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☆ JPMorgan's Dimon says US banking crisis not over, sees long repercussions
▼ + stars: | 2023-04-04 | by ( Tatiana Bautzer | ) www.reuters.com time to read: +3 min

NEW YORK, April 4 (Reuters) - The U.S. banking crisis is ongoing and will have effects for years to come, JPMorgan Chase & Co (JPM.N) CEO Jamie Dimon wrote in a letter to shareholders on Tuesday. "The market's odds of a recession have increased," Dimon wrote. "And while this is nothing like 2008, it is not clear when this current crisis will end. Even so, it is unclear whether the disruptions will slow the consumer spending that drives the U.S. economy, Dimon wrote. Any new regulations in response to the latest turmoil should be "thoughtful," including clearer rules for dealing with failed banks, Dimon wrote.

☆ JPMorgan's Dimon says US banking turmoil not over, sees long repercussions
▼ + stars: | 2023-04-04 | by ( Tatiana Bautzer | ) www.reuters.com time to read: +3 min

And the banking system is under renewed stress after the failure of Silicon Valley Bank and Credit Suisse's rescue by UBS last month. "The market's odds of a recession have increased," Dimon wrote. "And while this is nothing like 2008, it is not clear when this current crisis will end. Even so, it is unclear whether the disruptions will slow the consumer spending that drives the U.S. economy, Dimon wrote. Any new regulations in response to the latest turmoil should be "thoughtful," including clearer rules for dealing with failed banks, Dimon wrote.

☆ Markets are headed for a rally right before a recession 'pounds away at the economy,' JPMorgan Asset Management CIO says
▼ + stars: | 2023-03-31 | by ( Morgan Chittum | ) www.businessinsider.com time to read: +2 min

JPMorgan Asset Management CIO says markets are headed for a "feel good period" before an economic slowdown. Investors should not lean into the fleeting rally next quarter amid a looming recession, JPMorgan's Bob Michele says. "If we've been taught anything this past month, you may see it coming or you may not." "Having been an investor through the financial crisis, and [having looked at] that seminal moment when Bear Stearns and JPMorgan combined...The next quarter was great for markets. "If we've been taught anything this past month, you may see it coming or you may not.

☆ Why so many banks seem to fail on Fridays
▼ + stars: | 2023-03-31 | by ( Allison Morrow | ) edition.cnn.com time to read: +7 min

That’s because when banks fail, they have a tendency to do so on Friday. Friday, March 10, 2023: Silicon Valley Bank seized by regulators, the second biggest bank failure in US history. “That was very unusual.”Similarly, Silicon Valley Bank’s unraveling happened at a head-spinning pace nearly three weeks ago. Skinny cansAnyone else notice how skinny cans are these days? My colleague Nathaniel Meyersohn, a reporter with an eagle eye for retail trends, explains that skinny cans are, in fact, in.

☆ Jamie Dimon is riding to the rescue again. This time, he's poised to come out on top.
▼ + stars: | 2023-03-31 | by ( Carter Johnson | ) www.businessinsider.com time to read: +15 min

Why, then, has Dimon been so willing to swing back into action in the wake of Silicon Valley Bank's collapse? But it's starting to look like JPMorgan — and Dimon — will end up winners no matter how things turn out. In backstopping First Republic, JPMorgan helps a client and a bank that experts say would fit nicely into its business. By saving First Republic, JPMorgan also stands to gain goodwill from Silicon Valley startups, which are customers of the smaller bank. The paper also reported that regulators asked Dimon, Bank of America, and other banks to buy Silicon Valley Bank and pay out depositors over the insured limit.

☆ Bank rescue real estate turns from dowry to downer
▼ + stars: | 2023-03-30 | by ( Aimee Donnellan | ) www.reuters.com time to read: +3 min

Unlike many banks which got into trouble back in 2008, the Swiss lender has flogged much of its prime real estate. In the last financial crisis prime real estate played a big part of bank rescues. When Barclays (BARC.L) bought Lehman Brothers’ U.S. capital markets business in September 2008 the deal included the bankrupt investment bank’s headquarters. Today there is less real estate underpinning bank values. For buyers preparing to rescue embattled banks, real estate has turned from a dowry to a downer.

☆ Explainer: What are credit default swaps and why are they causing trouble for Europe's banks?
▼ + stars: | 2023-03-28 | by ( Amanda Cooper | ) www.reuters.com time to read: +6 min

LONDON, March 28 (Reuters) - Turbulence in Europe's banks following the implosion of 167-year-old Credit Suisse (CSGN.S) and runs on regional banks in the U.S. has focused attention on the role played by credit default swaps in all the turmoil. The moves followed a surge in the cost of insuring Deutsche Bank's debt against default via credit default swaps (CDS) to a more than four-year high last week. Credit default swaps are derivatives that offer insurance against the risk of a bond issuer - such as a company, a bank or a sovereign government - not paying their creditors. The CDS market is worth around $3.8 trillion, according to the International Swaps and Derivatives Association. The CDS market is small relative to equities, foreign exchange or the global bond markets, where there are more than $120 trillion bonds outstanding.

☆ Factbox: The biggest financial crises of the last four decades
▼ + stars: | 2023-03-25 | by ( ) www.reuters.com time to read: +4 min

Fears of banking contagion remain, and investors are worried that global economies will suffer if the effects of higher interest rates torpedo more lenders. Michael Milken had helped popularize the financial instrument, with many using it as a way of funding leveraged buyouts. The country ended up getting external financial support from the International Monetary Fund and a $50 billion bailout from the United States. GLOBAL FINANCIAL CRISIS OF 2008The biggest financial crisis since the Great Depression was rooted in risky loans to shaky borrowers, which started to lose value after central banks raised interest rates in the period leading up to the crisis. EUROPEAN DEBT CRISISSpurred by the 2008 financial crisis, surging debt at some of the major European economies led to a loss of confidence in the region's businesses.

KINSHASA, March 24 (Reuters) - Democratic Republic of Congo's President Felix Tshisekedi has appointed the country's former vice president Jean-Pierre Bemba, who was detained for over 10 years for war crimes, as the country's defence minister in a sweeping government reshuffle. The reshuffle, which was more extensive than observers had predicted, came ahead of an expected presidential election on Dec. 20, in which Tshisekedi is likely to seek a second term. "This a deeply political shuffle," said Jason Stearns, Director of the Congo Research Group and Professor at Canada's Simon Fraser University. Tshisekedi appointed Vital Kamerhe, his former chief of staff who was released from prison in Dec. 2021 following as embezzlement conviction, as economy minister. Bemba, a former rebel leader was arrested in 2008 by the International Criminal Court for war crimes and crimes against humanity committed by his troops in the Central African Republic between 2002 and 2003.

Similarly, the U.S. economy and stock markets tend to outperform during booms and draw in overseas investment that lifts demand for dollars. Surely times of great banking and credit stress should boost the greenback? And now we face a bout of severe banking stress alongside stubbornly high inflation that had almost all major central banks raising interest rates again over the past week despite the pretty clear underlying credit stress. JPMorgan's take on the stressed side of the dollar smile last week pointed out that "the underlying macro-financial pathology that necessitates lower yields is the primary determinant of dollar direction". Clearly, the dollar smile is no laughing matter.

☆ Wall Street is confident high-yielding banks won't cut their dividends
▼ + stars: | 2023-03-22 | by ( Scott Schnipper | ) www.cnbc.com time to read: +5 min

Atlanta's Truist Financial ($41 billion) now yields 6.2% while Minneapolis's U.S. Bancorp ($53 billion) pays 5.1% on its common stock. After all, high dividend yields are often a sign of financial or business distress, or a red flag that the payments so many mom-and-pop investors depend on are unsustainable. Wall Street just doesn't think most payouts will be cut — so long as any recession this year stays on the mild side. "Despite these lower dividend growth expectations, we believe these bank holdings still have attractive dividends," Peris added. A final straw in the wind: Wall Street has issued dozens of research reports since Silicon Valley Bank went under.

☆ Credit Suisse went the way of Bear Stearns in 2008. But this crisis is different
▼ + stars: | 2023-03-21 | by ( Hanna Ziady | ) edition.cnn.com time to read: +9 min

A sign of Credit Suisse pictured behind a sign of UBS in Zurich on March 18, 2023. The Swiss government said Tuesday it had ordered Credit Suisse to temporarily suspend the payment of some bonuses, including share awards, to bank staff. Credit Suisse is the first “global systemically important” bank to be rescued since 2008. Yet despite its importance to the financial system, most analysts are not expecting Credit Suisse’s demise to mark the beginning of another global financial crisis. “It’s possible that a vicious circle develops, in which credit tightens, the real economy deteriorates, and default rates start to rise,” he said.

☆ Credit Suisse bump trade looks over-optimistic
▼ + stars: | 2023-03-20 | by ( ) www.reuters.com time to read: +2 min

NEW YORK, March 20 (Reuters Breakingviews) - Investors in Credit Suisse’s bombed-out stock are getting a little ahead of themselves. At that level, they’re 7% above the implied value of UBS’s offer, and a wider 13% using the lenders’ U.S.-listed shares, which trade until later in the day. That deal, like UBS’s rescue of Credit Suisse, was also a government-arranged attempt to prop up an ailing bank. Unlike Credit Suisse, Bear Stearns’ shareholders got a vote, giving them leverage to argue for a higher price. Credit Suisse shareholders have little left but hope.

☆ On the precipice: How Credit Suisse's day of drama unfolded
▼ + stars: | 2023-03-16 | by ( ) www.reuters.com time to read: +5 min

Fifteen years later, Credit Suisse Group AG found itself on a similar precipice. By the time traders in New York were switching on screens on Wednesday, Credit Suisse had lost more than a fifth of its value. Credit Suisse did not comment for this story but noted recent interviews given by its CEO saying the bank was strong. STILL SMOLDERINGMarkets seemed to calm, but the fresh drama around Credit Suisse jogged memories that the financial system was not out of the woods yet. "We welcome the statement of support," Credit Suisse said.

☆ While Yellen Assures, Banks Run
▼ + stars: | 2023-03-16 | by ( The Editorial Board | ) www.wsj.com time to read: 1 min

Janet Yellen offered more assurances Thursday that U.S. banks are safe and sound—and we doubt even the Treasury Secretary believes it. Certainly no one else does. The biggest American banks had to commit $30 billion on Thursday to rescue First Republic Bank—15 years to the day since Bear Stearns’s collapse. The San Francisco-based bank’s shares have lost 70% since last Wednesday, and its credit rating has been downgraded to junk. First Republic investors and depositors haven’t been soothed by the Federal Deposit Insurance Corp.’s guarantee of uninsured deposits at Silicon Valley ( SVB ) and Signature banks, or the Federal Reserve’s new emergency lending facility.

☆ First Republic just got a $30 billion lifeline from JPMorgan and other Wall Street giants. Here's why its problems aren't over.
▼ + stars: | 2023-03-16 | by ( Hayley Cuccinello | ) www.businessinsider.com time to read: +5 min

JPMorgan and 10 other banks are depositing $30 billion in First Republic Bank. A white knight has arrived to First Republic Bank's rescue. A consortium of America's biggest banks including JPMorgan Chase, Morgan Stanley, and Goldman Sachs are depositing a collective $30 billion in First Republic. This $30 billion lifeline may not be enough to reassure investors and depositors, and it may be a stopgap measure before a sale. The $70 billion lifeline from JPMorgan announced on Sunday did little to quell investors' concerns, Dahiya noted.

March 16 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever. There's no doubting it now - Credit Suisse has made the banking crisis global and, in classic financial crisis mode, investors are rushing for the global safe havens of the U.S. dollar, U.S. Treasuries and Japanese yen. Indeed, the most important driver for Asian markets on Thursday may come from Frankfurt. A cynic might point out that the ECB has form for failing to grasp the enormity of an unfolding financial crisis and raising interest rates. Debate is intensifying on the roots of the banking crisis - solvency, liquidity or asset quality?

☆ SVB proves even smaller banks are too big to fail
▼ + stars: | 2023-03-15 | by ( Peter Thal Larsen | ) www.reuters.com time to read: +5 min

Yet last weekend U.S. authorities struggled to contain the fallout from the collapse of SVB Financial (SIVB.O), a relatively simple institution about half the size of the defunct Wall Street firm. After 2008, global regulators designed elaborate rules to make banks safer, and to limit the economic impact if they failed. The result was that when SVB failed, it had no additional buffer, leaving uninsured depositors potentially on the hook for losses that exceeded its capital. Five days after SVB failed, no buyer has yet come forward. It’s a timely reminder that even smaller banks can be too big to fail.

☆ Fed’s Magical Accounting Might Save Banks but Doom Rate Increases
▼ + stars: | 2023-03-14 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

A trader on the floor of the New York Stock Exchange. Bank shares were down Monday in the aftermath of the collapse of Silicon Valley Bank. Just two days before the 15th anniversary of the Federal Reserve-backed rescue of Bear Stearns, the central bank is offering easy money to banks to stop an incipient run on the sector. The immediate question is whether it will succeed. The secondary questions for investors are whether this marks the end of the rapid rate rises that trashed markets last year, and what lessons can be learned.

☆ History of financial shocks shows this banking tumult could be a buying opportunity
▼ + stars: | 2023-03-14 | by ( Samantha Subin | ) www.cnbc.com time to read: +2 min

If history is any guide, financial events like the collapse of Silicon Valley Bank could present an attractive buying opportunity for investors in the months ahead. Data compiled by Deutsche Bank macro strategist Alan Ruskin tracking several major financial events in recent history shows that the S & P 500 has gained a median of 19% a year after those incidents. While the fallout from SVB's failure could present more problems than many recent financial events, the aftershocks should fall short of the havoc wreaked in the wake of 2008's financial crisis, he wrote in a Tuesday note. Despite the wreckage the failures brought to financial markets — and regional banking stocks — history shows that these incidents could present a good buying opportunity for investors, with interest rates typically declining in their wake. Aside from the 1987 stock market crash and 1994 Orange County bankruptcy, history also shows that these incidents can also result in good news for rates.

☆ Fed’s Magical Accounting Might Save Banks But Doom Rate Increases
▼ + stars: | 2023-03-13 | by ( James Mackintosh | ) www.wsj.com time to read: 1 min

Responding to SVB’s failure, the central bank promised to make available additional liquidity to banks and other deposit-taking institutions. By reassuring depositors, the central bank aims to prevent runs on other institutions and contagion through the financial system. And by promising to buy high-quality assets at face value, the central bank is trying to forestall a fire sale that could depress valuations and become self-reinforcing. POLICY AND SUPERVISIONThe central bank’s intervention has highlighted the complex interaction between monetary policy and bank supervision. But given the spillovers between monetary policy and supervision, the offer of additional liquidity is probably not enough to insulate monetary policy from financial stability considerations.

☆ 3 Failed Banks This Year Were Bigger Than 25 That Crumbled in 2008
▼ + stars: | 2023-03-11 | by ( Karl Russell | Christine Zhang | ) www.nytimes.com time to read: +6 min

The three banks that failed this year were worth more in inflation-adjusted assets than the 25 that collapsed in 2008. Before Silicon Valley Bank, the last bank to fail was in late 2020, as the coronavirus was ravaging the country. First Republic Bank ranks 14th, Silicon Valley Bank ranks 16th and Signature Bank ranks 29th. Silicon Valley Bank’s chief executive, Greg Becker, was a strong supporter of the move. In a review of the Fed’s oversight of Silicon Valley Bank released on Friday, Michael S. Barr, the central bank’s vice chair for supervision, said the Fed would “re-evaluate” its rules for banks that were similar in size to Silicon Valley Bank.

☆ Who will step up to buy SVB? The white knight might be a bank outside Wall Street.
▼ + stars: | 2023-03-11 | by ( Hayley Cuccinello | ) www.businessinsider.com time to read: +5 min

SVB Bank, which catered to startups and tech founders, imploded in three days after a run on the bank. SVB Financial is reportedly looking to find a buyer by Monday. The implosion of Silicon Valley Bank means a working weekend for some bankers. SVB Financial Group is on the hunt for a buyer after regulators closed its Silicon Valley Banking business, according to Bloomberg. Though SVB's bond losses are taking up the headlines, its parent company SVB Financial has two business segments that are enticing.

☆ Takeaways from America’s second-largest bank failure
▼ + stars: | 2023-03-11 | by ( Ramishah Maruf | ) edition.cnn.com time to read: +7 min

New York CNN —Silicon Valley Bank’s 48-hour collapse led to the second-largest failure of a financial institution in US history. Its stunning, and seemingly rapid, fall is the largest shutdown of a US bank since Washington Mutual in 2008. “That’s because its depositors were withdrawing their money so fast that the bank was insolvent, and an intraday closure was unavoidable due to a classic bank run.”High interest rates led to its demiseTo combat rampant inflation, the central bank has been aggressively raising interest rates since 2022. When interest rates were near historical lows, the banks bought up on long-dated, seemingly low-risk Treasuries. Faced with these higher interest rates, loss of IPOs and a funding drought, SVB’s clients began pulling money out of the bank.

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