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☆ Private-asset binge exposes insurance to new risks
▼ + stars: | 2023-11-30 | by ( John Foley | ) www.reuters.com time to read: +7 min

The concept is not new: Warren Buffett’s Berkshire Hathaway (BRKa.N) has used its insurance premiums to help fund everything from railways to cowboy-boot makers. The prospect of insurance companies buying risky loans or private equity investments has raised eyebrows. Many private credit assets, for example, rely on so-called private letter ratings based on confidential data. Given the private nature of private credit, it’s hard to see from the outside how big these risks are, or where they lurk. Besides, even if the share of life insurance assets that are mis-rated or undercapitalized is tiny, smaller insurers could carry more concentrated risk.

Persons: Blackstone, Warren Buffett’s Berkshire Hathaway, Fitch, Kroll, Egan, Jones, DBRS Morningstar, Banks, SVB, Jonathan Guilford, Neil Unmack, Peter Thal Larsen, Oliver Taslic Organizations: Reuters, Apollo Global Management, KKR, Global Atlantic, Investments, National Association of Insurance, England’s Everton FC, Rivals, Reuters Graphics Reuters, Federal Reserve, Federal Deposit Insurance Corp, Athene, P Global, Insurance, SVB, Thomson Locations: Global, Delaware , New York, Iowa, New York, London

☆ Payments-app war drags banks into discomfort zone
▼ + stars: | 2023-11-14 | by ( John Foley | ) www.reuters.com time to read: +4 min

NEW YORK, Nov 14 (Reuters Breakingviews) - Banks tend to have a consistent message for customers who unwittingly make payments to scammers: tough break. Rapid growth in digital payments has brought out a softer side in lenders such as JPMorgan (JPM.N) and Bank of America (BAC.N). If the con artist was posing as the victim’s bank, a government agency or a legitimate company – say, a utility – the sender’s bank will return the funds if other criteria are met and recoup them from the recipient’s bank. From next year its banks will have to reimburse victims of online payment deceit. Moreover, convenience and trust are powerful weapons: Bank of America customers now use Zelle twice as often as their checkbooks.

Persons: Banks, Taylor Swift, Zelle, Wells, Jeffrey Goldfarb, Sharon Lam Organizations: Reuters, JPMorgan, Bank of America, TSB, SVB, Warning Services, Services, PNC Financial, US Bancorp, Truist, Thomson Locations: Zelle, Britain, Wells Fargo

☆ NextEra workers roll the dice with big bet on company stock
▼ + stars: | 2023-09-21 | by ( Tim Mclaughlin | ) www.reuters.com time to read: +8 min

America’s largest renewable power company is among several U.S. energy and utility companies, including Exxon and Southern Company, that continue to promote big, concentrated bets on company stock in worker retirement plans. Nearly 50% of the investments in NextEra’s employee-funded 401(k) retirement plan are in company stock, the highest among all 30 companies in the S&P 500 Utilities Sector (.SPLRCU). NextEra declined to comment on its use of company stock in employee 401(k) plans. "If we saw a concentration of more than 20% in a single company stock, we would definitely tell them it's a big risk." `Keith Rasmussen, a retired geologist, said he still feels the financial repercussions of holding big bets on company stock in his retirement plans.

Persons: Robert Knoche, Yoon, NextEra, ”, Alicia Munnell, Kristin McKenna, McKenna, Ryan Frazier, Keith Rasmussen, jolt, Rasmussen, “, ” Rasmussen, Richard Valdmanis, Anna Driver Organizations: REUTERS, Exxon, Southern Company, Corporate America, Enron, Utilities, Vanguard Group, Center for Retirement Research, Boston College, Employees, Silicon Valley Bank, Darrow Wealth Management, SEC, Corporations, U.S . Securities, Exchange Commission, Southern Co, Dominion Energy Inc, Dominion, Chesapeake Energy Corp, Thomson Locations: Douglas County , Kansas, U.S, Silicon, Boston, Atlanta , Georgia

☆ Scaramucci Emerges as a Leading Bidder for SVB Financial’s Venture-Capital Arm
▼ + stars: | 2023-09-16 | by ( Lauren Thomas | ) www.wsj.com time to read: 1 min

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Persons: Dow Jones

☆ SVB Financial nears deal to sell VC arm, Scaramucci leading bidder, Wall Street Journal reports
▼ + stars: | 2023-09-15 | by ( ) www.reuters.com time to read: +1 min

SVB (Silicon Valley Bank) logo is seen in this illustration taken March 10, 2023. REUTERS/Dado Ruvic/Illustration Acquire Licensing RightsSept 15 (Reuters) - SVB Financial Group (SIVBQ.PK) is closing in on an agreement to sell its venture-capital and credit investment business SVB Capital in order to avoid bankruptcy, the Wall Street Journal reported on Friday, citing people familiar with the matter. A duo of Anthony Scaramucci's SkyBridge Capital and Atlas Merchant Capital, as well as San Francisco private-equity firm Vector Capital, are the two front-runners competing in the bidding process for SVB Capital, the report added. SVB Financial did not immediately respond to a Reuters request for comment. SVB Financial had collapsed into bankruptcy after former unit Silicon Valley Bank's failure in March triggered the worst U.S. banking crisis in 15 years.

Persons: Dado Ruvic, Anthony Scaramucci's, Pritam Biswas, Devika Organizations: Bank, REUTERS, SVB Financial, Wall Street, Atlas Merchant Capital, Vector, SVB Capital, SVB, SVB Securities, Thomson Locations: Francisco, Bengaluru

☆ US Senator Warren questions Goldman's role in SVB failure
▼ + stars: | 2023-06-30 | by ( ) www.reuters.com time to read: +1 min

Senator Elizabeth Warren has questioned Goldman Sachs' (GS.N) role in the failure of Silicon Valley Bank (SVB) and the profits it allegedly made in the process. The letter said Goldman Sachs benefited further as market turmoil following SVB's failure increased the value of the discounted bond portfolio by an estimated $100 million. Goldman acquired a bond portfolio on which SVB booked a $1.8 billion loss, a transaction that preceded a failed share sale by the lender for which the Wall Street bank was an underwriter. But it's well known that banks don't collect fees when capital raises are canceled," said Tony Fratto, a spokesman for Goldman Sachs. He reiterated that Goldman expects proceeds from the SVB portfolio sale to be closer to $50 million, and not $100 million.

Persons: Elizabeth Warren, Goldman Sachs, SVB, Warren, Goldman, Tony Fratto, Jaiveer Singh, Saeed Azhar, Pooja Desai Organizations: Silicon Valley Bank, Federal Deposit Insurance Corporation, SVB, Valley Bank, U.S, underwriters, Thomson Locations: Silicon, Bengaluru, New York

☆ The next revolution in monetary policy is underway
▼ + stars: | 2023-06-30 | by ( Felix Martin | ) www.reuters.com time to read: +7 min

LONDON, June 30 (Reuters Breakingviews) - Monetary policy, Milton Friedman said, acts on the economy with long and variable lags. Monetary policy regimes evolve in response to the changing nature of prevailing economic challenges – though this also takes time. The next revolution in monetary policy may be brewing. One question Gopinath did not address is how the financial system came to dominate monetary policy. When contractions hit, however, central banks eased monetary policy and governments loosened their purse strings, just as before.

Persons: Milton Friedman, Gita Gopinath, Gopinath, ’, “, Peter Thal Larsen, Pranav Kiran, Oliver Taslic Organizations: Reuters, International Monetary Fund, Bank for International, IMF, Central, SVB, Signature Bank, Credit Suisse, Fed Funds, BIS, Thomson Locations: Portuguese, Sintra, Korean, United States, Europe, Central, England, London, U.S, China, Ukraine, “

NEW YORK, June 29 (Reuters) - A U.S. bankruptcy judge said Thursday that he would allow SVB Financial Group to sell its investment banking division, once the company has ensured that it is not releasing any liabilities related to the collapse of its Silicon Valley Bank unit. James Bromley, an attorney for SVB Financial, told Glenn that it would remove the liability releases from the deal by Friday. SVB Financial owned Silicon Valley Bank before it was seized by the U.S. Federal Deposit Insurance Corporation (FDIC) in March, and it is attempting to sell its remaining assets in bankruptcy. Glenn also criticized the FDIC during the court hearing, saying he would not allow the agency to block SVB Financial from getting information about its seizure of about $2 billion from SVB Financial' s bank accounts. Silicon Valley Bank's failure in March triggered the worst U.S. banking crisis in 15 years.

Persons: Martin Glenn, Jeff Leerink, Glenn, James Bromley, SVB, you'd, I'm, Erik Bond, Dietrich Knauth, Alexia Garamfalvi, Diane Craft Organizations: YORK, SVB, Bank, Bankruptcy, SVB Securities, Baupost, Silicon Valley Bank, U.S . Federal Deposit Insurance Corporation, FDIC, Citizens, Thomson Locations: Manhattan, Silicon, U.S, backstop

☆ US banks gird for dose of post-stress-test trauma
▼ + stars: | 2023-06-29 | by ( John Foley | ) www.reuters.com time to read: +8 min

NEW YORK, June 29 (Reuters Breakingviews) - For the biggest U.S. banks, the nerves this year come after the exam. Fed stress tests subject banks to a theoretical market shock and incorporate elements of operational risk, and then spit out a “stress capital buffer” requirement tailored to each firm. The risk for banks is that new rules get piled on top of existing regulations in a process known as gold-plating. U.S. banks are awaiting a proposal from their regulators to revamp capital rules, expected in July. Gruenberg said regulators were considering expanding the reach of a stricter set of capital rules to include banks with over $100 billion in assets.

Persons: Goldman Sachs, Michael Barr, Jamie Dimon, Banks, Morgan Stanley, Jay Powell, PwC, watchdogs, Michelle Bowman, Martin Gruenberg, It’s, Gruenberg, Peter Thal Larsen, Streisand Neto Organizations: YORK, Reuters, Federal Reserve, JPMorgan, Citigroup, Banking Supervision, Basel III, America, State Street, Bank of New York Mellon, Big, Bank, U.S ., Reuters Graphics Reuters, Signature Bank, First, Fed, Federal Deposit Insurance, FDIC, Credit Suisse, Committee, “, “ Basel IV, Federal, Thomson Locations: U.S, Basel, Goldman, Big U.S, Swiss, “ Basel

☆ Stock market heads into the second half with near 15% total return so far in 2023
▼ + stars: | 2023-06-24 | by ( Michael Santoli | ) www.cnbc.com time to read: +8 min

The S & P 500 had just sustained its worst calendar-year loss in half a generation. Textbook consolidation Last week's modest 1.4% decline in the S & P 500 did little to alter either the favorable underlying market trend or the notion that more consolidation might be in store. The median year-end S & P 500 target among Street strategists is 4250, 100 points below Friday's close, and the most-bullish forecast is for about a 5% further gain. And just as the market's performance has been skewed toward these hit hyper-cap tech stocks, so is the S & P 500's valuation. .SPX 1Y mountain S & P 500 1-year Big picture: The market this year has chewed through plenty of perfectly valid excuses to falter without doing so.

Persons: Ned Davis, Ed Clissold, Jeremy Schwartz, Lori Calvasina, we'll Organizations: Big Tech, Federal Reserve, Nasdaq, Intelligence, Ned Davis Research, New, Nvidia, General Motors, Whirlpool, RBC Capital Locations: DC

☆ Bankrupt SVB Financial still exploring options for venture capital arm
▼ + stars: | 2023-06-21 | by ( ) www.reuters.com time to read: +1 min

June 21 (Reuters) - Bankrupt SVB Financial Group said on Wednesday it is continuing to evaluate strategic alternatives for SVB Capital, its venture capital and credit investment arm, as well as other assets and investments. The disclosure comes days after the company agreed to sell its investment banking division, SVB Securities, to a group led by the segment's chief executive officer. SVB Financial had collapsed into bankruptcy after former unit Silicon Valley Bank's failure in March triggered the worst U.S. banking crisis in 15 years. A hearing to approve the sale of SVB Securities is scheduled for June 29 in the United States Bankruptcy Court for the Southern District of New York. The deal will close shortly thereafter, SVB Financial said.

Persons: Niket, Devika Organizations: SVB Financial, SVB Capital, SVB Securities, SVB, Citizens, Bank, Jitters, KBW, United States, Southern, of, Thomson Locations: U.S, backstop, of New York, Bengaluru

☆ SVB agrees to sell its investment banking division
▼ + stars: | 2023-06-18 | by ( ) www.reuters.com time to read: +1 min

June 18 (Reuters) - SVB Financial Group (SIVBQ.PK) said on Sunday it has entered into an agreement to sell its investment banking division, SVB Securities, to a group led by Jeff Leerink and backed by funds managed by The Baupost Group. The bidder group led by Leerink, who is chief executive of SVB Securities, will acquire the investment banking business for a combination of cash, repayment of an intercompany note, and a 5% equity instrument, the company said. First Citizens BancShares Inc (FCNCA.O) bought all the loans and deposits of the failed bank in March, leaving some $90 billion in securities with the FDIC for sale. The lender continues to evaluate strategic alternatives for its division, SVB Capital, and company's other assets and investments, it said. Reporting by Akanksha Khushi in Bengaluru; Editing by Leslie AdlerOur Standards: The Thomson Reuters Trust Principles.

Persons: Jeff Leerink, Leerink, Akanksha, Leslie Adler Organizations: SVB Financial, SVB Securities, Baupost, Federal Deposit Insurance Corporation, Silicon Valley Bank, BancShares Inc, SVB, Suisse, UBS, Thomson Locations: SVB, reverberated, Bengaluru

☆ Getting rich is only a swipe away
▼ + stars: | 2023-06-02 | by ( Dan Defrancesco | ) www.businessinsider.com time to read: +6 min

Actor Leonardo DiCaprio, in his role as Jordan Belfort in the 2013 film, "The Wolf of Wall Street." Now a fraudster is only one swipe away from pitching you on how he or she can change your life with this simple strategy. But for a population that has grown accustomed to on-demand entertainment and instant results, getting rich apparently out of nowhere seems completely plausible. And if you'd like a rundown of how the big banks are thinking through their AI strategy, and the execs leading the charge, we've got you covered. We've got a rundown of the 10 most prestigious private middle and high schools in NYC, along with tips for getting in.

Persons: Dan DeFrancesco, Mike didn't, we've, I've, Leonardo DiCaprio, Jordan Belfort, There's, Dan Geiger, Matt Onofrio, Onofrio, you'd, Samantha Lee, I'm, Goldman Sachs, SMBs, Nvidia cofounders, We've, you've, Here's, Jeffrey Cane, Nathan Rennolds Organizations: Paramount, Onofrio, Garden State, JPMorgan, Apple, Street, SVB Securities, SVB Financial, Bloomberg, American Express, Nvidia, Senate, LinkedIn Locations: New Jersey, Silicon, NYC, New York, London

☆ HSBC to rename British arm of Silicon Valley Bank next month- Sky News
▼ + stars: | 2023-05-29 | by ( ) www.reuters.com time to read: +1 min

May 29 (Reuters) - HSBC (HSBA.L) is set to announce next month that the UK arm of Silicon Valley Bank will be renamed HSBC Innovation Banking, Sky News reported on Monday. The British government and the Bank of England facilitated a private sale of SVB UK to HSBC in March, in a move which would protect deposits without taxpayer support. Startup-focused lender SVB Financial Group became the largest bank to fail since the 2008 financial crisis. SVB is undergoing bankruptcy proceedings after California's regulators shuttered Silicon Valley Bank and appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. The regulators then agreed to backstop a deal for regional lender First Citizens BancShares (FCNCA.O) to acquire Silicon Valley Bank.

☆ SVB Financial defeats FDIC effort to seize incoming tax refunds
▼ + stars: | 2023-05-17 | by ( Dietrich Knauth | ) www.reuters.com time to read: +2 min

Judge Martin Glenn in Manhattan handed a victory to SVB Financial in broader dispute over FDIC's efforts to recoup its costs in rescuing the failed Silicon Valley Bank, preventing the regulator from claiming future tax refunds that SVB Financial valued at $300 million. FDIC sought to escrow those funds while the regulator determines whether they properly belong to the seized bank or the bankrupt parent company. Glenn ruled that FDIC had no authority to intercept checks that were clearly written out to "SVB Financial." He ordered FDIC to return the intercepted checks by Friday, and to send any future tax refunds checks to SVB Financial. FDIC argued that the tax refunds may be owed to the seized bank, which is now run by First Citizens BancShares, under a tax agreement between the bank and its former parent company.

May 15 (Reuters) - Greg Becker, the former chief executive officer of Silicon Valley Bank, is set to appear before the U.S. Congress on Tuesday, two months after the collapse of his bank sparked panic among bank customers and investors, forcing the government to backstop deposits. California banking regulators moved quickly to shut down Silicon Valley Bank on March 10 after depositors withdrew $42 billion in 24 hours. Becker will testify before the Senate Banking Committee alongside Scott Shay and Eric Howell, the former chair and president, respectively, of Signature Bank. When his manager left to work for Silicon Valley Bank, Becker followed, he said on a 2021 Bloomberg podcast. Before becoming president and CEO of SVB Financial Group, Becker co-founded SVB Capital, the company's investment arm.

☆ SVB Financial Group says quarterly results filing will be delayed
▼ + stars: | 2023-05-09 | by ( ) www.reuters.com time to read: +1 min

May 9 (Reuters) - SVB Financial Group will not be able to meet the U.S. Securities and Exchange Commission's deadline for reporting its quarterly results, the bankrupt parent of Silicon Valley Bank disclosed in a filing on Tuesday. SVB Financial said its limited staff was dedicated to exploring strategic alternatives for the remaining businesses. Californian regulators shuttered Silicon Valley Bank in early March and appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. The failures of SVB and Signature Bank triggered the biggest banking crisis since 2008, fueling volatility in the stocks of several regional lenders and exacerbating recession fears. Reporting by Manya Saini in Bengaluru; Editing by Shinjini GanguliOur Standards: The Thomson Reuters Trust Principles.

☆ Warren Buffett says Berkshire is cautious on banking sector
▼ + stars: | 2023-05-06 | by ( John Mccrank | ) www.reuters.com time to read: +4 min

REUTERS/Rachel MummeyNEW YORK, May 6 (Reuters) - Warren Buffett on Saturday said Berkshire Hathaway (BRKa.N) is cautious around the banking sector, largely because of poor messaging by officials around government-insured deposits, as well as distorted incentives he said were brought on by banking regulation. "The U.S. government and the American public have no interest in having a bank fail and having deposits actually lost by people," he said. Part of the reason for that is that incentives in banking regulation are "so messed up," he said. First Republic Bank, the latest regional U.S. bank to fail, disclosed that it was offering non-guaranteed jumbo-sized mortgages at fixed rates in its annual report. "The incentives in bank regulation are so messed up and so many people have an interest in having them messed up -- it's totally crazy," Buffett said.

☆ Largest banks doing big deals not ideal, FRC an exception - Powell
▼ + stars: | 2023-05-04 | by ( ) www.reuters.com time to read: +1 min

NEW YORK, May 3 (Reuters) - Federal Reserve Chair Jerome Powell said it was probably good policy that the largest banks are not doing big acquisitions, but said that JPMorgan Chase & Co's (JPM.N) acquisition of First Republic Bank (FRC.N) was an exception. Regulators have to follow the law of going with the least-cost bid, Powell said. The Federal Reserve on Wednesday raised interest rates by a quarter of a percentage point and signaled it may pause further increases. Powell said that the resolution of First Republic was "an important step to drawing a line" under a period of severe stress in the banking system. Powell added that the speed of the run on SVB needed to be reflected in supervision and regulation.

[1/4] A view of the Goldman Sachs stall on the floor of the New York Stock Exchange July 16, 2013. REUTERS/Brendan McDermidMay 4 (Reuters) - Goldman Sachs Group Inc (GS.N) said in a filing on Thursday it is cooperating with government probes into collapsed Silicon Valley Bank. The Wall Street bank is "cooperating with and providing information to various governmental bodies in connection with their investigations and inquiries" into SVB, including the two companies' dealings in March. The Wall Street bank acquired a bond portfolio on which SVB booked a $1.8 billion loss, a transaction that preceded a failed SVB share sale where Goldman was an underwriter. Goldman was also among the underwriters named as defendants in a securities class action lawsuit related to several SVB share offerings in 2021 and 2022, it said in a regulatory filing.

☆ Analysis: Fed report on SVB collapse could buoy shareholder lawsuits
▼ + stars: | 2023-04-29 | by ( Jack Queen | ) www.reuters.com time to read: +4 min

FILE PHOTO: The Silicon Valley Bank headquarters seen from the street in Santa Clara, California, U.S. March 13, 2023. The bank’s parent company, SVB Financial Group, entered bankruptcy on March 17. The Fed’s report concluded that SVB did not adequately hedge against risk, failed its own liquidity stress tests, and chased short-term profits at the expense of long-term stability. Rather than address these risks, the bank changed how it measured them, the report found. “I see this (Fed) report as being extraordinarily useful evidence to dangle in front of a judge or jury on class action lawsuits against accounting firms,” Cox said.

NEW YORK, April 28 (Reuters) - Bearish options traders are ramping up bets on further declines in the beaten-down shares of First Republic Bank (FRC.N), though strategists say they could run into trouble cashing in their wagers if the bank goes into receivership. Profitable put options are typically automatically exercised by selling underlying shares - either already owned by the investors or newly purchased - at a profit. But brokers might restrict share sales when a stock is halted, keeping investors from reaping gains. Some traders found this out the hard way when they ran into trouble cashing in bearish options bets on failed lenders SVB Financial Group and Signature Bank. The Options Clearing Corp and brokerages Charles Schwab, Robinhood, Interactive Brokers and Fidelity did not immediately respond to a request for comment.

☆ First Republic could make failure safe again
▼ + stars: | 2023-04-27 | by ( John Foley | ) www.reuters.com time to read: +4 min

NEW YORK, April 27 (Reuters Breakingviews) - When Silicon Valley Bank and Signature Bank failed in March, U.S. authorities bailed out their depositors regardless of size. The slower destruction at First Republic Bank (FRC.N) could provide an opportunity to reverse the regrettable precedent. And while it’s never good when a business fails, there’s a potential benefit to letting First Republic go. First Republic had $233 billion of assets at the end of March, and $104 billion of deposits compared with $176 billion at the end of December. Silicon Valley Bank, owned by SVB Financial, was taken into receivership on March 10, while Signature Bank was closed by the Federal Deposit Insurance Corp on March 12.

☆ SVB's former parent may need new funding after $2bln cash seizure
▼ + stars: | 2023-04-26 | by ( Dietrich Knauth | ) www.reuters.com time to read: +2 min

The FDIC has also not fully explained why the cash was seized, Bromley said. FDIC's attorney, Derek Baker, told Glenn that SVB Financial's bank accounts were properly seized as part of FDIC's takeover of the failed bank. The cash is being held as a set-off against the regulator's costs in stepping in to protect SVB customer deposits, and FDIC is working to provide more detail about its claims against SVB Financial, Baker said. Glenn said he needed more information about the FDIC's authority to seize cash and how disputes related to the seizure should be resolved. SVB Financial is also still waiting for the full return of financial records that were seized as part of the bank takeover.

☆ SVB's former parent may need new funding after $2 billion cash seizure
▼ + stars: | 2023-04-26 | by ( Dietrich Knauth | ) www.reuters.com time to read: +2 min

April 26 (Reuters) - Silicon Valley Bank's former owner may need to take out a bankruptcy loan amid uncertainty about the U.S. Federal Deposit Insurance Company's seizure of $2 billion in cash from the company, its attorney said Wednesday. The FDIC has also not fully explained why the cash was seized, Bromley said. FDIC's attorney, Derek Baker, told Glenn that SVB Financial's bank accounts were properly seized as part of FDIC's takeover of the failed bank. Glenn said he needed more information about the FDIC's authority to seize cash and how disputes related to the seizure should be resolved. SVB Financial is also still waiting for the full return of financial records that were seized as part of the bank takeover.

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