In the latest in SIFMA’s podcast series, SIFMA president and CEO Kenneth E. Bentsen, Jr. and CEO of the Global Financial Markets Association (GFMA) is joined by Allison Parent, Executive Director of GFMA, and Roy Choudhury, Managing Director and Partner at Boston Consulting Group (BCG), to discuss the new report GFMA wrote in collaboration with BCG, “Climate Finance Markets and the Real Economy: Sizing the Global Need and Defining the Market Structure to Mobilize Capital.”

The report is based off interviews conducted this year with more than 100 market participants globally, including financial leaders, non-financial corporates, and asset managers, and outlines the current state of the climate finance market, capital demands to meet policy goals, and recommendations to adapt our market structure to meet that capital demand. …


While the Banking and Capital Markets sector have made significant public commitments toward climate goals, we estimate the current amount of investment generated needs to increase to $3–5 trillion per year; roughly five to eight times the current amount raised. As such, there is a need to scale-up climate finance and for public and private organizations to collaborate to mitigate the impact of climate risks

Emergence of Carbon Pricing

Carbon pricing is going to be an integral component to scaling-up climate finance globally. Carbon pricing reflects the external costs of greenhouse gas emissions, and if not sufficiently priced into markets, it could adversely impact the competitiveness of green projects. Currently, carbon pricing is not suitably adopted in markets, and policy makers will need to develop an internationally aligned price that incentivizes investment in low-carbon technologies. …


Melissa MacGregor, Managing Director and Associate General Counsel at SIFMA, sat down with Larry Bortstein, Founder of Bortstein Legal Group, and Lou Trotta, Senior Counsel at BLG, to talk about the new white paper SIFMA wrote in collaboration with Bortstein Legal Group, Navigating Regulatory Challenges in Cloud Infrastructure Services Agreements.

Transcript

Edited for clarity

[Melissa] Thanks for joining us for this episode in SIFMA’s podcast series. …


With more than 90% of adults in the United States using the internet, nearly 89% filing federal taxes electronically — nearly 77% for individual returns — and most clients of financial firms choosing electronic delivery for investment-related communications, the time has come — and arguably is overdue — to implement electronic delivery as the primary means for delivering investor communications. For this to happen, the Securities and Exchange Commission (SEC) needs to update its rules and related guidance to reflect current reality.

In a newly published discussion paper, SIFMA and SIFMA AMG along with several other financial services trades outline how and why the SEC should amend relevant investor communications rules to permit firms to shift the default delivery method from postal delivery to e-delivery (through email, via a firm’s mobile application or website, or by other means of electronic transmission as may be available today or developed in the future). …


The following is a guest blog from Jilenne Gunther, National Director, AARP BankSafe

SIFMA has teamed up with AARP to distribute BankSafe, a first-of-its-kind online training platform that empowers financial advisors with knowledge, skills and confidence to stop the financial exploitation of older Americans.

Financial exploitation is a problem that hits home for older Americans, their families and the financial industry. One in five older Americans are victims of financial exploitation, with each victim losing more than $120,000, on average. Further, the U.S. financial industry loses roughly $1 billion every year because of exploitation of adults over 50.

AARP found that consumers are looking to their trusted financial advisors for help. So AARP brought together leaders in the financial industry and asked the question, “what can we do together to solve this growing problem?” …


SIFMA President and CEO Kenneth Bentsen argues a New Jersey trade tax proposal would hurt retirement savings for millions of Americans. (Source: FOX Business)

Related Resources

Research: The Ramifications of a Financial Transaction Tax

Financial Transaction Taxes: A Fact Sheet


Key Takeaways

  • In early March, the Federal Reserve and Federal Deposit Insurance Corporation (FDIC) issued proposed resolution planning guidance for firms captured by a new proposed methodology (Specified Foreign Banking Organizations ).
  • The proposed guidance contains new, extraterritorial expectations that are designed to align with resolution planning guidance for the US G-SIBs. However, this ignores the growing divergence in size and risk profile of these two sets of institutions, much of it driven by the super equivalent regulatory requirements that the Foreign Banking Organizations (FBOs) are subject to. …

Key Takeaways

  • The Fed will, for the first time, be conducting a second round of stress tests this year designed to capture potential risks arising from the ongoing COVID-19 crisis.
  • We recommend that the Fed design their macroeconomic scenarios with a focus on those segments of the economy that are currently distressed or likely to be vulnerable to stress, rather than applying blunt, broad based macro scenarios.
  • The Fed should consider tailoring the Global Market Shock and Large Counterparty Default components to focus more specifically on those asset classes that are plausibly vulnerable or potentially vulnerable to the impact of COVID-19 transmission. …

The following is a guest blog post by Michael Tae, head of strategy and M&A at Broadridge.

Nearly 80% of CEOs and their direct reports say that less than half of all innovation projects at their firms succeed. This was one of the key findings of a survey of 100 CEOs and direct reports from Fortune 1000 companies across a diverse range of industries, conducted by Broadridge Financial Solutions, and G100 Network.

The survey found that only 3% reported an innovation project success rate above 75%, with a further 20% achieving a success rate above 50%. This is a startlingly low figure. It suggests that innovation comes with significant costs and risks. The three biggest hurdles senior executives said they faced in terms of innovation in technology transformation were access to qualified talent (55%), legacy systems architecture (54%) and an internal culture of resistance to change (52%). …


The analysis was severe; the Fed should avoid punitive assumptions in the next round of submissions to promote economic recovery

Key Takeaways:

  • The 2020 DFAST contained severe macroeconomic scenario assumptions, even for current conditions.
  • The Fed’s COVID-19 sensitivity analysis (“COVID-19 analysis”) added even more stringent assumptions. Notably, and contrary to much commentary, it was also broader than just adjustments to GDP, unemployment and U.S. Treasury rates.
  • The sensitivity analysis failed to consider any of the benefits of the government’s $6 trillion in fiscal and monetary actions to bolster the resilience of small businesses and consumers.
  • Despite its severity, the sensitivity analysis results demonstrated the fortitude of the banking sector in the face of unprecedented stresses.
  • The Fed should avoid the imposition of additional procyclical shocks on banks as they design the next round of COVID-19 sensitivity analyses, due to be released in September. …

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SIFMA

SIFMA represents hundreds of securities firms, banks and asset managers. We support a strong financial industry that promotes job creation and economic growth.

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