banking regulators

Swiss National Bank governing board member Martin Schudin has voiced concern that the growing use of stablecoins could weaken the role of central banks, amid mounting official scrutiny of dollar-pegged digital tokens and their impact on monetary policy and banking systems.

The Bank Policy Institute argues that banks should be able to count on the Federal Reserve's discount window as a reliable liquidity backstop, but says regulators' practices may be holding them back. The group contends that stigma, supervisory attitudes and operational hurdles discourage banks from setting up access, weakening a key safety tool. The debate follows renewed scrutiny of bank liquidity after recent banking-sector stress.

The Federal Reserve has finalized changes to its bank stress-testing framework, the annual exercise that measures whether large lenders can withstand severe economic shocks. The move follows earlier proposals to reduce volatility in test results and give banks more time to adjust to capital requirements. Banking industry groups have welcomed efforts to smooth requirements, while some critics caution that softer tests could leave the financial system less prepared for a downturn.

The Central Bank of Cyprus has fined Banque SBA €750,000 for breaches of anti-money laundering rules. The penalty, reported by AML Intelligence, adds to a string of enforcement actions by European regulators against banks failing to meet AML standards. Details on the specific breaches have not been disclosed.

The Swiss National Bank says the growing use of stablecoins could interfere with how monetary policy is transmitted to the economy, warning that widespread adoption of privately issued digital dollars may blunt the effect of central bank interest rate decisions. The comments add a central bank voice to the ongoing debate over regulating dollar-pegged tokens.