McHenry, Barr Demand Answers on Regulators' Dealings with Global Governance Bodies

Letter

"We write to express concern with growing influence of global governance bodies on U.S. bank regulation. Federal banking agencies are sidelining U.S. laws and congressional intent in favor of implementing "standards' and interests of global governance bodies at an alarming pace. Recent examples include the proposed Basel III Endgame, and the recently adopted principles for managing purported climate-related financial risks as formed by Basel groups, the Network for Greening the Financial System, and other global bodies. The climate principles effectively implement a climate-change policy that has been rejected by Congress on numerous occasions. As you know, it is the responsibility of Congress, not unelected bureaucrats, to determine policy, including banking regulations.

Of particular concern to this Committee is the tangled web of interconnected global governance bodies, including the Bank for International Settlements (BIS), Basel Committee on Banking Supervision (BCBS), the Committee on Payments and Market Infrastructures (CPMI), Financial Stability Board (FSB), and, lately, the Network of Central Banks and Supervisors for Greening the Financial System (NGFS). The NGFS, in particular, has evolved into an outgrowth of the Banque de France and is increasingly controlled by climate activists, partisan goals, and opaque funding developed by climate activist organizations. Many of those organizations are directly tied to the Biden administration.

The relationships between and among the global governance bodies and U.S banking regulators are opaque. Those bodies set soft-law "standards,' engage in enforcement actions using peer reviews and name-and-shame tactics with U.S. banking agencies to turn their standards into the hard-law regulatory frameworks governing U.S. financial institutions.

Disturbingly, Congress is uninformed about negotiated "agreements' and "accords' between officials, U.S. federal banking regulators' staff, and the global governance bodies. For example, a recent hearing by the Subcommittee on Financial Institutions and Monetary Policy of the House Financial Services Committee revealed a concerning lack of knowledge by top regulatory officials from the Federal Reserve, FDIC, and OCC about activities, funding, and U.S.

Congress needs to better understand the interplay between federal banking agencies and the tangled web of global governance bodies. This is especially important given the recent BCBS-fueled Basel III Endgame proposal from U.S. federal banking agencies and the recent NGFS-, BIS-, and BCBS-fueled principles for managing purported climate-related financial risks."

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