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☆ Why private equity has been involved in every recent bank deal
▼ + stars: | 2024-03-06 | by ( Hugh Son | ) www.cnbc.com time to read: +2 min

Greg Nash | ReutersThe $1 billion-plus injection that New York Community Bank announced Wednesday is the latest example of private equity players coming to the need of a wounded American lender. Led by $450 million from ex-Treasury Secretary Steven Mnuchin's Liberty Strategic Capital, a group of private investors are plowing fresh funds into NYCB. That happened to Silicon Valley Bank, whose failure to raise funding last year was effectively its death knell. On Wednesday, headlines around noon that NYCB was seeking capital sent its shares down by 42% before trading was halted. "With private deals, you can talk for a while, and we almost got to the finish line before there was any publicity."

Persons: Jerome Powell, Steven Mnuchin, Greg Nash, Steven Mnuchin's, Warburg Pincus, HomeStreet, Steven Kelly, NYCB Organizations: Financial, Treasury, Reuters, York Community Bank, Strategic Capital, Centerbridge Partners, FirstSun, Wellington Management, Yale Program, Silicon Valley Bank Locations: Rayburn, Washington , U.S, NYCB, PacWest, Banc, California, it's, Silicon

☆ How you could be impacted by higher bank capital requirements
▼ + stars: | 2023-07-27 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +5 min

Their risk-level assessments have been the basis for informing how much capital they need to hold on top of baseline requirements. Silicon Valley Bank accumulated a lot of paper losses, or unrealized losses, from holding bonds while the Fed hiked interest rates. But it did not need to hold capital to protect depositors from those losses. Some also expressed concerns that banks would pass on their higher capital costs to consumers in the form of higher fees to maintain their profit levels. However, UBS, Citizens Bank and Capital One will have to hold more capital.

Persons: wouldn’t, ”, Banks, aren’t, Steven Kelly, won’t, SVB, Jonathan McKernan, Michelle Bowman, Kelly, ” Kelly, JPMorgan Chase, Morgan Stanley Organizations: New, New York CNN, Federal Reserve, Federal Deposit Insurance Corporation, Huntington Bank, Silicon Valley Bank, Signature Bank, Valley Bank, FDIC, ”, Manufacturers, JPMorgan, JPMorgan Chase, Bank of America, UBS, Citizens Bank, Capital, Nasdaq Locations: New York, Basel, Banc, California, Silicon

☆ Fed data shows failed bank First Republic was key central bank borrower
▼ + stars: | 2023-05-04 | by ( Michael S. Derby | ) www.reuters.com time to read: +2 min

NEW YORK, May 4 (Reuters) - Federal Reserve data on Thursday showed a large part of the central bank's emergency lending activities in recent weeks were tied up with the now-shuttered First Republic Bank. The Fed reported that while overall emergency lending to banks in the latest week tipped down a bit, the composition of the lending changed in key ways. The Fed said that money the bank had borrowed via the discount window, the central bank's main source of liquidity for banks, and through the Bank Term Funding Program, had now shifted to "other credit." Condtions in the banking sector "have broadly improved since early March, and the U.S banking system is sound and resilient," Powell said. Fed lending surged in March driven by banking sector troubles and has remained at very high levels since that initial surge.

☆ What to Watch as the Fed Releases Its Look Into Silicon Valley Bank
▼ + stars: | 2023-04-28 | by ( Jeanna Smialek | ) www.nytimes.com time to read: +1 min

The bank had a large share of deposits above the government’s $250,000 insurance limit. The bank’s leaders also made a big bet on interest rates staying low. That became a problem as the Fed, trying to control rapid inflation, carried out its most aggressive rate increase campaign since the 1980s. The bank held longer-term bonds that dropped in value as interest rates rose, because newer debt issued at the higher rates became more attractive for investors. Was it a problem at the Federal Reserve Bank of San Francisco, which supervised the bank, or did the fault rest with the Federal Reserve Board, which has ultimate responsibility for bank oversight?

☆ Banks sought record Fed liquidity in wake of SVB collapse
▼ + stars: | 2023-03-16 | by ( Michael S. Derby | ) www.reuters.com time to read: +5 min

That reverses a substantial portion of the balance sheet reduction accomplished since last summer. The bank lending facility is backstopped by $25 billion from the Treasury Department’s Exchange Stabilization Fund. Record discount window borrowing was somewhat unexpected as many analysts had thought banks would instead gravitate to the new lending facility. That said, some saw the discount window borrowing surge as a positive by itself. Reuters GraphicsBALANCE SHEET UPSWINGThe surge in emergency lending caused the Fed’s balance sheet to stop shrinking and grow notably larger.

☆ Explainer: Five ways the Fed could calm frazzled markets
▼ + stars: | 2022-10-13 | by ( ) www.reuters.com time to read: +5 min

Here is a look at how the Fed might forestall market dysfunction should it threaten to emerge, listed roughly from most to least likely to be deployed. TALKING THE TALKIn recent days Fed policymakers have acknowledged some liquidity strains in U.S. financial markets - the Treasury market in particular - and the risk that raising interest rates to combat inflation could exacerbate vulnerabilities both domestically and abroad. Still, Fed policymakers would likely be cautious about taking their jawboning up a notch for fear of delivering perhaps too much calm, and undoing the very tightening they need to bring inflation under control. If taken too far, as happened the last time the Fed pursued so-called quantitative tightening in 2019, it can cause market ructions. Slowing that effort could ease strains, but it could also send a confusing signal to markets that may conclude the Fed is backing away from the inflation fight.

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