1 February 2026 | 4:12PM EST Economics Research US Daily: Kevin Warsh on Interest Rate Policy, Balance Sheet Policy, and Financial Regulation David Mericle +1(212)357-2619 | david.mericle@gs.com Goldman Sachs & Co. LLC Pierfrancesco Mei +1(212)902-8809 | pierfrancesco.mei@gs.com Goldman Sachs & Co. LLC Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to www.gs.com/re ...

Core Viewpoint - President Donald Trump has nominated Kevin Warsh to be the next chairman of the Federal Reserve, following a lengthy deliberation process, with the current chairman Jerome Powell's term set to expire in May 2022 [1]. Group 1: Kevin Warsh's Background - Warsh served as a member of the Fed's Board of Governors from 2006 to 2011 and was the youngest Fed governor in history [2]. - He has experience in the private sector at JPMorgan and served in President George W. Bush's administration prior to his first Fed appointment [2]. - Warsh has held roles at the Hoover Institution, Stanford's Graduate School of Business, and the board of UPS, and has been an economic adviser to the Congressional Budget Office [4]. Group 2: Industry Reactions - Bank of America CEO Brian Moynihan expressed confidence in Warsh's background and experience, wishing him well in the confirmation process [7]. - UPS CEO Carol Tomé highlighted Warsh's financial markets knowledge and crisis management expertise, celebrating his nomination [7]. - U.S. Chamber of Commerce CEO Suzanne Clark noted Warsh's focus on economic growth and stable prices, looking forward to his confirmation [8]. - Investment Company Institute CEO Eric Pan commended Warsh's experience in monetary policy and financial regulation, emphasizing his understanding of the Federal Reserve's dual mandate [8]. - American Bankers Association CEO Rob Nichols praised Warsh as an experienced policymaker with a deep understanding of monetary policy and the role of banks in the economy [11]. - Independent Community Bankers of America CEO Rebeca Romero Rainey congratulated Warsh, noting his understanding of community banks' role in the economy [12].

Core Viewpoint - The "2025 China Investment and Wealth Management Company TOP 30 Voting List" aims to protect financial consumers' rights and promote a people-centered financial service approach through public voting and evaluation of investment firms [1]. Group 1: Selection Process - The candidate list for the 2025 China Investment and Wealth Management Companies is based on public and official big data, along with reports from licensed evaluation agencies [1]. - Investors are invited to participate in a "commentary-style" voting process to select their preferred investment firms, culminating in the publication of the final list [1]. Group 2: Evaluation Criteria - The final list, to be published by December 30, 2025, considers factors such as licensing status, overall strength, assets under management (AUM), long-term historical performance (including risk-adjusted returns), and the absence of significant regulatory penalties or negative public sentiment [1]. Group 3: Industry Trends - Industry concentration is increasing, with leading institutions in various segments solidifying their positions by leveraging brand, channels, and research capabilities to attract funds [4]. - Compliance and risk control are paramount, with "licensed operation" and "absence of significant risks" becoming essential criteria for survival and inclusion [5]. - Competition and collaboration are intensifying, particularly between bank wealth management subsidiaries and public funds in fixed-income sectors, as well as among leading third-party sales platforms, brokerages, and private banks [6]. - The integration of technology is deepening, with AI becoming a standard feature in investment research, risk control, and customer service, significantly contributing to the overall strength of leading institutions [7].

Core Insights - JPMorgan CEO Jamie Dimon reportedly earned a $770 million compensation package last year, benefiting from rising stock prices, increased M&A activity, and regulatory rollbacks under the Trump administration [1][2][5] - Dimon's compensation for 2024 was approximately $39 million, reflecting an 8% increase from the previous year, which included a $1.5 million base salary, a $5 million cash bonus, and $32.5 million in performance-based stock awards [3] - Comparatively, Citi's CEO Jane Fraser and Goldman Sachs CEO David Solomon earned up to $100 million in 2025, with their companies' stock prices rising over 65% and 53%, respectively [3] Company Compensation Trends - Dimon's substantial earnings were attributed to a combination of salary, bonuses, dividends, and stock options, with a notable 34% increase in JPMorgan's stock price over the past year [1][5] - JPMorgan is expected to release its full-year financial results and CEO compensation details for 2025 on January 13 [6] Regulatory Environment - The Trump administration has relaxed capital requirements for banks, moving away from stricter regulations that would have mandated larger cash reserves to mitigate losses, allowing banks to allocate more capital towards lending and trading [7][8] - Dimon has been critical of regulations like Basel III, which would require banks to increase their capital buffers by 9% [6]

Regulatory Environment - In 2025, Shenzhen's financial regulatory environment has become increasingly stringent, with over 34 fines issued totaling more than 110 million yuan, primarily targeting banks, insurance, payment, and financial management institutions [2][3] - The "double penalty system" has been emphasized, holding both institutions and individuals accountable, with over 160 individuals facing warnings or fines, including lifetime bans for severe violations [2][3] Financial Industry Performance - Shenzhen's financial sector achieved a value-added of 245.85 billion yuan in the first half of 2025, marking a year-on-year growth of 10.9%, positioning it alongside Beijing and Shanghai [3] - The financial work meeting on December 15 highlighted the need for stronger regulatory collaboration and mechanisms to enhance compliance among financial institutions [3] Banking Sector Penalties - The banking sector in Shenzhen faced fines exceeding 69 million yuan, with state-owned banks being the most affected, particularly in loan management violations [4][5] - Major fines included 11.5 million yuan for the Industrial and Commercial Bank of China and 1.88 million yuan for Ping An Bank, indicating a focus on compliance in lending practices [5][6] Payment Institutions Oversight - The People's Bank of China issued fines totaling approximately 37.19 million yuan against payment institutions, reflecting ongoing high-pressure regulatory scrutiny [7][8] - Common violations among payment institutions included breaches of merchant management and clearing regulations, with significant penalties for repeated offenses [9] Insurance Sector Challenges - The insurance sector in Shenzhen, with total assets of 8.77 trillion yuan, has faced significant regulatory scrutiny due to issues like data authenticity and improper fund utilization [11][12] - The "double penalty system" has been applied rigorously, with personal penalties exceeding institutional fines, highlighting a shift towards individual accountability in the insurance industry [12][13]

Core Viewpoint - The prediction markets indicate that Kevin Hasset has a 53% chance of being appointed as the new Fed Chair, while Kevin Worsh's odds have dropped to 34%, highlighting a competitive selection process for the position [1]. Economic Growth and Monetary Policy - Anticipated GDP growth is expected to accelerate due to $400 billion in fiscal policy and the Fed's rate cuts, leading to significant fiscal and monetary policy actions by 2026 [3]. - Historically, economic growth tends to accelerate from the first year of a president to the midterm year, which typically results in rising bond yields and a defensive stock market [4]. Candidates' Perspectives - Both candidates, Hasset and Worsh, believe in a productivity boom that could allow for lower Fed funds rates, with recent employment data suggesting a need for a lower neutral rate [6]. - The differences between the two candidates may be more pronounced in their approaches to the Fed's balance sheet rather than in their rate policies [8]. Balance Sheet and Financial Regulation - Worsh has been described as hawkish regarding the Fed's balance sheet, arguing it should not be at its current level, which is linked to financial regulation issues [9][10]. - The Fed is currently expanding its balance sheet to address a shortage of bank reserves, a situation expected to change with financial deregulation anticipated in 2026 [10][11].

ICYMI:BSCN (@BSCNews):UK TO REGULATE CRYPTO UNDER FINANCIAL LAW FROM 2027- The UK will bring cryptocurrencies like Bitcoin under full financial regulation from 2027, placing crypto alongside traditional financial products, per Reuters.- The Treasury plans to extend existing financial laws to https://t.co/RhWK96NN51 ...

What is FSOC. >> FSOC is the abbreviation for the Financial Stability Oversight Council. It was a council created in the wake of the financial crisis to make sure the financial system didn't blow up again.It's composed of top regulators. The Treasury Secretary is the chairman. The head of the Federal Reserve is on it.Top financial regulators from the federal and the state level are all part of the group. They're supposed to monitor the financial system. Over the years, what they have generally done is they' ...

Employees at the Consumer Financial Protection Bureau have been in a state of limbo for months. https://t.co/1G4pxvNNp4 ...

The Korea Financial Intelligence Unit (FIU) is expected to impose institutional and personal penalties on Korbit, Gopax, Bithumb, and Coinone in sequence, following Dunamu. Industry insiders expect the violations to be similar across exchanges, with penalties comparable to Dunamu’s, and most measures likely to be completed by the first half of next year. Previously, FIU fined Dunamu, the operator of Upbit, 35.2 billion KRW (about $24.35 million). https://t.co/ZpCBalQXVb ...