U.S. policy shifts in financial regulation could have global consequences, warn Gary Gensler, Lev Menand and Joshua Younger in a VoxEU analysis. They say current U.S. moves combine familiar deregulatory steps with largely unprecedented policies that may reshape the dollar-based system and international finance. "[They] could endanger the foundations of the global dollar system, namely bilateral cooperation, trust and interdependence," the authors write.

The economists point to concrete measures: proposals to step back from the Basel regulatory framework, suggestions to exclude government bonds from some leverage metrics, a softer approach to bank merger reviews, and efforts that have almost dismantled the Consumer Financial Protection Bureau. Treasury official Scott Bessent is cited as saying the U.S. should "selectively pick what is inspiring" from Basel rules. Analysts warn these changes could raise leverage, weaken enforcement, encourage financial crime (including via stablecoins outside government reach) and ultimately put upward pressure on interest rates.

Basel rules—originating from the 1974 banking crisis and tightened under Basel III after 2010 to raise capital and liquidity—have long underpinned international banking standards. The VoxEU piece argues U.S. unilateral departures could undermine those norms and harm global financial stability. Rohit Chopra, who led the CFPB under President Biden, is quoted: "by its nature the CFPB is a law‑enforcement agency. It sues big financial institutions that cheat consumers." #USD #Basel #CFPB #stablecoins #FiatNews