Chapter 1: What is the main topic discussed in this episode?
Good morning from the Financial Times. Today is Thursday, May 14th, and this is your FT News Briefing. The Federal Reserve is set to have a new chair at last, and Germany's far-right party is now leading in opinion polls. Plus, the Bank of England wants to roll out the welcome mat to stablecoins.
There's a real feeling that the U.S. has stolen a march in this industry, and there's a real danger that we could be left behind.
I'm Sonia Hudson, and here's the news you need to start your day. The U.S. Senate confirmed Kevin Warsh as the next federal reserve chair yesterday. It was a turbulent journey, but lawmakers ultimately voted 54 to 45 in favor of his appointment.
Chapter 2: What are the latest developments regarding the Federal Reserve's new chair?
Warsh is no stranger to the Fed. He served as a governor in the mid 2000s. U.S. President Donald Trump is expected to sign off on his confirmation, but Warsh has to sell off more than $130 million in assets before he steps into his new job. Jay Powell could remain chair until that's settled. Warsh enters the role with an American economy that's facing high inflation.
Data from this week showed sharp price rises in April. The Bank of England is loosening its stance on crypto. The central bank is preparing to water down its planned restrictions on stablecoins. The move comes after crypto companies criticized the UK for being too conservative in its approach to digital assets. The FT's Martin Arnold broke this story. He covers financial regulation for us.
Hi, Martin.
Hi, Sonia.
So Martin, I said that the BOE is planning to soften its proposed restrictions on stablecoins. What would that look like?
Yeah, so there's two key areas that the Bank of England is planning to revise its proposals on. The first one is on holding limits. So the central bank has proposed that individuals will be restricted to owning no more than £20,000 per coin, and businesses will be limited to owning up to £10 million.
The second proposal that the Bank of England is looking at is its requirement for at least 40% of the assets backing a UK stablecoin to be put on deposit at the central bank, earning no interest. Now, this is very different to the US. So the stablecoin operators say this is making the UK very unattractive. for them.
And I think what's going to happen here is that the Bank of England is going to reduce that 40% requirement somewhat.
And what's behind this pivot, Martin?
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Chapter 3: How is the Bank of England changing its approach to stablecoins?
He promised to revive the economy and it hasn't happened at all. They were hoping to get 1% growth this year. And because of the Iran war, they're only expecting 0.5%.
Yeah. Going back to the alternative for Germany, you know, my understanding is that the party is still kind of taboo in the country. Is this the moment that it maybe starts to go mainstream?
So it's interesting. So the AfD, contrary to other right-wing populist movements in Europe, it does not feel the need to go mainstream. Actually, it's classified as extremist by the intelligence agencies here in Germany. What's happening is that for the first time, they could win a state, a federal state.
So Germany has 16 federal states and there's one, Saxony and Harz, which is holding elections in September. And for the first time, they could have a regional prime minister. They could control the regional parliament. And that would be unprecedented. The prime minister would be able to sit on the upper house, the Bundesrat.
And yeah, this would be a big, big political earthquake, even though we're talking about a very small state, two million people out of 84 million, you know, in total.
Anne-Solvayne Chastany is the FT's Berlin bureau chief. Thanks, Anne-Solvayne. Thank you. Before we go, someone may be ready to challenge Keir Starmer's position as UK Prime Minister. Yesterday, we talked about Health Secretary Wes Streeting, who gilt investors really like. Well, there are growing expectations that he might quit his gig and try to topple Starmer as soon as today.
But Starmer said he won't back down if Streeting tries his luck. You can read more on all these stories for free when you click the links in our show notes. This has been your daily FT News briefing. Check back tomorrow for the latest business news.
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