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☆ Factbox: Fed, FDIC reviews of US bank failures to spotlight problems, fixes
▼ + stars: | 2023-04-27 | by ( ) www.reuters.com time to read: +6 min

On Friday the banks' regulators - the Federal Reserve and the Federal Deposit Insurance Corporation - will publish their accounts of what happened at both institutions, and propose fixes to prevent a repeat. The FDIC will also publish a separate report on deposit insurance by Monday. Barr has said the Fed's report will include confidential supervisory information, including citations and exam material not typically disclosed. DEPOSIT INSURANCEThe second FDIC report could provide insight into how officials are thinking about the role of deposit insurance, currently capped at $250,000 per depositor, in financial stability. "The most interesting thing I expect to see is what the FDIC recommends about the deposit insurance cap," Phillips said.

☆ Bankers’ pitch to save First Republic: Help us now, or pay more later when it fails
▼ + stars: | 2023-04-26 | by ( Hugh Son | ) www.cnbc.com time to read: +4 min

CNBC's David Faber, who first reported on the rescue plan Tuesday, said that the coming days are crucial for First Republic. But that model broke down in the aftermath of the SVB failure as its wealthy customers quickly pulled uninsured deposits. Other possible, but less-likely moves include converting the big bank's deposits into equity, or even finding a buyer. They also benefited the buyers who were able to cherry-pick the best assets while the FDIC retains underwater bonds, the First Republic advisors noted. "If anything, last night's discouraging update will make it even harder for First Republic to keep what it has."

[1/2] The Federal Deposit Insurance Corp (FDIC) logo is seen at the FDIC headquarters in Washington, February 23, 2011. Here is what is known about the assessment and the insurance fund:What is the Deposit Insurance Fund? The law does not define the "assessment base" for the special assessment or which banks will pay it. Who will pay the special assessment? Top officials in Washington have signaled that regulators likely won't make the smaller banks pay for last month's failures this time round either.

☆ Why so many Americans hate their work hours
▼ + stars: | 2023-04-05 | by ( Ethan Dodd | ) www.businessinsider.com time to read: +8 min

Lower-income workers want to work more, and higher-income workers want to work less. In fact, nearly a quarter of low-income workers making less than $47,000 a year want to work more hours. On the flipside, almost a third of middle- and high-income workers say they work too many hours, according to a Pew Research Center report released Thursday. Workers are left either wanting to work more but can't get the hours, or they want to work less but feel they shouldn't. When surveyed, lower-income workers would likely jump at the opportunity to work more hours to earn more.

☆ FDIC exercises rights in First Citizens, New York Community Bank stocks
▼ + stars: | 2023-03-31 | by ( ) www.reuters.com time to read: +1 min

March 31 (Reuters) - Regulator Federal Deposit Insurance Corporation (FDIC) exercised its equity rights in First Citizens BancShares Inc (FCNCA.O) and New York Community Bancorp Inc (NYCB.N) as part of the deals to rescue failed lenders Silicon Valley Bank and Signature Bank. A spokesperson for the regulator confirmed FDIC also exercised its option to acquire shares of New York Community Bancorp. U.S. regulators said on Monday they would backstop the deal for First Citizens to buy Silicon Valley Bank, triggering an estimated $20 billion hit to a government-run insurance fund. First Citizens did not pay cash upfront for the Silicon Valley Bank deal. New York Community Bank entered into an agreement with regulators to buy deposits and loans from New York-based Signature Bank earlier this month.

☆ Social Security trust funds depletion date moves one year earlier to 2034, Treasury says
▼ + stars: | 2023-03-31 | by ( Lorie Konish | ) www.cnbc.com time to read: +2 min

The Social Security trust funds that about 67 million Americans rely on for benefits are scheduled to be depleted in 2034, one year earlier than was projected last year, according to the annual trustees' report released by the Treasury Department on Friday. Unless Congress takes action, at that time, 80% of scheduled benefits will be payable from the combined funds for old age and survivors insurance and disability insurance. The new depletion date comes as the trustees updated their projections for the U.S. economy to include recent output and inflation. Meanwhile, Medicare's hospital insurance trust fund will be able to pay 100% of scheduled benefits until 2031, three years later than projected last year. The White House earlier this month laid out a plan to extend the solvency of Medicare's hospital insurance trust fund, also known as Medicare Part A, which covers hospital, nursing facility and hospice services for eligible beneficiaries.

☆ The Nasdaq 100 just entered a fresh bull market - and a top analyst says tech names look like the new safety trade
▼ + stars: | 2023-03-31 | by ( Phil Rosen | ) www.businessinsider.com time to read: +6 min

Those rate forecasts have bolstered tech names, and mega-caps like Apple and Microsoft have pulled the Nasdaq higher. "While it sounds like Twilight Zone comment to many investors, tech stocks have become the new safety trade with Big Tech names a major beneficiary of this dynamic," Ives, a managing director and senior equity research analyst at Wedbush, wrote in a note. "And these tech stocks have been under owned and still remain in that camp in our opinion." Short sellers generated paper profit of $14 billion betting against bank stocks over the last month. Shorting bank names in March produced a "wide swath of profitable trades that returned +17.2% in less than a month," S3 Partners said.

☆ Cash-strapped Chinese cities are cutting medical benefits for seniors
▼ + stars: | 2023-03-31 | by ( Laura He | ) edition.cnn.com time to read: +8 min

Censors removed hashtags for “Wuhan health insurance” from Weibo’s hot topics section after the demonstrations began in January. State media reported at the time that some other regions had already spent public money on mass testing. CFOTO/Future Publishing/Getty ImagesCovering the shortfallChina’s health insurance scheme is a key part of its limited social safety net. To protesters, however, it looked like local governments were dipping into their individual accounts to cover the shortfalls of the collective pool. “There has to be some resolution of the financial capacity of local governments to meet current, and prospective, age-related costs,” Magnus said.

☆ Premarket stocks: The FDIC could ask big banks to clean up $23 billion mess
▼ + stars: | 2023-03-31 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +7 min

While regional and mid-sized banks are behind the recent turmoil, it appears that large banks may be footing the bill. Ultimately, that means higher fees for bank customers and lower rates on their savings accounts. The law also gives the FDIC the authority to decide which banks shoulder the brunt of that assessment fee. Passing it on: Regardless of who’s charged, the fees will eventually get passed on to bank customers in the end, said Isaac. In 2021, Wall Street was estimated to be responsible for 16% of all economic activity in the city.

Updating liquidity stress tests to take into account high-speed digital withdrawals, and the ability of social media to spread information among depositors at a much faster pace than ever before. Increasing the frequency of stress tests for mid-sized banks. Several of the proposals the White House endorsed are already under consideration, according to bank regulators who testified this week before two congressional committees. Among these are stricter rules for measuring liquidity in mid-sized banks, those with over $100 billion in combined assets, but under $250 billion. On Wednesday, group of Democratic senators, led by financial regulatory hawk Sen. Elizabeth Warren, D-Mass., sent a letter to bank regulators demanding stronger bank capital requirements.

☆ First Citizens Bank, the buyer of SVB's assets, is run by a billionaire North Carolina family that's bought over 20 failed banks since 2008
▼ + stars: | 2023-03-30 | by ( Carla Mozée | ) www.businessinsider.com time to read: +3 min

First Citizens Bank, the company that bought the assets of SVB, is run by a family with a wealth of experience buying failed banks. Forbes looked at the billionaire family that's guided First Citizens' purchase of more than 20 small banks since 2008. First Citizens will be among the largest 20 banks in the US with the SVB deal. Its purchases of failed banks include First Regional Bank and Temecula Valley Bank in California and Denver-based United Western Bank. Its assets jumped from $109 billion just before the SVB deal and have increased from $16.7 billion at the end of 2008.

☆ The FDIC might make big banks fill the $23 billion hole left by its rescue of SVB and Signature Bank
▼ + stars: | 2023-03-30 | by ( Carla Mozée | ) www.businessinsider.com time to read: +2 min

The FDIC is looking at $23 billion in costs from the SVB and Signature Bank failures. Bloomberg reported the agency may push big banks to shoulder a larger-than-usual share of those costs. The FDIC is under political pressure to spare small banks from filling the hole in the agency's coffers. A special assessment may be applicable to bank behemoths such as JPMorgan Chase, Bank of America, and Wells Fargo. The cost of the bank failures has piled up because the FDIC, the US Treasury, and the Federal Reserve said all depositors at SVB and Signature Bank would fully protected.

☆ FDIC to consider bank size in applying 'special assessment fee'
▼ + stars: | 2023-03-29 | by ( ) www.reuters.com time to read: +2 min

The special assessment fee, which is required by law, will help the FDIC cover losses to its deposit insurance fund from backstopping depositors at Silicon Valley Bank, which collapsed earlier this month. Some banking groups have urged the Biden administration and the FDIC to temporarily guarantee all U.S. bank deposits, a move they say will help quell a crisis of confidence after the failure of Silicon Valley Bank and Signature Bank (SBNY.O). The fall of SVB and Signature, the second- and third-largest bank failures in U.S. history, sent investors scurrying to safe havens like bonds while depositors moved funds to bigger institutions and money market funds. Depositors tried to pull more than $42 billion in a single day at SVB in early March, surprising regulators and kicking off bank runs across other regional banks. Reporting by Jaiveer Shekhawat and Hannah Lang; Editing by Devika SyamnathOur Standards: The Thomson Reuters Trust Principles.

☆ The FDIC’s Sweetheart Bank Deal for SVB
▼ + stars: | 2023-03-28 | by ( The Editorial Board | ) www.wsj.com time to read: 1 min

First Citizens Bank headquarters on March 27 in Raleigh, North Carolina. First Citizens BancShares on Sunday night was the lucky winner of the bidding to buy the assets of Silicon Valley Bank, and what a deal it is. Rather than minimize the cost to the deposit insurance fund as required by law, the Federal Deposit Insurance Corp. seems to have chosen the best political match. North Carolina-based First Citizens will acquire all of SVB’s deposits, loans and branches but leave $90 billion in securities and other assets with the FDIC. First Citizens will buy SVB’s $72 billion in loans at a sizable $16.5 billion discount and share future losses or gains with the FDIC.

Deposits held by small U.S. banks dropped by a record $119 billion to $5.46 trillion after the collapse of Silicon Valley Bank on March 10, according to data released Friday by the Federal Reserve. "We expect stress in the banking system to weigh on credit growth, which will in turn reduce real GDP growth," Goldman Sachs analysts led by chief economist Jan Hatzius wrote in a note, referring to gross domestic product. Tighter credit conditions will exert meaningful pressure on economic activity, but the effect will not be catastrophic unless the situation escalates into "full-blown crisis of confidence," Barclays analysts wrote in a note last week. U.S. regulators announced on Monday they would backstop a deal for regional lender First Citizens BancShares (FCNCA.O) to acquire failed Silicon Valley Bank, triggering an estimated $20 billion hit to a government-run insurance fund. "Banking system stress remains high, but there are some signs of stabilization," Bank of America Corp (BAC.N) analysts wrote in a note.

☆ Here’s why the U.S. had to sweeten terms to get the SVB sale done
▼ + stars: | 2023-03-27 | by ( Hugh Son | ) www.cnbc.com time to read: +3 min

First Citizens BancShares is acquiring $72 billion in SVB assets at a discount of $16.5 billion, or 23%, according to a Sunday release from the Federal Deposit Insurance Corporation. But even after the deal closes, the FDIC remains on the hook to dispose of the majority of remaining SVB assets, about $90 billion, which are being kept in receivership. All told, the SVB failure will cost the FDIC's Deposit Insurance Fund about $20 billion, the agency said. The deal terms may be explained by tepid interest in SVB assets, according to Mark Williams, a former Federal Reserve examiner who lectures on finance at Boston University. The ongoing sales process for First Republic may have cooled interest in SVB assets, according to a person with knowledge of the process.

☆ FDIC coverage limits may be raised above $250,000 again. How experts say you can have more of your deposits insured
▼ + stars: | 2023-03-27 | by ( Lorie Konish | ) www.cnbc.com time to read: +3 min

Experts say there are still ways to gain FDIC coverage even if you are over that $250,000 limit. Citizens Bank of Edmond offers additional coverage, with a limit of $150 million per depositor, through IntraFi Network. "If you're able to use IntraFi, then you don't necessarily have to go to another bank to get another $250,000," Castilla said. Jill Castilla CEO of Citizens Bank of EdmondBecause the bank's average deposit is typically $25,000, Citizens Bank of Edmond does not use the amplified coverage often, Castilla said. Add beneficiaries to your accountAnother way of getting more than $250,000 in coverage for your deposits is to add beneficiaries.

☆ SVB deal helps to steady banks amid credit crunch concerns
▼ + stars: | 2023-03-27 | by ( ) www.reuters.com time to read: +5 min

The sudden collapse of tech-focussed SVB earlier this month destabilised the sector and drew some of Europe's biggest banking names into investors' focus. In March, the Stoxx index of European bank shares .SX7P is down more than 18% and the U.S. KBW regional bank index .KRX has lost 21%, with investors on edge about what's next. In Europe, bank bonds are under pressure and credit default swaps, or the cost of insurance against defaults, uneasily high. First Citizens said it would take on assets of $110 billion, deposits of $56 billion and loans of $72 billion, and expand in California. It will share further potential losses with the FDIC and the FDIC retains some $90 billion in securities held for disposal.

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.

☆ First Citizens buys Silicon Valley Bank
▼ + stars: | 2023-03-27 | by ( Huileng Tan | ) www.businessinsider.com time to read: +2 min

First Citizens BancShares has agreed to buy Silicon Valley Bank. The deal includes the purchase of about $72 billion of Silicon Valley Bridge Bank assets at a discount of $16.5 billion. Silicon Valley Bank was shut by regulators on March 10 after a bank run and capital crisis. Silicon Valley Bank was shut by regulators on March 10 after a bank run and capital crisis. —First Citizens Bank (@firstcitizens) March 27, 2023First Citizens said in a Monday statement the transaction is "structured to preserve First Citizens' solid financial position."

London/Oakland, California CNN —First Citizens Bank is buying most of the business of Silicon Valley Bank, the US tech lender that failed earlier this month. Seventeen former branches of SVB will begin operating as “Silicon Valley Bank, a division of First Citizens Bank,” on Monday, First Citizens said. The FDIC said First Citizens was getting the $72 billion in SVB loans at a discount of $16.5 billion. “The FDIC estimates the cost of the failure of Silicon Valley Bank to its Deposit Insurance Fund to be approximately $20 billion. It had to be rescued a week ago by bigger rival UBS (UBS) in an emergency takeover orchestrated by the Swiss government.

WASHINGTON/NEW YORK, March 25 (Reuters) - The banking crisis set off by the swift collapse of Silicon Valley Bank (SIVB.O) has exposed a sharp disconnect between Washington and Wall Street. Some critics are asking whether the Biden administration could have contained the crisis with aggressive actions at the start. FINDING A BUYER FOR SVBThe failure of the nation's 16th largest bank caught regulators off guard. The banking industry itself is not united on how to reassure depositors. The banking industry is searching for sweeping relief to calm markets, while Washington is discussing how to prevent the next crisis.

WASHINGTON, March 23 (Reuters) - Treasury Secretary Janet Yellen said on Thursday the U.S. Federal Deposit Insurance Corporation's (FDIC) estimate of a $2.5 billion loss related to Signature Bank (SBNY.O) was not a final determination. New York-based Signature Bank closed earlier this month, days after the failure of Silicon Valley Bank (SIVB.O), sending stock markets into turmoil and the banking system into a crisis. On Sunday, a subsidiary of New York Community Bancorp (NYCB.N)entered into an agreement with U.S. regulators to buy deposits and loans from Signature Bank. According to that deal, New York Community Bancorp would purchase deposits, loans and 40 branches from Signature Bank. New York Community Bancorp will purchase $12.9 billion of loans at a discount of $2.7 billion.

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.

Some banking groups have urged the Biden administration and the Federal Deposit Insurance Corp (FDIC) to temporarily guarantee all U.S. bank deposits, a move they say will help quell a crisis of confidence after the failure of Silicon Valley Bank (SIVB.O) and Signature Bank (SBNY.O). "I have not considered or discussed anything having to do with blanket insurance or guarantees of deposits," she said. "The failure of a small bank, of a community bank, could likewise trigger a run on other banks," she said. "To the best of my knowledge, we've never seen deposits flee at the pace that they did from Silicon Valley Bank," Yellen said. Yellen said it was "not obvious" that banks would pass those costs on to bank customers.

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