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☆ Yellen warns bank CEOs of ‘severe’ economic consequences if debt ceiling isn’t addressed
▼ + stars: | 2023-05-18 | by ( Matt Egan | ) edition.cnn.com time to read: +2 min

The meeting, which took place in Washington and included JPMorgan Chase CEO Jamie Dimon and Citigroup CEO Jane Fraser, focused in part on the risks on the debt ceiling. Beyond the debt ceiling, Yellen and the Wall Street CEOs discussed the ongoing banking crisis. Yellen also met with mid-size bank CEOsIn addition to huddling with big bank CEOs, Yellen met in Washington on Thursday with executives from mid-size banks, a person familiar with the matter told CNN. Both the debt ceiling and the banking stress came up during Yellen’s meeting with the Mid-Size Bank Coalition of America, an industry trade group, the source said. During the meeting, which took place at the Treasury Department, mid-size bank CEOs expressed acute concern about how the debt ceiling standoff will impact their institutions, the source told CNN.

☆ Sen. Elizabeth Warren presses regulators for answers on First Republic takeover
▼ + stars: | 2023-05-18 | by ( Chelsey Cox | ) www.cnbc.com time to read: +3 min

Sen. Elizabeth Warren, D-Mass., greets Martin Gruenberg, chairman of the Federal Deposit Insurance Corporation, during the Senate Banking, Housing, and Urban Affairs Committee hearing in Dirksen Building on Tuesday, March 28, 2023. WASHINGTON — Sen. Elizabeth Warren is asking federal financial regulators for answers over what she called a "deeply troubling" deal that saw JPMorgan Chase take over First Republic Bank. "Our financial strength, capabilities and business model allowed us to develop a bid to execute the transaction in a way to minimize costs to the Deposit Insurance Fund." Instead, the insurance fund was allowed to take a multibillion-dollar loss after billions of dollars worth of the bank's uninsured deposits were rescued during the deal, Warren said. "The FDIC appeared to prioritize First Republic's uninsured deposits at the bank before the Insurance Fund," she said.

May 17 (Reuters) - Shares of U.S. regional lenders jumped on Wednesday on growing investor confidence that the worst of the banking crisis was likely over, following news of strong deposit growth at Western Alliance Bancorp (WAL.N). Arthur Hogan, chief market strategist at B. Riley Wealth, said Western Alliance's deposit growth disclosure was good news for worried investors. "Western Alliance, one of the most hard-hit banks, came out with a filing showing deposit increase. Western Alliance shares, which are down 41% year-to-date, surged 10% to $34.81, erasing losses recorded over the last two weeks. Other regional lenders closed higher: PacWest Bancorp (PACW.O), whose stock has lost nearly 76% of its value year-to-date, spiked 22%.

☆ First Republic’s Ex-CEO Michael Roffler to Testify in Congress
▼ + stars: | 2023-05-17 | by ( Andrew Ackerman | ) www.wsj.com time to read: 1 min

This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com. https://www.wsj.com/articles/first-republics-ex-ceo-michael-roffler-to-testify-in-congress-8821984

☆ Experian's outlook highlights North America lending woes
▼ + stars: | 2023-05-17 | by ( Eva Mathews | ) www.reuters.com time to read: +2 min

May 17 (Reuters) - Experian Plc's (EXPN.L) annual revenue growth forecast on Wednesday signalled a challenging economic backdrop, especially in North America, where the failure of three U.S. regional banks has hurt confidence in the sector. Experian's key customers include banks, non-traditional lenders and insurance providers, which use its credit reports and scores to analyse and make decisions around credit risk, fraud prevention and lending terms. "Tighter lending conditions (especially in North America) are impacting some of Experian's business lines with more direct volume exposure, including its core credit bureau and marketplace, which together account for about 17% of group revenue," Bank of America analysts said. About 67% of Experian's group revenue comes from the North America region. For the year ended March 31, Experian's organic revenue growth of 7% to $6.59 billion compared with analysts' consensus of $6.64 billion.

☆ First Republic Bank’s Ex-CEO Michael Roffler to Testify in Congress
▼ + stars: | 2023-05-17 | by ( Andrew Ackerman | ) www.wsj.com time to read: 1 min

☆ Ex-First Republic CEO blames contagion for bank's collapse
▼ + stars: | 2023-05-17 | by ( ) www.reuters.com time to read: +1 min

May 16 (Reuters) - The former chief executive of the First Republic Bank Michael Roffler blamed the bank's collapse on the contagion from the failures of other regional banks and said regulators did not express concerns regarding the bank's strategy, liquidity, or management performance. "We could not have anticipated that Silicon Valley Bank and Signature Bank would fail, or that the failure of those banks would trigger substantial deposit outflows at our bank," he said. First Republic's financial position and strategy were regularly reviewed by the California Department of Financial Protection and Innovation (DFPI) and the FDIC, he said. California banking regulators shut down First Republic Bank on May 1 and sold its assets to JPMorgan Chase & Co (JPM.N), in a deal to resolve the largest U.S. bank failure since the 2008 financial crisis and draw a line under lingering banking turmoil. Reporting by Nilutpal Timsina in Bengaluru; Editing by Kim CoghillOur Standards: The Thomson Reuters Trust Principles.

☆ Analysis: Overexposed US regional banks could sell commercial property loans
▼ + stars: | 2023-05-17 | by ( Matt Tracy | ) www.reuters.com time to read: +5 min

Still, previously unreported data from New York-based real estate data provider Trepp, shared with Reuters, show many regional banks' holdings exceed thresholds stipulated by regulators. While big banks have recently warned about CRE exposure, the new Trepp data underscores how acute and widespread the problem is across the banking sector. The regulatory guidance requires that banks exceeding these thresholds "should employ heightened risk management practices," including potential sales of specific loans. Meanwhile, New York Community Bancorp (NYCB.N) and Flagstar Bank [RIC:RIC:FBCANK.UL] were among the top five banks listed by Trepp that exceeded the CRE loan threshold. In Tuesday congressional testimony, FDIC chair Martin Gruenberg warned CRE loan portfolios "face challenges" should market conditions persist.

☆ Here's what analysts are saying after Western Alliance's latest update
▼ + stars: | 2023-05-17 | by ( Brian Evans | ) www.cnbc.com time to read: +2 min

Analysts on Wall Street are optimistic on Western Alliance after the bank's latest deposit update. Shares of Western Alliance popped more than 9% in the premarket. The analyst has a $71 per share price target on Western Alliance, which represents about 125% upside from Tuesday's closing price of $31.59. WAL YTD mountain Western Alliance stock has broken out in recent days, gaining 15% in the last five trading sessions. His price target points to more than 100% upside over the next 12 months.

☆ 3 reasons why regional US banks are in good shape after several failures, and why the stocks could be real bargains, according to a 30-year analyst and portfolio manager who's betting on 5 now
▼ + stars: | 2023-05-17 | by ( Marley Jay | ) www.businessinsider.com time to read: +2 min

Susan Curry is a former analyst and a portfolio manager covering financial firms for Manulife. Bank stocks have been crushed as investors saw several US financial firms fail. Curry says that most banks are in solid financial condition and their stocks look attractive. A 30-year Wall Street veteran, Curry is a former analyst who runs the firm's Capital Appreciation team, is the lead portfolio manager of its Financial Industries strategy, and a portfolio manager of the Bank Opportunities strategy. The leading regional bank positions in the Bank Opportunities Fund that Curry co-manages were M&T Bank, Regions Financial, Citizens Financial, US Bancorp, and KeyCorp.

☆ Opinion | Cable News Viewers Aren’t as Extreme as You Might Think
▼ + stars: | 2023-05-17 | by ( Jessica Grose | ) www.nytimes.com time to read: +3 min

Over email, I asked Kalla whether we know if watching partisan media leads people to vote in a particular direction. It turns out that watching partisan media doesn’t necessarily lead to voting at all. He replied that “‘partisan media only’ viewers are a bit more likely to have voted in the 2018 general election than the ‘entire sample’ but not a massive difference. It bothers me because it feels we’re stuck in a doom loop of Trump coverage that we haven’t figured a way out of since 2015. As they wrote in a Times Opinion essay from 2020, “Most Americans — upwards of 80 percent to 85 percent — follow politics casually or not at all.

☆ Senators Grill Ex-C.E.O. of Silicon Valley Bank
▼ + stars: | 2023-05-16 | by ( ) www.nytimes.com time to read: 1 min

0:58Congressional Leaders Hopeful That Debt Limit Deal Is Possible SoonNOW PLAYINGSenators Grill Ex-C.E.O. of Silicon Valley Bank1:17OpenAI C.E.O. Calls for Government Regulation of Artificial Intelligence1:07Brandon Johnson Is Sworn In as Chicago’s 57th Mayor0:38As House Passes Border Security Bill, McCarthy Blasts White House1:05Santos Does Not Plan to Resign Despite Fraud Charges0:48Biden and McCarthy Address Debt Limit Talks1:13Four Proud Boys Are Convicted of Sedition0:59‘Taxpayers Are Not on the Hook’ for First Republic Collapse, Biden Says1:10Biden Ribs News Media at Correspondents’ Dinner0:40House Republicans Pass Debt Ceiling Bill0:54

Berkshire acquired 9.92 million shares in Capital One, a stake worth $954 million based on the closing price on March 31, regulatory filings showed on Monday. The bank's shares have shed around 15% since early March as the banking crisis has clobbered shares of U.S. regional lenders. Silicon Valley Bank, Signature Bank, and First Republic Bank are the three banks that have so far collapsed during the current crisis. The KBW Regional Banking Index (.KRX) fell 0.38%. Fed Vice Chair for Supervision Michael Barr said the central bank was "carefully considering" rule changes for larger regional banks, including requiring them to account for unrealized losses on their banks when considering capital levels.

☆ OpenAI C.E.O. Calls for Government Regulation of Artificial Intelligence
▼ + stars: | 2023-05-16 | by ( ) www.nytimes.com time to read: 1 min

NOW PLAYINGOpenAI C.E.O. Calls for Government Regulation of Artificial Intelligence1:07Brandon Johnson Is Sworn In as Chicago’s 57th Mayor0:38As House Passes Border Security Bill, McCarthy Blasts White House1:05Santos Does Not Plan to Resign Despite Fraud Charges0:48Biden and McCarthy Address Debt Limit Talks1:13Four Proud Boys Are Convicted of Sedition0:59‘Taxpayers Are Not on the Hook’ for First Republic Collapse, Biden Says1:10Biden Ribs News Media at Correspondents’ Dinner0:40House Republicans Pass Debt Ceiling Bill0:54Montana House Votes to Block Transgender Lawmaker0:49Biden Welcomes South Korean President to White House0:33

☆ Ahead of 2024 bid, DeSantis challenges Trump on abortion limits
▼ + stars: | 2023-05-16 | by ( James Oliphant | ) www.reuters.com time to read: +3 min

WASHINGTON, May 16 (Reuters) - Florida Governor Ron DeSantis said on Tuesday he was proud to have signed a six-week abortion ban, after seeming initially reluctant to embrace the recently passed law in Florida that outlaws almost all abortions in the state. At a news conference on Tuesday, DeSantis said he was “proud” to have signed the legislation and fired back at Trump, who suggested in an interview this week that the six-week ban is overly restrictive. “He will not answer whether he would sign it or not,” said DeSantis, who is a leading contender for the Republican nomination. While DeSantis’ abortion stance could help garner him votes among hard-right conservatives, some Republican donors have expressed unease with his position. In an interview with Reuters last week, Republican donor Andy Sabin said he could not support DeSantis after he signed the abortion law.

☆ Capital One shares up after billionaire investor Buffett's near $1 bln bet on bank
▼ + stars: | 2023-05-16 | by ( ) www.reuters.com time to read: +1 min

May 16 (Reuters) - Shares of Capital One Financial Corp (COF.N) rose in premarket trading on Tuesday after billionaire investor Warren Buffett's holding company disclosed it had taken a stake in the credit cards-focused bank. The bank's stock, which was trading up 7% at $95.37, would open at its highest in more than two weeks, if gains hold. In its quarterly disclosure after the bell on Monday, Berkshire Hathaway (BRKa.N) said it had a 9.92 million share stake in the company. As of Monday, Capital One shares had lost around 8% so far this month, as financial stocks felt the effects of First Republic Bank's collapse. Besides credit cards, the McLean, Virginia-based Capital One also has a huge auto lending and commercial banking business.

☆ Wharton professor Jeremy Siegel says the current credit squeeze is equal to 3 or 4 interest-rate hikes - and urges the Fed to pause its war against inflation
▼ + stars: | 2023-05-16 | by ( Zahra Tayeb | ) www.businessinsider.com time to read: +2 min

Wharton professor Jeremy Siegel said the ongoing credit squeeze is equivalent to three or four Fed rate hikes. Siegel urged the Fed to pause its inflation war given tightening credit conditions and the central bank's lagged economic data. "They're in dangerous territory of precipitating a recession," Siegel said. "I actually think the tightening caused by this crisis is equivalent to three or four 25 basis point hikes of the Fed," Siegel said Monday in a Fox Business interview. The Fed has been persistent in its war against inflation, even though price pressures have showed promising signs of cooling.

☆ Major investors loaded up on regional bank stocks during a turbulent first quarter
▼ + stars: | 2023-05-16 | by ( Yun Li | ) www.cnbc.com time to read: +3 min

Einhorn's Greenlight Capital took small stakes in New York Community Bancorp and First Citizens Bancshares in the first quarter, with each bet worth about $20 million, according to a regulatory filing. New York Community Bancorp's subsidiary, Flagstar, acquired Signature Bank assets after that bank was shuttered , while First Citizens bought a large portion of Silicon Valley Bank assets . New York Community shares are up nearly 20% this year, while First Citizens' stock has jumped more than 68% on the year. 'Big Short' Burry of "Big Short" fame snapped up a slew of regional banks last quarter, including New York Community Bancorp , Capital One Financial , Western Alliance , PacWest Bancorp and Huntington Bancshares during the first quarter. To make matters more confusing, the conglomerate dumped its remaining stakes in Bank of New York Mellon and U.S. Bancorp .

☆ Mohamed El-Erian says regional banks are in a 'hospital' phase of turmoil, but a Fed policy mistake will drive them 'back into the ICU'
▼ + stars: | 2023-05-16 | by ( Carla Mozée | ) www.businessinsider.com time to read: +3 min

The regional banking crisis has shifted out a severe stage, economist Mohamed El-Erian told Bloomberg on Tuesday. But another Fed policy mistake could drive small to mid-sized lenders "back into the ICU." If there's another [Fed] policy mistake, the patient goes back into the ICU," said the chief economic adviser at Allianz. Depositors have yanked hundreds of billions of dollars out of regional lenders collectively this year, including PacWest and First Republic Bank. What would another policy mistake look like to El-Erian?

☆ Ally of Mitch McConnell Wins G.O.P. Primary for Kentucky Governor
▼ + stars: | 2023-05-16 | by ( Nick Corasaniti | ) www.nytimes.com time to read: +1 min

Craft, who belongs to one of the biggest Republican megadonor families in the country, was well behind Mr. Cameron. Republicans have long viewed Mr. Cameron as a potential political star who could join the next generation of the party’s leaders. Mr. Cameron turned to the general election in his victory speech. The party holds supermajorities in the Legislature, making it difficult for the governor to wield much power without a veto. Yet that dynamic has allowed Mr. Beshear to avoid contentious showdowns with Republicans on hot-button issues and has let him focus on using state resources to help repair infrastructure and improve the economy.

NEW YORK, May 16 (Reuters) - JPMorgan Chase & Co (JPM.N) CEO Jamie Dimon said that it is "unlikely" that the bank will acquire any other struggling lender, weeks after it acquired the failed First Republic Bank. Dimon's latest statement comes just two weeks after JPMorgan bought a majority of First Republic Bank's assets in a rescue effort backed by the U.S. government. First Republic was the third major U.S. institution to fail in two months, and JPMorgan agreed to take $173 billion of the bank's loans, $30 billion of securities and $92 billion of deposits. In the shareholder meeting on Tuesday while all management proposals passed, all of the motions submitted by shareholders failed. A shareholder proposal on tweaking rules under which shareholders can call for a special shareholder meeting also got more than 30% of backing.

☆ Jamie Dimon says it's ‘unlikely’ that JPMorgan Chase will acquire another struggling bank
▼ + stars: | 2023-05-16 | by ( Hugh Son | ) www.cnbc.com time to read: +1 min

Jamie Dimon, CEO of JPMorgan Chase, testifies during the Senate Banking, Housing, and Urban Affairs Committee hearing titled Annual Oversight of the Nations Largest Banks, in Hart Building on Sept. 22, 2022. JPMorgan Chase CEO Jamie Dimon said Tuesday that it's not likely his bank would acquire another struggling lender after its government-brokered acquisition of First Republic. "Unlikely," was Dimon's curt response to a shareholder who asked about acquisitions during the New York-based bank's annual shareholder meeting. The turmoil in mid-sized banks sparked by the Silicon Valley Bank collapse in March shows that merely meeting regulatory requirements isn't enough, Dimon added. Dimon spoke on the same day that former Silicon Valley Bank CEO Gregory Becker and two ex-Signature Bank executives testified before the Senate.

Bank of America is jumping back on the Western Alliance Bancorp bandwagon. Analyst Ebrahim H. Poonawala resumed coverage on the bank with a buy rating. Bank of America dropped its rating on the stock as Western Alliance got caught up in the broader regional bank sell-off after the failure of Silicon Valley Bank and Signature Bank — which was then followed by the collapse of First Republic. Western Alliance shares have lost more than 58% over the past three months. WAL 3M mountain Western Alliance shares Poonawala noted that while Western Alliance "is not out of the woods yet," the bank's management has shown "remarkable execution thus far in navigating the post SVB turmoil."

☆ 'Big Short' Michael Burry is long on China's Alibaba and JD.com — these stocks are now a fifth of his portfolio
▼ + stars: | 2023-05-16 | by ( Huileng Tan | ) www.businessinsider.com time to read: +3 min

"Big Short" investor Michael Burry has been accumulating Alibaba and JD.com shares. Scion held $10.2 million worth of Alibaba shares and $11 million worth of JD.com shares as of March 31. "Big Short" investor Michael Burry is long on China's Alibaba and JD.com. Scion Asset Management held 100,000 Alibaba shares worth $10.2 million and 250,000 JD.com shares worth nearly $11 million as of March 31. The hedge fund's holdings in both Chinese tech companies increased from December 31, when it held 50,000 Alibaba shares and 75,000 JD.com shares, according to the regulatory filing.

☆ US economy 'hangs in the balance' as debt limit impasse drag on, Yellen says
▼ + stars: | 2023-05-16 | by ( Andrea Shalal | ) www.reuters.com time to read: +3 min

WASHINGTON, May 16 (Reuters) - The standoff over the federal debt limit is already having dire consequences for the U.S. economy, driving borrowing costs higher and adding to the country's debt burden, U.S. Treasury Secretary Janet Yellen is expected to say in prepared remarks on Tuesday. "The U.S. economy hangs in the balance. Congress should address the debt limit as soon as possible." Yellen said the 2011 crisis - when lawmakers raised the debt limit shortly before the government had to stop making payments - showed the serious repercussions of not acting sooner. Investors had already become more reluctant to hold government debt that matures in early June, and the deadlock was increasing the overall debt burden, she said.

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