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☆ Foxconn founder Gou, possible Taiwan presidential candidate, to visit US
▼ + stars: | 2023-03-27 | by ( ) www.reuters.com time to read: +2 min

TAIPEI, March 27 (Reuters) - Terry Gou, the billionaire founder of major Apple Inc (AAPL.O) supplier Foxconn (2317.TW), will visit the United States this week, his office said on Monday, as he considers another run for Taiwan's presidency. Gou will leave for the United States on Monday evening for a 12-day visit his office called a "journey of scientific and technological economic development" and will also speak at the Washington think-tank, the Brookings Institution. "Not only the United States, but also other major democratic allies have been gradually paying attention to security issues in the Asia-Pacific region," his office said in a statement. Taiwanese presidential candidates traditionally go to the United States before elections given Washington's oversized role in ensuring Taiwan's security in the face of China's military threats to the island Beijing views as Chinese territory. While Gou has said he is considering another run for the January 2024 presidential election, the KMT has yet to choose its presidential candidate.

March 27 (Reuters) - The Federal Deposit Insurance Corp (FDIC) and its flagship deposit insurance fund have been active since the Great Depression to provide an orderly resolution for failed banks and to reimburse certain customer accounts. Here's what you need to know about the fund and how it works:WHAT IS THE DEPOSIT INSURANCE FUND? The FDIC's deposit insurance fund helps to fulfill the agency's guarantee of bank deposits up to $250,000. As of the end of last year, the deposit insurance fund balance stood at $128.2 billion. The FDIC by law is required to resolve failed banks using the least costly option to minimize losses to its deposit insurance fund.

[1/3] The logo of Swiss bank Credit Suisse is seen in front of a branch office in Bern, Switzerland November 29, 2022. REUTERS/Arnd Wiegmann/File PhotoWASHINGTON/FRANKFURT, March 26 (Reuters) - Stress in the banking sector is being closely monitored for its potential to trigger a credit crunch, a U.S. Federal Reserve policymaker said on Sunday, as a European Central Bank official also flagged a possible tightening in lending. "What's unclear for us is how much of these banking stresses are leading to a widespread credit crunch. Meanwhile in Europe, the ECB believes that recent banking sector turmoil may result in lower growth and inflation rates, its vice president Luis de Guindos said. Turbulence among banking stocks on both sides of the Atlantic continued into the end of the week, despite efforts by politicians, central banks and regulators to dispel concerns.

WASHINGTON, March 26 (Reuters) - Recent stress in the banking sector and the possibility of a follow-on credit crunch brings the U.S. closer to recession, Minneapolis Fed president Neel Kashkari said Sunday in comments to CBS show Face the Nation. "It definitely brings us closer," Kashkari said. "What's unclear for us is how much of these banking stresses are leading to a widespread credit crunch. "At the same time," he continued, "we've seen that capital markets have largely been closed for the past two weeks. The Fed has rolled out an emergency lending program meant to keep other regional lenders from trouble should deposit withdrawals increase.

"It was a quirky situation," St. Louis Fed President James Bullard said in comments to a St. Louis community group. 'FELT VERY STABLE'The Fed raised interest rates by a quarter of a percentage point on Wednesday, its ninth straight increase. This wasn't a straightforward decision," Atlanta Fed President Raphael Bostic said in an interview with National Public Radio, a U.S. media outlet. But "that's a different issue than the macro policy issue that we were dealing with in terms of interest rates," Bostic said. So the conditions were right to do monetary policy the way we want to do monetary policy."

Discussions between the SEC and Coinbase broke down in recent weeks, with one source saying the two sides had moved "further apart." The crypto industry believes it operates in a regulatory gray area not governed by existing U.S. securities laws - and that new legislation is needed to regulate the industry. "But if necessary, we welcome the opportunity for Coinbase and the broader crypto community to get clarity in court." Prior to Gensler's arrival, the SEC engaged in targeted enforcement, but the Democratic chair has ratcheted up focus on crypto platforms themselves. "There couldn't be a more significant development for crypto markets and crypto investors," said Philip Moustakis, former SEC enforcement lawyer and partner with Seward and Kissel LLP in New York.

March 23 (Reuters) - The U.S. Securities and Exchange Commission on Thursday issued an investor alert warning that firms offering crypto asset securities may not be complying with U.S. laws. Unregistered offerings of such securities may not provide important data, including audited financial statements, for informed decision making, the SEC said. The securities watchdog has been cracking down on the crypto industry, which its chair has called a "Wild West" riddled with misconduct. Crypto exchange Coinbase (COIN.O) announced on Wednesday that it had received a Wells notice - a formal declaration that SEC staff intend to recommend an enforcement action. "Crypto asset entities might use these in lieu of audited financial statements in order to obscure and confuse customers about the safety of their assets," the SEC said.

The Fed raised its benchmark overnight interest rate by a quarter of a percentage point on Wednesday, the ninth straight policy meeting that ended with a rise in borrowing costs since the current tightening cycle began in March 2022. "It's really ... a question of not knowing at this point," Powell told reporters after the meeting. This is 12 days ago," that a pair of bank failures reshaped the financial landscape facing the central bank, with potential implications for the real economy and the path of inflation. The U.S. Senate Banking Committee is holding hearings on the bank failures next week. "The challenges facing the (Federal Open Market Committee) today ... take on a particular aura of complexity."

The index of top European banks (.SX7P) was down 1% in early trading, with German banking giants Deutsche Bank (DBKGn.DE) and Commerzbank (CBKG.DE) both falling 0.8%. The rescue of Credit Suisse, which followed the collapses of California-based Silicon Valley Bank (SVB) (SIVB.O) and New York-based Signature Bank (SBNY.O) ignited broader concerns about investors' exposure to a fragile banking sector. The decision to prioritise shareholders over Additional Tier 1 (AT1) bondholders rattled the $275 billion AT1 bond market and some Credit Suisse AT1 bondholders are seeking legal advice. "The AT1 instruments issued by Credit Suisse contractually provide that they will be completely written down in a 'viability event', in particular if extraordinary government support is granted," FINMA said. However, some watchers think the banking system is more vulnerable to rumour and rapid moves in an era of widespread social media use, posing a challenge for regulators trying to tamp down instability.

Currently, the Federal Deposit Insurance Corp (FDIC)guarantees deposits of up to $250,000 per person, per bank. More than $9.2 trillion of U.S. bank deposits were uninsured at the end of last year, accounting for more than 40% of all deposits, according to U.S. central bank data. COULD THE GOVERNMENT RAISE THE DEPOSIT INSURANCE LIMIT? Some U.S. lawmakers have said Congress should consider whether a higher federal insurance limit on bank deposits was needed in the wake of the collapse of SVB and Signature Bank. Senator Elizabeth Warren, a Democrat, and Senator Mike Rounds, a Republican, have questioned whether the $250,000 deposit insurance limit is still appropriate.

Fed Chairman Jerome Powell sought to reassure investors about the soundness of the banking system, saying that the management of Silicon Valley Bank "failed badly," but that the bank's collapse did not indicate wider weaknesses in the banking system. "These are not weaknesses that are running broadly through the banking system," he said, adding that the takeover of Credit Suisse seemed to have been a positive outcome. The Federal Open Market Committee policy statement also said the U.S. banking system is "sound and resilient." The much-anticipated rate cut by the Fed, which had delivered eight previous rate hikes in the past year, sought to balance the risk of rampant inflation with the threat of instability in the banking system. The banking sector has been in turmoil after California regulators on March 10 closed Silicon Valley Bank in the largest U.S. bank failure since the 2008 financial crisis.

The Fed's policy-setting committee raised interest rates by another quarter of a percentage point in a unanimous decision on Wednesday, lifting its benchmark overnight interest rate to the 4.75%-5.00% range. Fed officials still feel that "some additional policy firming" may be needed, and they penciled in one more quarter-of-a-percentage-point rate increase by the end of the year. The yield on the 2-year Treasury note , which is highly sensitive to Fed rate expectations, was down more than 21 basis points in the session. Financial markets went a step further, betting that the Fed won't raise rates any further from here and will be reducing them by this summer. "The Fed has been spooked by Silicon Valley Bank and other banking turmoil.

The latest move to restore calm to restive regional bank stocks came as Pacific Western Bank (PACW.O), one of the regional lenders caught up in the market volatility, said it had raised $1.4 billion from investment firm Atlas SP Partners. While that deal brought some respite to battered banking stocks, First Republic (FRC.N) remains firmly in the spotlight. For now, the rescue of Credit Suisse appears to have calmed the worst fears of systemic contagion, boosting shares of European banks (.SX7P) and U.S. lenders (.SPXBK). Reuters Graphics Reuters Graphics'HEAD IN SAND'The wipeout of Credit Suisse's Additional Tier-1 (AT1) bondholders has sent shockwaves through bank debt markets. Seeking to boost confidence among investors rattled by its $3 billion Credit Suisse rescue, UBS said on Wednesday it would buy back 2.75 billion euros ($2.96 billion) worth of debt it issued less than week ago.

"The bank run has abated for the moment, but that might be contingent on what the Fed signals today," said Adam Button, chief currency analyst at ForexLive in Toronto. "The risk is that the (Federal Open Market Committee) shatters the fragile calm in markets today... by acting too aggressively." The Fed meeting concludes on Wednesday with the 2 p.m. EDT (1800 GMT) release of a policy statement followed half an hour later by a news conference by Powell. Christopher Wong, currency strategist at OCBC, said the focus will be on how the Fed communicates its forward guidance, in particular "the higher for longer" rhetoric. The Japanese yen weakened 0.20% to 132.80 per dollar, while the Australian dollar rose 0.07% to $0.667.

Last year it breached liquidity requirements at some of its entities after an unsubstantiated social media report sparked client exits. In the U.S., the decision to insure all bank deposits after SVB was shuttered surprised many. QUICKLY DISAPPEARSome in the banking industry play down the risks of another SVB-style downfall spurred by social media. Regulators will also need to monitor social media and develop a set of protocols to guide how they respond, according to Patricia McCoy, a law professor at Boston College. "They need to be looking for any signs of unsubstantiated rumors, panic starting to mount on social media, and they've got to do it around the clock," she said.

Two of the Fed's 12 regional bank presidents resigned as a result of that scandal and Powell launched a fast overhaul of the central bank's ethics rules as criticism mounted. Senator Elizabeth Warren, a longtime Powell opponent, saying she had lost confidence as well in San Francisco Fed President Mary Daly, whose bank was responsible for supervising SVB. Still, turbulence in financial markets and the banking system is likely to feature prominently in Powell's post-meeting news conference, which is scheduled to begin at 2:30 p.m. EDT (1830 GMT). The U.S. central bank will release its policy statement and new economic projections from Fed officials at 2 p.m. EDT. Market expectations are tilted heavily towards the Fed approving another quarter-of-a-percentage-point rate increase, which would lift its benchmark overnight interest rate - the federal funds rate - to the 4.75%-5.00% range.

March 22 (Reuters) - Stablecoin USDC's issuer Circle said its chief strategy officer's Twitter account was hacked on Wednesday, after the account posted a link appearing to offer holders of the stablecoin USDC a "one-time bonus" of free cryptocurrency. The Twitter account of Dante Disparte, Circle's chief strategy officer, sent a series of tweets appearing to address the stablecoin's recent move away from its dollar peg. One of the tweets - which is no longer visible - said that Circle "will be distributing a one-time bonus of USDC to all existing holders". "This bonus is our way of thanking you for your continued support and trust in USDC," the tweet said. Circle's official Twitter account said that Disparte's account had been "taken over by a scammer".

With the collapse of Silicon Valley Bank (SIVB.O) and Signature Bank (SBNY.O) and the U.S. government backstopping all deposits at those firms, here is the state of play of deposit insurance in the United States:WHAT IS THE U.S DEPOSIT INSURANCE LIMIT? Currently, the Federal Deposit Insurance Corp (FDIC)guarantees deposits of up to $250,000 per person, per bank. Any losses to the FDIC's deposit insurance fund will be recovered by a special assessment on banks, the FDIC said. COULD THE GOVERNMENT RAISE THE DEPOSIT INSURANCE LIMIT? Senator Elizabeth Warren, a Democrat, and Senator Mike Rounds, a Republican, have questioned whether the $250,000 deposit insurance limit is still appropriate.

"This is all a bit of a mess," Krishna Guha, vice chair of ISI Evercore and a former New York Federal Reserve official, wrote ahead of a Federal Open Market Committee meeting that has veered from a dead-certain jump in interest rates two weeks ago to a speculative morass. The yield on the 2-year Treasury note - particularly sensitive to Fed policy expectations - rose steadily through the day, adding roughly a quarter of a point from the overnight low and approaching 4%. Analysts trying to parse what recent bank stress might mean said a coming credit contraction could be the equivalent of an additional quarter point Fed rate increase, or as much as a recession-inducing 1.5 percentage points, rendering further rate hikes obsolete. "The emergence of financial stress is likely to indicate to the committee that monetary policy is closer to being 'sufficiently restrictive' than some may have thought previously," BOA economists wrote. "At the very least, stress in financial markets suggests that the Fed should proceed with caution."

The influence of Fed rate hikes "is going to hit...That is how it is designed." As of December officials expected the policy rate would rise to around 5.1% by year's end. The experience of 1970s-era central bankers informed not only the extent of the rate increases, with the policy rate rising 4.5 percentage points from near zero as of last March. None of those reforms prevented SVB from funneling its rapidly growing deposits into long-term government bonds that lost value as the Fed raised rates. The Fed has announced a review of its supervision at SVB to see if warning signs were missed.

There is so much money out there," he said, from pandemic spending programs as well as recent federal government initiatives like the Inflation Reduction Act. Is the economy really standing firm against the Fed's aggressive rate moves? Rate increases have averaged more than half a percentage point at each of the eight Fed meetings since March of 2022, and pushed the benchmark overnight interest rate from the near-zero level to the current 4.50%-4.75% range. Reuters Graphics Reuters GraphicsDOGS THAT DIDN'T BARK (YET)Construction: The status of the construction industry shows the Fed's pandemic-era dilemma. The Fed's rate increases have had an impact.

The determination is intact," European Central Bank President Christine Lagarde said in remarks after the policy decision. "There is no tradeoff between price stability and financial stability ... we are addressing the price stability issue by raising the interest rate by 50 basis points ... Beyond the rate increase, the Fed will also be debating changes to its policy statement that could prove consequential. In crafting their next policy statement officials will have to decide, for example, whether to continue to anticipate the need for "ongoing increases" in the policy interest rate, or to temper that seemingly open-ended commitment with language that indicates rate hikes could pause at any moment, given the new risks. They will also be issuing new economic and interest rate projections that could add a further dose of caution.

March 15 (Reuters) - The U.S. consumer finance watchdog launched an inquiry on Wednesday to examine companies that track and collect personal data, requesting public feedback about the business models and practices data brokers use. In one of his first moves as CFPB director in 2021, Rohit Chopra ordered Amazon.com Inc, Apple Inc and Facebook Inc to hand over information about how they gather and use consumer payment data. “Modern data surveillance practices have allowed companies to hover over our digital lives and monetize our most sensitive data,” said CFPB Director Rohit Chopra in a statement. “Our inquiry will inform whether rules under the Fair Credit Reporting Act reflect these market realities.”The CFPB is asking the public to submit information about the types of data brokers collect and the sources they rely upon, as well as people's direct experiences with data brokers, including when they attempt to remove or correct their data. Reporting by Hannah Lang in Washington; Editing by David GregorioOur Standards: The Thomson Reuters Trust Principles.

Yields on Treasury bonds, meanwhile, increased as investors discounted the likelihood that the Fed would shy away from further rate increases. The Fed's preferred measure of inflation is running at almost three times the central bank's target. Important aspects of both reports, however, moved in the favor of a more tempered Fed policy. Wage growth continued to slow in February, and much of the jump in prices last month was driven by the cost of shelter, an area where Fed officials feel inflation will soon prove to be slowing. "The Fed can support liquidity in the banking system and tighten monetary policy at the same time," Sweet said.

Signature was a traditional commercial bank with a wide range of activities and customers,” an NYDFS spokesperson said. The spokesperson added that as withdrawal requests ballooned over the weekend, Signature Bank failed to provide reliable and consistent data. In response to NYDFS' statement, Frank said he was surprised the regulator said the decision to close the bank was not related to cryptocurrency. Signature was a commercial bank with private client offices with nine national business lines including commercial real estate and digital asset banking. The FDIC established a "bridge" successor bank to Signature Bank on Sunday to enable depositors to access their funds.

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