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☆ Key lawmakers say upcoming hearings on bank failures aim to boost U.S. confidence in banking sector
▼ + stars: | 2023-03-24 | by ( Chelsey Cox | ) www.cnbc.com time to read: +4 min

WASHINGTON — A bipartisan group of lawmakers overseeing the recent turmoil in the banking sector said Wednesday that they aim to increase Americans' confidence in the banking industry after Silicon Valley Bank and Signature Bank collapsed over the last two weeks. Regulators and lawmakers are also trying to contain further damage to the economy and reinforce confidence in the banking system. Sen. Tim Scott, a South Carolina Republican and ranking member of the Senate Banking Committee, also said writing new laws should take a back seat at the hearings to investigating what happened. We can't legislate that either in the financial sector or among financial institutions management, nor with the regulators." Sen. Sherrod Brown, an Ohio Democrat and chairman of Senate Banking Committee, compared the SVB collapse to the devastating train crash in East Palestine, Ohio.

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.

☆ Banks ramp up use of new Fed facility created during crisis
▼ + stars: | 2023-03-23 | by ( Hugh Son | ) www.cnbc.com time to read: +1 min

American banks deepened their reliance on a new Federal Reserve lending program created after the collapse of Silicon Valley Bank this month. Institutions borrowed $53.7 billion from the Bank Term Funding Program as of Wednesday, up sharply from $11.9 billion last week. Another category of loans made mostly to shuttered banks to meet obligations to depositors and other expenses jumped as well. Meanwhile, banks' use of the discount window, which is the traditional way they borrow from the Fed, dropped this week. The discount window offers market value rather than par value for the securities and provides 90-day loans as compared to the one-year term under the BTFP.

☆ Treasury's Janet Yellen rains on Jay Powell's parade
▼ + stars: | 2023-03-23 | by ( Bob Pisani | ) www.cnbc.com time to read: +3 min

Federal Reserve Chairman Jerome Powell's press conference Wednesday threaded the needle almost perfectly. By the time Powell ended the press conference around 3:15 p.m. Both Yellen and Powell have been at great pains to say that deposits are safe, and by so doing are implying an implicit backstop for deposits. Powell, in his press conference, said "I think depositors should assume that their deposits are safe." But in her testimony Wednesday, Yellen said the Federal Deposit Insurance Corporation (FDIC) was not considering providing "blanket insurance" for all banking deposits.

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.

While big banks have dominated headlines, the country's 4,258 community banks, which are more risk-averse, account for more than 90% of all chartered banks. Her comments marked a shift in emphasis to include community banks that were not mentioned in her earlier testimony. "The community banks in this country, we know, are strong and resilient. Yellen's shift to include community banks "was certainly better, it was an attempt for her to kind of restate what she was saying and acknowledging the importance of the community banks," Williams said. Community banks play an important political role.

"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.

☆ The Fed Tries to Thread the Needle on Interest Rates
▼ + stars: | 2023-03-22 | by ( The Editorial Board | ) www.wsj.com time to read: 1 min

Federal Reserve Chairman Jerome Powell wants you to know the American banking system is safe and he will get inflation under control. If we’re all lucky, maybe both will turn out to be true. That’s the optimistic take, anyway, on what you might call the Fed’s thread-the-needle policy meeting this week. The Federal Open Market Committee (FOMC) pressed ahead Wednesday with a quarter-point increase to the fed funds rate, bringing the target range to 4.75%-5%. The quarterly summary of economic projections by Fed officials released Wednesday still foresees the rate topping out at 5.1% this year, so the rate-rising cycle appears to be one more and done.

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.

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".

☆ All’s fair in love and stablecoins
▼ + stars: | 2023-03-22 | by ( ) www.reuters.com time to read: +2 min

NEW YORK, March 22 (Reuters Breakingviews) - If a stablecoin isn’t first, it’s last, as Circle has learned this month. The company that issues USDC lost its peg to the dollar earlier this month because of worries about the $3.3 billion it held at Silicon Valley Bank. Though Circle recovered the funds from the bank, customers pulled $6 billion from it, according to Bloomberg. Circle Chief Executive Jeremy Allaire, in contrast, does regular rounds in Washington and has argued for regulation. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

[1/4] FILE PHOTO-Austria's foreign minister Alexander Schallenberg speaks during an interview with Reuters in Vienna, Austria, March 16, 2023. REUTERS/Lisa LeutnerSummarySummary Companies Foreign minister says Russia important for Europe'Part of European culture, whether we like it or not'Schallenberg defends Raiffeisen against criticismVIENNA, March 22 (Reuters) - Russia will always remain important for Europe, Austria's foreign minister said, saying that to think otherwise was delusional. Schallenberg said it was for Austria to enforce sanctions and pointed the finger at other Western banks doing business in Russia. "Austrian companies have to stick to Austrian rules, part of which are the European Union sanctions." "There are enough American banks, one with the name Bank of America, present in Russia," said Schallenberg.

☆ Premarket stocks: The banking meltdown may have done the Fed's work for it
▼ + stars: | 2023-03-22 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +7 min

But in a strange twist, it’s possible that the banking meltdown actually did some work for the Fed in bringing down prices without raising interest rates. That could have the equivalent effect of the Fed hiking rates by half a point, said Goldman Sachs economists on Tuesday. Bank stocks rebound as Janet Yellen, Jamie Dimon work to restore confidenceThe collapse of Silicon Valley Bank and Signature Bank rippled through markets last week. The Treasury secretary reiterated that the federal government would be willing to rescue uninsured depositors at small banks if lenders suffer bank runs, raising the specter of contagion. The SPDR Regional Banking Equity Traded Fund, which tracks a number of small and mid-sized bank stocks, gained 5.8% for the day.

☆ Yellen Says U.S. Could Move to Protect Deposits at Other Banks
▼ + stars: | 2023-03-21 | by ( Andrew Duehren | ) www.wsj.com time to read: 1 min

Treasury Secretary Janet Yellen said Tuesday that the federal government could step in to protect depositors at additional banks if regulators see a risk of a run on the banking system. Ms. Yellen delivered remarks at a gathering of the American Bankers Association in Washington as she and other federal officials try to shore up confidence in the U.S. banking sector after the collapse of Silicon Valley Bank and Signature Bank. Ms. Yellen and other federal regulators used emergency powers to guarantee uninsured deposits at SVB and Signature, while also setting up a new Federal Reserve lending program to allow banks to meet withdrawal requests.

(Andrew Kelly/Reuters/FILE)US stocks closed higher on Tuesday as shares of regional banks rebounded from record-breaking losses earlier in the month. Shares of troubled lender First Republic led the way, soaring 30%, making back a large portion of the losses from its 47% plunge in the prior session. The SPDR Regional Banking ETF (KRE), which tracks a number of small and mid-sized bank stocks, gained 5.8% for the day. Investors were also buoyed by news that JPMorgan Chase CEO Jamie Dimon was advising the beleaguered First Republic Bank on next steps and strategy. Wall Street will closely watch the Federal Reserve as the central bank announces its next monetary policy decision on Wednesday afternoon.

☆ Op-ed: ESG investing and 2018 change in bank laws didn't cause Silicon Valley Bank to collapse, says former Sen. Heitkamp
▼ + stars: | 2023-03-21 | by ( Heidi Heitkamp | Former Democratic U.S. Senator North Dakota | ) www.cnbc.com time to read: +6 min

Within hours of the Silicon Valley Bank collapse, political spin machines on both the left and right got cranking. I was one of the Democrats on the Senate Banking Committee who negotiated that legislation, which granted regulatory relief to small community and mid-sized regional banks. Under the burden of increased regulation, smaller institutions and many regional banks were struggling to stay competitive. If all the bank depositors withdrew their deposits on the same day, any bank would fail regardless of liquidity or bank capitalization.) The Fed had the authority to enhance the current level of regional bank supervision, a step the central bank is considering in the wake of the SVB failure.

☆ JPMorgan vs. Bank of America? Analysts say one of the stocks is set to soar 50%
▼ + stars: | 2023-03-21 | by ( Weizhen Tan | ) www.cnbc.com time to read: +5 min

It's not just regional bank shares that have been hit by the recent banking crisis — large-cap bank stocks have also tumbled. JPMorgan was down nearly 6% last week, while Bank of America tumbled 8% over the same period. It said big banks are a "big beneficiary" and fundamentals at JPMorgan Chase, Bank of America, Wells Fargo and Citi look "rather strong." For those looking to invest, CNBC Pro takes a look at what analysts are saying about JPMorgan Chase and Bank of America in particular. However, Bank of America has only 8% of uninsured deposits as a proportion of its total deposit liabilities.

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.

☆ The End of Market Discipline for Banks
▼ + stars: | 2023-03-21 | by ( The Editorial Board | ) www.wsj.com time to read: 1 min

Financial regulators have ignored their post-2008 rule book to contain the latest banking panic. And on Tuesday Treasury Secretary Janet Yellen tore it up by announcing a de facto guarantee of all $17.6 trillion in U.S. bank deposits. Regional bank stocks rallied, but it’s important to understand what this moment means: the end of market discipline in U.S. banking. “Our intervention was necessary to protect the broader U.S. banking system,” Ms. Yellen told the American Bankers Association convention. “And similar actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion.”

☆ Watch Treasury Secretary Janet Yellen speak live to banking conference
▼ + stars: | 2023-03-21 | by ( Jeff Cox | ) www.cnbc.com time to read: +1 min

Treasury Secretary Janet Yellen was scheduled to speak Tuesday morning to the American Bankers Association conference in Washington, D.C. In prepared remarks, Yellen said authorities are prepared to extend unlimited deposit insurance to other banks if necessary. Regulators recently backstopped deposits to failed institutions Silicon Valley Bank and Signature Bank beyond the normal $250,000 Federal Deposit Insurance Corp. limit. "Our intervention was necessary to protect the broader U.S. banking system," Yellen said. "And similar actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion."

☆ Asia Pacific shares join US gains as investors await key Fed decision
▼ + stars: | 2023-03-21 | by ( Juliana Liu | ) edition.cnn.com time to read: +2 min

Hong Kong CNN —Asia Pacific shares opened higher on Wednesday, tracking US gains, as investors awaited the US Federal Reserve’s next monetary policy decision later in the day. Hong Kong’s benchmark Hang Seng (HSI) index was trading 2.3% higher, leading gains in the region. The MSCI Asia Pacific index, which excludes Japanese companies, was broadly higher, rising 0.8%. On Tuesday, US stocks closed higher as shares of regional banks rebounded from record-breaking losses earlier in the month. The SPDR Regional Banking ETF (KRE), which tracks a number of small and mid-sized bank stocks, gained 5.8% for the day.

☆ Janet Yellen: Further rescues of depositors could be needed if smaller lenders suffer bank runs
▼ + stars: | 2023-03-21 | by ( Matt Egan | ) edition.cnn.com time to read: +2 min

New York CNN —The federal government could once again come to the rescue of uninsured bank depositors if smaller lenders suffer bank runs like the one that collapsed Silicon Valley Bank, according to prepared remarks from US Treasury Secretary Janet Yellen. And the US banking system remains sound,” Yellen said in the remarks, to be delivered at the American Bankers Association’s Washington DC Summit on Tuesday. “Our intervention was necessary to protect the broader US banking system. Regional bank stocks have been volatile ever since the bank failures, with some lenders such as First Republic experiencing dramatic declines. The industry-led rescue of First Republic, announced last week by some of the biggest US banks, represents a “vote of confidence in our banking system,” Yellen said.

☆ Treasury Secretary Janet Yellen said the SVB collapse is 'very different' from the 2008 crisis and that the financial system is 'significantly stronger than it was 15 years ago'
▼ + stars: | 2023-03-21 | by ( Juliana Kaplan | Ayelet Sheffey | ) www.businessinsider.com time to read: +4 min

In prepared remarks, Treasury Secretary Janet Yellen said the SVB situation is very different from 2008. "Our financial system is also significantly stronger than it was 15 years ago," she said. Dean Baker, a senior economist at the Center for Economic and Policy Research who predicted the 2008 housing bubble crash, told Insider that "this is not a 2008, 2009 story at all." "To this day I always argue with people, the problem was the housing bubble. "But the real problem was that the housing market was driving the economy — a housing bubble, and it collapsed, and there was no easy replacement for that.

☆ Wall Street ends green on bank bounce as Fed takes focus
▼ + stars: | 2023-03-21 | by ( Stephen Culp | ) www.reuters.com time to read: +5 min

Still, despite its recent resurgence, the S&P Banks index has lost more than 18% of its value just this month. "The Fed will raise interest rates by 25 basis points and the market won't care," Pursche added. Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., March 20, 2023. The S&P 500 posted 5 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 48 new highs and 114 new lows. Volume on U.S. exchanges was 11.75 billion shares, compared with the 12.63 billion average over the last 20 trading days.

☆ Premarket stocks: Silicon Valley Bank left a void that won't easily be filled
▼ + stars: | 2023-03-20 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +7 min

There’s no doubt that the failure of Silicon Valley Bank left a large void in tech. To find out, Before the Bell spoke with Ahmad Thomas, president and CEO of the Silicon Valley Leadership Group. Before the Bell: What’s the feeling on the ground with tech and VC leadership in Silicon Valley? Ahmad Thomas: Silicon Valley Bank has been a key part of our fabric here for four decades. FDIC sells most of failed Signature Bank to FlagstarFrom CNN’s David GoldmanA week after Signature Bank failed, the Federal Deposit Insurance Corporation said it has sold most of its deposits to Flagstar Bank, a subsidiary of New York Community Bank.

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