” Yellen said at a press conference, the first since the start of her tenure in January 2021. “I’m committed to working with Congress and with our international allies and partners to build on this support in the medium and long term.” Ukrainian officials came to Washington this week seeking a roughly $50 billion aid package to cover expected budget shortfalls over the next six months. While Western sanctions have sent the Russian economy and financial system into a tailspin, the war has also walloped Ukraine’s economy, which officials said shrank an estimated 15 percent in the first quarter. International Monetary Fund Managing Director Kristalina Georgieva said at a Ukraine roundtable on Thursday that the fund estimates that “over the next two to three months some $5 billion a month may be needed simply to allow the government and the economy to continue to operate in the midst of the war.” Thus, she said, “more external financing is necessary — especially concessional funding and fast-disbursing grants.” Adeyemo told the dinner participants that the Treasury will continue to support Ukraine’s needs through the global financial institutions, including the efforts under way at the IMF, World Bank and European Bank for Reconstruction and Development. Limited options — As for how to punish Russia further, Yellen said some sanctions, such as a ban on Russian energy imports by European countries, would be difficult to implement and could harm the world economy, WSJ’s Amara Omeokwe and Andrew Duehren wrote. “We need to be careful when we think about a complete European ban on, say, oil imports,” Yellen said. “That would clearly raise global oil prices, it would have a damaging impact on Europe and other parts of the world, and counterintuitively it could actually have very little negative impact on Russia because although Russia might export less, its price for its exports would go up.”
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Treasury Secretary Janet Yellen speaks during a news conference at the Treasury Department in Washington, Thursday, April 21, 2022. | Susan Walsh/AP Photo | Asked by your MM host about Russia’s central bank foreign reserves, which some people have suggested should be diverted to help Ukraine, Yellen said it’s not clear such a move would be legal — or appropriate. “That is a very significant step,” she said. “And it’s one that we would carefully need to think through the consequences of before undertaking it. I wouldn’t want to do so lightly, and it’s something that I think our coalition and partners would need to feel comfortable with and be supportive of.” IT’S FRIDAY — We made it! Now go enjoy that weekend and let's meet back here Monday. What should we be writing about next week? Let us know: kdavidson@politico.com or @katedavidson, or aweaver@politico.com or @aubreeeweaver.
| | | | DON'T MISS ANYTHING FROM THE 2022 MILKEN INSTITUTE GLOBAL CONFERENCE: POLITICO is excited to partner with the Milken Institute to produce a special edition "Global Insider" newsletter featuring exclusive coverage and insights from the 25th annual Global Conference. This year's event, May 1-4, brings together more than 3,000 of the world’s most influential leaders, including 700+ speakers representing more than 80 countries. "Celebrating the Power of Connection" is this year's theme, setting the stage to connect influencers with the resources to change the world with leading experts and thinkers whose insight and creativity can implement that change. Whether you're attending in person or following along from somewhere else in the world, keep up with this year's conference with POLITICO’s special edition “Global Insider” so you don't miss a beat. Subscribe today. | | | | | | | | European Central Bank President Christine Lagarde speaks at the Peterson Institute for International Economics at 9 a.m. NEVER TWEET — One of the CFTC’s new commissioners turned heads this week aftertweeting about her meeting with FTX founder Sam Bankman-Fried and Mark Wetjen, the agency’s former acting commissioner and the crypto exchange’s head of policy and regulatory strategy. “Yes [Bankman-Fried’s] hair is better than mine and yes [Wetjen] really is that tall. Thanks for coming to talk to me today!#crypto#web3,” Commissioner Caroline Pham wrote in a caption for a picture of her with the two crypto executives. Pham has tweeted aboutat least twoother meetings she has had with industry leaders since being sworn in last week. But her comments regarding her meeting with FTX — which is pushing for CFTC approval on a potentially disruptive plan to clear retail crypto investors’ margin trades on a 24/7 basis — triggered a backlash from watchdogs. “It is shockingly bad judgment for a regulator to pose for pics with execs from a regulated firm, and even worse judgment to tweet it,” wrote Adam Levitin, a law professor at Georgetown University. “Doesn't matter if they're your besties. The optics are horrible.” Pham pushed back in an email to POLITICO: “It’s important for the public to have access to their government. I’m pleased to have met with companies from the ag, energy and digital asset sectors this past week and appreciate their time in flying to DC. The other Commissioners and I met with FTX and I look forward to learning more and thoughtfully considering the issues.” CFPB, NY AG SUE MONEY TRANSFER PROVIDER MONEYGRAM — Our Katy O’Donnell: “The CFPB on Thursday sued the money transfer provider MoneyGram for allegedly violating consumer financial protection laws. The company allegedly stranded customers waiting for their money when it failed to deliver funds promptly to recipients abroad, according to the lawsuit filed in the U.S. District Court for the Southern District of New York. New York Attorney General Letitia James joined the consumer bureau in the suit.” REMEMBER THE PANDEMIC? — This week’s headlines at the IMF and World Bank spring meetings were dominated by Ukraine and Russia. But Yellen, in a new op-ed in Foreign Policy, argues that policymakers cannot miss the window to apply lessons learned from Covid-19 to build resilience against the next pandemic. “There’s a continuing pattern around such crises,” she wrote in the op-ed, co-authored by Dr. Tedros Adhanom, director-general of the World Health Organization, and Sri Mulyani Indrawati, the finance minister of Indonesia, which chairs the G-20. “Countries follow a cycle of panic and neglect with infectious disease outbreaks, ramping up efforts during the crisis and then forgetting about it when the threat subsides. “This makes it all the more urgent to address the profound gaps in global health security architecture exposed by COVID-19 rather than returning to habits of neglect.”
| | | | JOIN US ON 4/29 FOR A WOMEN RULE DISCUSSION ON WOMEN IN TECH : Women, particularly women of color and women from disadvantaged socioeconomic backgrounds, have historically been locked out of the tech world. But this new tech revolution could be an opportunity for women to get in on the ground floor of a new chapter. Join POLITICO for an in-depth panel discussion on the future of women in tech and how to make sure women are both participating in this fast-moving era and have access to all it offers. REGISTER FOR THE CHANCE TO JOIN US IN-PERSON. | | | | | | | | POWELL SIGNALS READINESS FOR FASTER RATE INCREASES — NYT’s Jeanna Smialek and Madeleine Ngo: “Jerome H. Powell, the chair of the Federal Reserve, signaled on Thursday that the central bank was prepared to raise interest rates rapidly starting in May as it tries to cool down the economy and prevent fast inflation from becoming a lasting feature. A larger-than-usual increase of half a percentage point ‘will be on the table for the May meeting,’ Mr. Powell said on Thursday, after explaining that at a moment of high inflation ‘it is appropriate, in my view, to be moving a little more quickly’ to raise borrowing costs in an effort to cool down demand and the broader economy.” Also, the Chicago Fed said President Charles Evans will retire early next year, WSJ’s Nick Timiraos reported. Some trivia from Nick: Evans is the longest-tenured reserve bank president (he took over the Chicago Fed in September 2007). Also: Regional Fed presidents can generally serve until they turn 65 — Evans will celebrate that birthday in January, around the same time as Kansas City Fed President Esther George, who will also be forced to step down then.
| | | DEMS CHIP AT MINES — FromSam Sutton: Almost two dozen House Democrats are asking the Environmental Protection Agency to step up its oversight of crypto mining businesses on the grounds that the energy-intensive industry is having an outsize effect on climate change and other ecological disasters. With the U.S. now the global leader in Bitcoin mining — a process in which high-powered computers process transactions in exchange for newly-minted Bitcoins — a group of lawmakers led by Rep.Jared Huffman (D-Calif.) is pushing for the top environmental regulator to take a more active role in policing emissions, electronic waste and noise pollution that has been linked to the nascent industry. MORE ON ATS RULES – Bill Hughes, a former Trump administration official and Consensys’s senior counsel and director of global regulatory matters, followed up onyesterday’s post about the crypto industry’s veiled legal threats to the SEC over a new proposal that could ensnare DeFi protocols and other crypto software providers: “If the SEC proceeds to finalize this rule without explicitly excluding blockchain systems from the scope of 'communication protocol systems', then the question is more likely to be where someone in the crypto space brings an APA lawsuit rather than if someone brings suit.” CRYPTO LAB – Andreessen Horowitz is launching a crypto research arm that will work with its portfolio companies on “advancing the science and technology of the next generation of the internet,” the venture capital behemoth announced in ablog post on Thursday. OCC HITS CRYPTO BANK OVER MONEY LAUNDERING, COMPLIANCE RULES — Reuters: “The Office of the Comptroller of the Currency on Thursday said flagship crypto bank Anchorage Digital Bank National Association violated rules for monitoring for suspicious activity and preventing money laundering. The Sioux Falls, South Dakota-based firm failed to adopt a compliance program that meets Bank Secrecy Act and anti-money laundering requirements, OCC said in its order. Anchorage Digital receiving a conditional bank charter from the regulator in January 2021.”
| | | Salman Banaei, a former counsel to SEC Chair Gary Gensler during his time as chair of the Commodity Futures Trading Commission, is leaving the blockchain analytics firm Chainalysis to head up global policy at Uniswap Labs. Uniswap develops decentralized finance protocols.
| | | Shareholders in some of the biggest U.S. companies reaped wealth gains in the pandemic that outpaced pay hikes for their employees by more than 50 to 1, according to a study by the Brookings Institution. —Bloomberg’s Katia Dmitrieva About 1.42 million Americans were collecting traditional unemployment benefits in the week of April 9, the fewest since February 21, 1970. — AP’s Matt Ott Global investment banks are pushing ahead with ambitious expansion plans in Shanghai even as a strict lockdown in China’s financial capital forces them to make emergency food deliveries to some staff and leaves others camped out on trading floors. — FT’s Tabby Kinder and Thomas Hale JPMorgan Chase & Co. strategists expect Corporate America to easily trounce Wall Street’s earnings forecasts. —Bloomberg’s Jess Menton | | | | Follow us on Twitter | | | | Follow us | | | | |  |
