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GOP congressman calls on Fed to halt international regulatory negotiations

Emphasizing the need to prioritize America's interests, Rep. Patrick McHenry, R-N.C., sent a letter to Federal Reserve Chair Janet Yellen Jan. 31 claiming that it is "unacceptable" that the Fed continues to negotiate over international regulatory standards.

McHenry, who is also the vice chairman of the House Financial Services Committee, ripped the Fed for its participation on the Financial Stability Board, the Basel Committee on Banking and Supervision and the International Association of Insurance Supervisors. He added that the negotiations are supposed to be driven by the objectives of the new administration and ordered the Fed to "cease all attempts to negotiate binding standards" while President Donald Trump pieces together his administration.

"This is unacceptable," McHenry wrote in the letter, which was seen by S&P Global Market Intelligence.

The letter marks an application of Trump's "America first" rhetoric employed on the campaign trail and in his inauguration speech, in which he promised to make every decision on foreign affairs based on what's best for American workers and families. McHenry argues in the letter that international agreements "are killing American jobs."

"The international standards were then turned into domestic regulations that forced American firms of various sizes to substantially raise their capital requirements, leading to slower economic growth here in America," the letter reads.

The House Financial Services Committee already has the wheels moving on a bill that would rein in international negotiations by requiring federal regulators to solicit public comments, consult with state officials and report to Congress before agreeing to international standards or requirements. The Transparent Insurance Standards Act, passed by the U.S. House on Dec. 7, only covers regulation of the insurance industry.

McHenry's letter expands the scope of accountability pressure on the Fed, arguing that agreements like the Basel III Accords — which creates international standards on how banks calculate risk — should have involved more notice to the American public. Work on a new version of those rules, Basel IV, was recently delayed as rumors fly that European officials are getting cold feet with Trump's election.