Powell testifies at House Financial Services at 10 a.m. … CFTC Chair Rostin Behnam testifies at Senate Agriculture at 10 a.m. … Senate Budget holds a hearing on the economic costs of wildfires at 10 a.m. … Inspectors general for the Fed, CFPB and SEC testify at House Financial Services at 2 p.m. … HUD senior adviser Richard Cho testifies at a Senate Banking hearing on homelessness at 2:30 p.m. … Exclusive: Gensler brushes off threat that crypto firms will flee U.S. — The EU and other jurisdictions are opening their doors to crypto startups and rolling out tailor-made regulations, but SEC Chair Gary Gensler, who is ramping up enforcement actions against the industry, isn’t worried about the U.S. losing out. “We lose more if investors get harmed here,” he told Sam Sutton, Declan Harty and your MM host Tuesday. “It’s a basic bargain in finance: If you want to raise money from the public, disclose certain facts and figures.” Gensler sounded skeptical about the EU’s new law, known as Markets in Crypto-Assets, or MiCA. “Do you know that MiCA doesn’t even cover Bitcoin?” he said. Powell fly around — The Fed chair's hearing covered much more than interest rates. A few nuggets: — Bank capital: In response to questions from Sen. Tim Scott and other Republicans who have questioned the need for the Fed to raise bank capital requirements, Powell committed that any proposals would be risk-based and tailored to banks' activities. Republicans are making bank capital a top oversight target after Fed Vice Chair for Supervision Michael Barr launched a “holistic review” of capital rules and suggested banks need bigger buffers to absorb losses. But Powell affirmed Barr’s right to conduct the review, which is rattling big banks. “[W]e all agree capital is strong, certainly the vice chair does," Powell said. "The question is, is it at the right level?" — Crypto: Powell said it’s important for the U.S. to have “a workable legal framework around digital activities.” He put the responsibility on lawmakers. "That is important, and something Congress in principle needs to do because we can't really do that," he said. — Fed diversity: Sen. Bob Menendez is getting support in his push to get Latino policymakers appointed at the Fed. Sen. Catherine Cortez Masto said she was aligned with Menendez in “supporting a Latino nominee to the open seat on the Federal Reserve.” Sen. Raphael Warnock said it’s important for the Fed’s governing board to “reflect the diversity of our nation.”
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