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☆ San Francisco Fed Ties to S.V.B. Chief Attracts Scrutiny to Century-Old Setup
▼ + stars: | 2023-05-15 | by ( Jeanna Smialek | ) www.nytimes.com time to read: +1 min

The collapse of Silicon Valley Bank has drawn attention to the relationship between the Federal Reserve Bank of San Francisco, which was in charge of overseeing safety and soundness at the lender, and the bank’s former chief executive, Greg Becker, who for years sat on the San Francisco Fed’s board of directors. The bank’s collapse on March 10 has prompted criticism of the Fed, whose bank supervisors were slow to spot and stop problems before Silicon Valley Bank experienced a devastating run that necessitated a sweeping government response. Mr. Becker’s position on the San Francisco Fed board would have given him little formal power, according to current and former Fed employees and officials. The Fed’s 12 reserve banks — semiprivate institutions dotted across the country — each has a nine-person board of directors, three of whom come from the banking industry. Those boards have no say in bank supervision, and serve mainly as advisers for the Fed bank’s leadership.

☆ Stocks week ahead: SVB and Signature Bank execs are set to testify next week
▼ + stars: | 2023-05-14 | by ( Krystal Hur | ) edition.cnn.com time to read: +5 min

The US Senate Committee on Banking, Housing and Urban Affairs is holding three hearings this coming week centered around the collapses of Silicon Valley Bank and Signature Bank in March. ET : Greg Becker, former chief executive, Silicon Valley Bank; Scott Shay, former chairman and co-founder, Signature Bank and Eric Howell, former president, Signature Bank. ET : Mark Bialek, inspector general, Board of Governors of the Federal Reserve System and the Consumer Financial Protection Bureau; Paul Kupiec, senior fellow, American Enterprise Institute and more. Since then, the Federal Reserve and Federal Deposit Insurance Corporation have released reports detailing management missteps at SVB and Signature Bank, as well as federal regulators’ own mistakes in properly addressing red flags preceding the banks’ demises. A separate report from the Federal Reserve Bank of New York on Friday shows that American households are becoming increasingly frugal.

☆ The Week in Business: Trump on TV
▼ + stars: | 2023-05-14 | by ( Marie Solis | ) www.nytimes.com time to read: +4 min

(May 7-13)CNN’s TrumpcastUntil last week, former President Donald J. Trump had not appeared on CNN since 2016. But at a town hall hosted by the network on Wednesday night, Mr. Trump, the Republican front-runner in the 2024 presidential campaign, resumed the lies and name-calling that marked his presidency. Critics of CNN’s forum said it was reckless to give Mr. Trump such a large platform for his message, especially because it proved difficult to fact check his statements in real time. The results came in: Almost 58 percent of the 17.5 million people who voted agreed that Mr. Musk should leave his post. Mr. Musk said Ms. Yaccarino, who recently interviewed him onstage at an advertising event in Miami, would focus on business operations while he would continue to work on product design and technology.

If confirmed, Kugler, a Colombian-American, would be the first Latino to serve on the Fed board, marking the latest effort by Biden to improve the central bank’s diversity. Kugler, who is currently on leave from Georgetown University, previously worked in the Obama administration as the Labor Department’s chief economist. Getty Images/AlamyJefferson, who joined the Fed as a governor a year ago, has been tapped by Biden to the influential role of vice chair, serving as the No. He joined the Fed board in May 2022, after winning broad bipartisan support during his congressional confirmation process. He taught economics at Swarthmore College, Columbia University and the University of Virginia, and served as a high-ranking administrator at Davidson College.

☆ Fed Governor Philip Jefferson named as new vice chair to succeed Lael Brainard
▼ + stars: | 2023-05-12 | by ( Jeff Cox | ) www.cnbc.com time to read: +3 min

Federal Reserve Governor Philip Jefferson will be nominated by President Joe Biden to be vice chairman of the central bank's board, the White House announced Friday. As vice chair, he takes a position last occupied by Lael Brainard, who is now Biden's director of the National Economic Council. Before coming to the Fed, Jefferson was a professor of economics as well as vice president for academic affairs and dean of faculty at Davidson College. The nomination was not unexpected; multiple media outlets had reported that Jefferson was Biden's likely choice as vice chair. If confirmed, Jefferson would be the second Black person to hold the vice chair position.

Aaron Smith, CEO of the National Cannabis Industry Association, speaks during a news conference on the Safe Banking Act outside the U.S. Capitol in Washington, Sept. 14, 2022. The Senate banking committee is holding its first-ever hearing Thursday on a bipartisan bill that would allow the cannabis industry to access traditional banking services, which marijuana businesses see as critical to their survival. The meeting, titled Examining Cannabis Banking Challenges of Small Businesses and Workers, will hear testimony from lawmakers on both sides of the aisle, including Sens. Thursday's hearing will determine next steps in getting the bill to the Senate floor for a vote, as Senate Majority Leader Chuck Schumer and other key lawmakers express support for it. "Without full access to the banking and payments system, legal cannabis businesses are forced to operate in the shadows," said Sen. Sherrod Brown, D-Ohio, who is also chair of the committee.

☆ Former top execs of SVB and Signature Bank will testify at Senate hearing this month
▼ + stars: | 2023-05-03 | by ( Christina Wilkie | In | ) www.cnbc.com time to read: +1 min

People walk by a Manhattan branch of Signature Bank which was closed by bank regulators on Sunday on March 13, 2023 in New York City. WASHINGTON — Former top executives of the failed Silicon Valley Bank and Signature Bank will testify before the Senate on May 16, the chamber's Banking Committee announced late Wednesday. Scott Shay and Eric Howell were the chairman and president, respectively, of New York-based Signature Bank when it collapsed just days after SVB's failure. Former Signature Bank CEO Joseph DePaolo received a similar letter at the time. The former bank executives can expect a grilling from senators on both sides of the aisle.

[1/3] Federal Reserve Board Vice Chair for Supervision Michael Barr and Federal Deposit Insurance Corporation Chairman Martin Gruenberg testify at a House Financial Services Committee hearing on the response to the recent bank failures of Silicon Valley Bank and Signature Bank, on Capitol Hill in Washington, U.S., March 29, 2023. REUTERS/Kevin LamarqueMay 2 (Reuters) - The U.S. Senate Banking Committee said on Tuesday it would hear from former top officials at the failed Silicon Valley Bank and Signature Bank, as well as top U.S. banking regulators at separate hearings later this month. Gregory Becker, the former CEO of Silicon Valley Bank, and Scott Shay and Eric Howell, former senior executives for Signature Bank, will appear on May 16. On Monday, regulators closed a third firm, First Republic, which then was sold to JP Morgan Chase. The panel will also hear from top regulators for the states of New York and California, which helped oversee the two failed firms.

☆ JPMorgan just got a lot bigger — and Elizabeth Warren is alarmed
▼ + stars: | 2023-05-02 | by ( Matt Egan | ) edition.cnn.com time to read: +4 min

Washington, DC CNN —JPMorgan Chase has once again come to the rescue of the banking system by acquiring a doomed bank. By blessing JPMorgan’s takeover of First Republic Bank, Warren fears federal regulators just made the” Too Big to Fail” problem even worse. My view on this is it’s important to look at the effect on competition and to try to keep a more diversified banking system,” Warren said. For his part, JPMorgan CEO Jamie Dimon is hopeful his bank’s takeover of First Republic eases the stress in the banking system. Clawing back banker payIn the wake of the bank failures, Warren is calling for accountability — both of bank executives and regulators.

WASHINGTON, May 1 (Reuters) - JPMorgan Chase & Co's (JPM.N) deal to buy First Republic Bank pushed the Biden administration into a corner, leaving officials scrambling to explain how their stance against mergers squared with allowing the largest U.S. bank to get even bigger. At a White House event on small business on Monday, President Joe Biden hailed the sale of the troubled San Francisco-based lender, saying it would protect all depositors and avert a government bailout. "A poorly supervised bank was snapped up by an even bigger bank — ultimately taxpayers will be on the hook," Warren tweeted. "No recent administration has done more to promote competition, address (the) concentration process across industries," she told a White House briefing. Jean-Pierre added that Biden administration officials valued the fact that community banks offer services to those who might not otherwise have banking access.

☆ White House Close to Tapping Philip Jefferson for Fed Vice Chair, Adriana Kugler for Board
▼ + stars: | 2023-05-01 | by ( Andrew Restuccia | Nick Timiraos | ) www.wsj.com time to read: +1 min

Philip Jefferson has indicated support for the Federal Reserve’s efforts to raise interest rates rapidly to slow the economy and bring down inflation. Photo: Ken Cedeno/Press PoolWASHINGTON—President Biden is close to nominating Federal Reserve governor Philip Jefferson to serve as the central bank’s second-in-command and Adriana Kugler, an economist and top World Bank official, to fill a vacancy on the Fed’s board, according to people familiar with the matter. If confirmed, Ms. Kugler, a Colombian-American economist who now serves as the U.S. executive director at the World Bank, would be the first Latino to serve on the board. Mr. Jefferson would be the Fed’s second Black vice chair. Mr. Biden faced pressure from Sen. Robert Menendez (D., N.J.), a senior member of the Senate Banking Committee, to nominate a Latino economist to the central bank, which has never had a Latino serve as a Fed governor or Fed president.

☆ Lawmakers praise First Republic sale, but efforts to pass new bank rules are fizzling
▼ + stars: | 2023-05-01 | by ( Christina Wilkie | In | ) www.cnbc.com time to read: +3 min

WASHINGTON — Lawmakers who sit atop key banking committees praised the federal takeover of First Republic Bank on Monday, and held up the sale of its assets to JP Morgan Chase as a successful public-private collaboration to protect the U.S. financial system. His statement contrasted from the reaction of the Senate banking committee's chairman, Democratic Sen. Sherrod Brown of Ohio. He did not directly respond to the federal intervention, choosing instead to direct his ire at the failed bank. "First Republic Bank's risky behavior, unique business model, and management failures led to significant problems, and it's clear we need stronger guardrails in place," Brown said in a statement. "We must make large banks more resilient against failure so that we protect financial stability and ensure competition in the long run."

☆ US Fed points finger at Trump-era rollback for SVB demise
▼ + stars: | 2023-04-29 | by ( Douglas Gillison | ) www.reuters.com time to read: +4 min

According to the Fed, SVB's management bore significant blame and bank examiners also made grave missteps. Randal Quarles, who was appointed to the Fed by President Donald Trump in 2017, oversaw the Fed's bank supervision until his resignation in 2021. Patrick McHenry, the Republican chair of the House of Representatives Financial Services Committee, blasted the Fed report as a "thinly veiled attempt" to justify positions like those of Warren. According to the report, the 2018 law caused the Fed to raise the supervisory threshold for large banks, i.e. those smaller than the "global systemically important banks," to $100 billion in assets from $50 billion -- delaying stricter oversight of SVB "by at least three years."

Depositors had pulled $100 billion from accounts at the bank in the panic triggered by the SVB and Signature failures, imperiling its survival. Both SVB and Signature failed last month. Both SVB and Signature grew quickly in recent years, outpacing the ability of regulators to keep up, especially with shrinking resources. Regulators closed Signature two days after SVB was shuttered. Signature lost 20% of its total deposits in a matter of hours on the day that SVB failed, FDIC Chair Martin Gruenberg has said.

Both SVB and Signature failed last month. Regulators shut SVB on March 10, a day after customers withdrew $42 billion and queued requests for another $100 billion the following morning. Both SVB and Signature grew quickly in recent years, outpacing the ability of regulators to keep up, especially with shrinking resources. Regulators closed Signature two days after SVB was shuttered. Signature lost 20% of its total deposits in a matter of hours on the day that SVB failed, FDIC Chair Martin Gruenberg has said.

☆ Lawmakers reintroduce SAFE Banking Act, a bill the cannabis industry hails as a lifeline
▼ + stars: | 2023-04-27 | by ( Stefan Sykes | ) www.cnbc.com time to read: +3 min

Aaron Smith, chief executive officer of the National Cannabis Industry Association, speaks during a news conference on the Safe Banking Act outside the US Capitol in Washington, D.C., US, on Wednesday, Sept. 14, 2022. A group of bipartisan lawmakers reintroduced the Secure and Fair Enforcement (SAFE) Banking Act in the House and Senate on Wednesday, after the legislation designed to free up banking services for the cannabis industry stalled in last year's Congress. "For the first time, we have a path for SAFE Banking to move through the Senate Banking Committee and get a vote on the floor of the Senate," Merkley said in a statement. The bipartisan nature of the SAFE Banking Act's reintroduction appeared to boost hopes of more relief to come in the industry. It is past time that Congress addresses the irrational, unfair, and unsafe prohibition of basic banking services to state-legal cannabis businesses," said Blumenauer, founder and co-chair of the Congressional Cannabis Caucus.

☆ Cannabis stocks light up after a group of lawmakers again seeks to protect banks that work with legal marijuana businesses
▼ + stars: | 2023-04-27 | by ( Carla Mozée | ) www.businessinsider.com time to read: +3 min

Cannabis stocks jumped Thursday as lawmakers sought again to pass a bill to protect banks that work with legal pot firms. The SAFE Banking Act of 2023 was refiled by Democrats and Republicans in the House and Senate. The Secure and Fair Enforcement, or SAFE, Banking Act was refiled late Wednesday by House and Senate lawmakers from both the Democratic and Republican parties. They say the proposal is aimed at dealing with safety concerns stemming from legal cannabis businesses being locked out of banking services. Merkley said there's now a path for the first time for the SAFE Banking Act to move through the Senate Banking Committee and to a Senate floor vote.

☆ China wants the dollar's dominance to fade - and the US should defend its reserve currency status, Biden nominee says
▼ + stars: | 2023-04-19 | by ( George Glover | ) www.businessinsider.com time to read: +3 min

Lawmakers should raise the debt ceiling to defend the greenback's reserve currency status, he says. "I think there's some evidence that it does," he told Tennessee Senator Bill Hagerty, who had asked whether China wants the dollar's dominance as the global reserve currency to fade. "There are extremely important privileges, and even in the realm of security [there are] benefits to having the reserve currency," Bernstein added. "One of the most obvious is of course sanctions — if you control the reserve currency, you are able to impose sanctions as we've done on Russia to considerable effect." Read more: The anti-dollar drive spearheaded by Asia has spread to Europe, with France growing sour on the greenback's dominance.

☆ China wants weaker US dollar as reserve currency, says Biden economist nominee
▼ + stars: | 2023-04-18 | by ( ) www.reuters.com time to read: +3 min

WASHINGTON, April 18 (Reuters) - There was "some evidence" that China wants the dollar to weaken as the international reserve currency, said a White House nominee for a top economist position on Tuesday, and he urged Congress to raise the U.S. debt ceiling to protect the dollar's value. Asked by Republican Senator Bill Haggerty where he stood now, Bernstein said, "I share your view on the importance of the dollar as the dominant reserve currency." He said raising the debt ceiling would help maintain the dollar's reserve currency status and protect its value. The Treasury report criticized China for not publishing foreign exchange intervention and lack of transparency around its exchange-rate mechanism. Weak tax collections in April could mean the U.S. government's deadline to raise the $31.4 trillion debt ceiling will happen sooner than expected, analysts said on Tuesday.

☆ 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.

☆ 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.

“I have argued for years that the biggest banks in the world are still too big to fail. In practice, however, the economic damage would be considerable.”Keller-Sutter was at the center of a government-orchestrated rescue of Credit Suisse by its larger rival UBS (UBS) earlier this month. Global standards for dealing with teetering “too big to fail” banks were key a part of the package of rules introduced after the global financial crisis. They were designed to make it possible to wind down a big bank without destabilizing the financial system or exposing taxpayers to the risk of losses. The rest is lent out at higher interest rates or invested, because that’s how big banks make most of their profit.

“I have argued for years that the biggest banks in the world are still too big to fail. In practice, however, the economic damage would be considerable.”Keller-Sutter was at the center of a government-orchestrated rescue of Credit Suisse by its larger rival UBS (UBS) earlier this month. They were designed to make it possible to wind down a big bank without destabilizing the financial system or exposing taxpayers to the risk of losses. Although some investors in Credit Suisse bonds lost everything, Swiss taxpayers are still on the hook for up to 9 billion Swiss francs ($9.8 billion) of potential losses arising from certain Credit Suisse assets. The rest is lent out at higher interest rates or invested, because that’s how big banks make most of their profit.

☆ Senate Democrats led by Elizabeth Warren press federal bank regulators to implement stronger capital requirements
▼ + stars: | 2023-03-30 | by ( Chelsey Cox | ) www.cnbc.com time to read: +4 min

WASHINGTON — Senate Democrats are pressing federal banking regulators to toughen bank capital requirements following back-to-back congressional hearings where officials testified about the failures of Silicon Valley Bank and Signature Bank. "We write to urge you follow through with establishing strong capital requirements that protect consumers and taxpayers, and preserve the safety and soundness of our banking system," Warren, along with Sens. Under the "stress capital buffer" implemented at the time, the capital requirements for banking firms is determined annually according to supervisory stress tests. The lawmakers urged regulators to enforce strong capital requirements to fend off aggressive lobbying from Wall Street and safeguard against more bank failures. "In order to prevent future bank crises and protect working Americans, I urge your agencies to quickly implement strong capital requirements and resist industry pressure to weaken or delay these requirements."

☆ Dollar rebounds as banking fears fade; yen falls on quarter-end flows
▼ + stars: | 2023-03-29 | by ( Saqib Iqbal Ahmed | ) www.reuters.com time to read: +3 min

NEW YORK, March 29 (Reuters) - The dollar rose against most major peers on Wednesday, reversing some of its recent declines, and gained sharply against the yen, which was volatile as the end of the Japanese fiscal year approaches. Improving risk sentiment and investor hopes that central banks can once again turn their attention toward fighting inflation was helping support the dollar, Given said. The dollar rose to a one-week high against the yen, which remained volatile in the run-up to the end of the Japanese fiscal year on Friday. "A decent amount of USD/JPY flow today is end of quarter related," Monex USA's Given said. The dollar was 1.37% higher at 132.71 yen .

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