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☆ Biden nominates Christy Goldsmith Romero to lead FDIC at pivotal time for the banking regulator
▼ + stars: | 2024-06-13 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +3 min

New York CNN —President Joe Biden has nominated Christy Goldsmith Romero as chair of the Federal Deposit Insurance Corporation. Goldsmith Romero, a Democrat, served as special inspector general for the Troubled Asset Relief Program at the Treasury Department that was borne out of the Great Recession. As incoming head of the FDIC, she will largely be viewed as the figure responsible for fixing the longstanding problematic culture at the agency. An independent investigation commissioned by the FDIC released in early May confirmed the Wall Street Journal’s reporting from last year. Gruenberg’s exitUnder pressure from the top-ranking Democrat on the Senate Banking Committee, Sherrod Brown of Ohio, Gruenberg announced he would vacate the position once a new chair is confirmed.

Persons: Joe Biden, Christy Goldsmith Romero, Martin Gruenberg, Goldsmith Romero, Goldsmith Romero “, ”, “, wrongdoers, Sherrod Brown of, Gruenberg, Travis Hill Organizations: New, New York CNN, Federal Deposit Insurance Corporation, Democrat, Troubled Asset, Treasury Department, FDIC, ”, Senate Banking, Republican Locations: New York, ”, Gruenberg’s, Sherrod Brown of Ohio

☆ Jamie Dimon is worried about how much the US is borrowing. Here’s why
▼ + stars: | 2024-05-21 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +9 min

New York CNN —Major business leaders and economists are worried about America’s growing debt problem. Last week, JPMorgan CEO Jamie Dimon expressed fear that a crisis is looming and that unchecked deficit spending could explode. The big picture: Between the Trump-era tax cuts and Covid-era stimulus programs, the national debt has exploded in recent years. Trump Media (DJT) reported a loss of $327.6 million during the first three months of the year, compared with a loss of $210,300 a year earlier. The company generated just $770,500 of revenue, marking the second-straight quarter where its revenue totaled less than $1 million.

Persons: Jamie Dimon, ”, ” Dimon, “, Ray Dalio, Columbia Business School Glenn Hubbard, Joe Biden’s, Jason Thomas, Carlyle, ” Thomas, Hanna Ziady, Liz Truss, Treasuries, Hubbard, Thomas, it’s, Donald Trump, Matt Egan, Devin Nunes, Martin Gruenberg, Elisabeth Buchwald, ” Gruenberg, Sen, Sherrod Brown, Gruenberg, He’s, Cleary Gottlieb Steen, Gruenberg’s, Gruenberg Organizations: CNN Business, Bell, New York CNN —, JPMorgan, Sky News, Financial, Columbia Business School, United, CNN, IMF, Congressional, Office, Peterson Foundation, Treasury, Trump Media, Trump Media & Technology Group, Truth Social, Company, Big Tech, ” Trump Media, Federal Deposit Insurance Corporation, Senate Banking Committee, FDIC, Hamilton Locations: New York, Bridgewater, United States, —, United, United Kingdom

☆ The Chair of the FDIC is facing calls to resign after scathing report. The implications for banks could be significant
▼ + stars: | 2024-05-08 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +4 min

New York CNN —Martin Gruenberg, the chair of the Federal Deposit Insurance Corporation, is facing a barrage of calls from lawmakers to resign after a scathing 234-page report released Tuesday detailed pervasive sexual harassment, discrimination and bullying at the agency. If he heeds the calls, there could be significant ramifications for banks across the country. “We do recognize that, as a number of FDIC employees put it in talking about Chairman Gruenberg, culture ‘starts at the top,’” the report said. Gruenberg’s temperament “may hinder his ability to establish trust and confidence in leading meaningful culture change,” the report added. Aside from Democratic Rep. Bill Foster, Democrats have stopped short of calling on Gruenberg to resign.

Persons: New York CNN — Martin Gruenberg, Cleary Gottlieb Steen, Gruenberg, ‘, ’, “, ” That’s, CNN Gruenberg “, Joe Biden, Bill Foster, That’s, Travis Hill, Rulemaking, ” Dennis Kelleher, Hill, Cowen, Sen, Elizabeth Warren aren’t, Karine Jean, Pierre didn’t, Biden, Kelleher Organizations: New, New York CNN, Federal Deposit Insurance Corporation, Hamilton, FDIC, CNN, Democrat, Democratic Rep, Republican, Senate, Democratic, Better, Federal Reserve, White Locations: New York, Basel

☆ Why do people keep uninsured money in banks?
▼ + stars: | 2024-02-12 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +10 min

Somehow, the same issue plaguing last year’s failed banks is back in focus at the latest bank in crisis: massive loads of uninsured deposits. To be sure, the risk isn’t anywhere close to that of the banks that failed last year: About 94% of domestic deposits at Silicon Valley Bank were uninsured and 90% of Signature Bank’s deposits were uninsured, according to the Federal Reserve. The money is guaranteed by the Federal Deposit Insurance Corporation, which is funded by fees paid by major US banks. About 40% of all money in the US, or $8 trillion, sitting in banks is uninsured, said Lawrence White, a professor at New York University’s Stern School of Business. “It also risks violating the FDIC’s statutory requirement to resolve failed banks and protect insured depositors in the least expensive way possible.”Sometimes, he said, rescuing those uninsured depositors may be the cheapest way to protect insured depositors at banks.

Persons: NYCB, Brian Snyder, James Lee, David Wessel, Lawrence White, University’s, Banks, Ting Shen, ”, Kori Suzuki, JPMorgan Chase, Michael Ohlrogge, Maxine Waters, Elizabeth Warren, “ Organizations: New, New York CNN, New York Community Bancorp, Investors, Silicon Valley Bank, Federal Reserve, Bank, Xinhua, Federal Deposit Insurance Corporation, FDIC, Reuters, Brookings Institution, International Monetary Fund, University’s Stern School of Business, US Treasury, Bloomberg, Getty, Securities and Exchange Commission, Valley Bank, Signature Bank, JPMorgan, Bank of America, Citigroup, First Republic Bank, New York University’s School of Law, Financial Services, Banking Committee, CBS, Bank Coalition of America Locations: New York, Silicon, United States, New, ”, Washington , DC, San Francisco , California, Sen

☆ FDIC Faces More Demands for Evidence of Toxic Culture at Bank Regulator
▼ + stars: | 2023-11-29 | by ( Rebecca Ballhaus | ) www.wsj.com time to read: 1 min

Federal Deposit Insurance Corp. Chairman Martin Gruenberg denied being subject to investigations for inappropriate workplace conduct at a House hearing, but later recanted his testimony, citing a 2008 investigation. Photo: Alex Wong/Getty ImagesPressure on the Federal Deposit Insurance Corp. over allegations of a toxic work environment mounted this week, as the agency’s internal watchdog launched its own inquiry and a Republican senator requested records related to settlements and nondisclosure agreements. The FDIC’s inspector general will examine the “leadership climate at the FDIC with regard to all forms of harassment and inappropriate behavior,” a spokeswoman said. The IG will also assess the agency’s sexual harassment prevention program, including looking at what steps the FDIC has taken since a 2020 IG report found that program was flawed.

Persons: Martin Gruenberg, Alex Wong, ” Organizations: Deposit Insurance Corp, Federal Deposit Insurance Corp, Republican

☆ FDIC Chairman Martin Gruenberg Won’t Oversee Misconduct Probe
▼ + stars: | 2023-11-21 | by ( Rebecca Ballhaus | ) www.wsj.com time to read: 1 min

Martin Gruenberg, the FDIC’s chairman, won’t serve on a special committee that will oversee an independent review the agency’s workplace culture. Photo: Tierney L. Cross/Bloomberg NewsThe Federal Deposit Insurance Corp. board is forming a special committee to oversee an independent review of the agency’s workplace culture, the agency said Tuesday, restricting the ability of the rest of the board—including the chairman—to influence the investigation. The special committee, created by a unanimous vote of the board, will be led by Republican Jonathan McKernan, who was confirmed to the board by the Senate late last year, and Democrat Michael Hsu, who has served as acting comptroller of the currency and an FDIC board member since 2021.

Persons: Martin Gruenberg, won’t, Tierney L, —, Republican Jonathan McKernan, Michael Hsu Organizations: Bloomberg, Federal Deposit Insurance Corp, Republican, Senate

☆ FDIC Chair, Known for Temper, Ignored Bad Behavior in Workplace
▼ + stars: | 2023-11-16 | by ( Rebecca Ballhaus | ) www.wsj.com time to read: 1 min

In 2019, the FDIC’s No. 2 legal official left a ranting, cursing voicemail for an employee criticizing her work. The federal bank regulator paid that employee a $100,000 settlement because of it, former officials said. The legal official kept his job. Last year, Chairman Martin Gruenberg promoted him to become the federal agency’s general counsel.

Persons: Martin Gruenberg

☆ FDIC says supervisors could have been more aggressive before First Republic's failure
▼ + stars: | 2023-09-08 | by ( Pete Schroeder | ) www.reuters.com time to read: +2 min

FILE PHOTO: A person walks past a First Republic Bank branch in Midtown Manhattan in New York City, New York, U.S., March 13, 2023. However, it added bank supervisors were too “generous” in gauging some of its risks, notably around interest rates and a high level of uninsured deposits. First Republic’s collapse, which saw the bank seized by regulators and most of its assets sold to JPMorgan Chase, was the second largest bank failure in American history. It however said the bank likely would have been more resilient to the spreading panic had supervisors criticized bank management practices sooner. The FDIC ultimately found that its supervision team was timely in examining First Republic and producing its findings.

Persons: Mike Segar, JPMorgan Chase, “ Organizations: WASHINGTON, Republic, First, First Republic Bank, REUTERS, Deposit Insurance Corporation, Silicon Valley Bank, JPMorgan, FDIC Locations: U.S, First Republic, Midtown Manhattan, New York City , New York, Silicon, Washington

REUTERS/Kevin Lamarque/File Photo Acquire Licensing RightsWASHINGTON, Aug 29 (Reuters) - A top U.S. banking regulator is set on Tuesday to propose heightened rules to ensure regional banks can be safely dissolved in times of stress. Now, regulators are looking to toughen their rules, particularly for regional banks like PNC Financial Services Group Inc and Citizens Financial Group Inc."The failure of three large regional banks this spring...demonstrated clearly the risk to financial stability that large regional banks can pose," said FDIC Chairman Martin Gruenberg in a speech earlier this month previewing the proposals. The regulator is also set to propose an overhaul to "living will" rules for banks, which require firms to detail how they could be safely taken apart after failing. As banks failed last spring, the FDIC was unable to find immediate buyers for some firms, such as Silicon Valley Bank. The banking industry is already pushing back against the upcoming proposal and similar efforts, calling them unjustified and economically harmful.

Persons: Martin Gruenberg, Kevin Lamarque, Gruenberg, JPMorgan Chase, Ian Katz, ”, Rob Nichols, Pete Schroeder, Megan Davies, Andrea Ricci Organizations: Deposit Insurance, Financial, Valley Bank, Signature Bank, Capitol, REUTERS, Rights, Federal Deposit Insurance Corporation, Financial Services Group Inc, Citizens Financial, Inc, FDIC, Silicon Valley Bank, First Republic Bank, JPMorgan, FDIC’s, Insurance Fund, Capital Alpha Partners, American Bankers Association, Thomson Locations: Washington , U.S, Silicon

☆ US financial regulators green lit new rules aimed at reducing the cost of bank failures
▼ + stars: | 2023-08-29 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +4 min

New York CNN —US financial regulators on Tuesday signed off on new rules to prepare large and regional banks in the case of failure. But the FDIC backed deposits that exceeded that limit when Silicon Valley Bank and Signature Bank failed earlier this year, to reduce the risk of more bank failures. In total, the three bank failures depleted $31.5 billion from the DIF, according to FDIC estimates. Had the proposed rule been in place prior to the three bank failures, it could have prevented many uninsured depositors from causing a bank run, the agencies said. That could make it easier for the FDIC to seize and sell a failed bank, something the agency struggled to do in a timely manner with SVB and Signature Bank.

Persons: Greg Baer, ” Baer, Martin Gruenberg, ” Banks Organizations: New, New York CNN, Federal Deposit Insurance Corporation, Federal Reserve, Currency, FDIC’s, Insurance Fund, Silicon Valley Bank, Signature Bank, Bank, JPMorgan Chase, Bank Policy Institute, FDIC Locations: New York

That special fee, which the FDIC proposed in May, would be assessed based on their uninsured deposits at the end of 2022. The regulator said some banks were "not reporting estimated uninsured deposits in accordance with the instructions." A July 6 report by S&P Global noted 55 banks restated their fourth-quarter uninsured deposits in FDIC reports, more than twice the norm. Specifically, the FDIC reminded banks they must report uninsured deposits backed by pledged assets as well as uninsured deposits held at their own subsidiaries. “Earlier this year, we identified certain internal or intra-bank accounts that shouldn’t have been reported,” Bank of America spokesman Bill Halldin said.

Persons: Zions, Paul Burdiss, Bill Halldin, Bank spokespeople, Niket, Pete Schroeder, Tatiana Bauzer, Shweta Agarwal, Megan Davies Organizations: U.S, Federal Deposit Insurance Corporation, Valley Bank, FDIC, P Global, Bank of America, ” Bank of America, P, Huntington National Bank, Bank, Bank Policy Institute, Thomson Locations: Bengaluru, Washington

☆ What every consumer should know about bank failures
▼ + stars: | 2023-05-01 | by ( Jeanne Sahadi | ) edition.cnn.com time to read: +4 min

New York CNN —Let’s be frank: If you have a US bank account, hearing about bank failures in the past couple of months hasn’t felt great. Here’s what you need to know to keep things in perspective despite the recent closures of First Republic, Silicon Valley Bank and Signature Bank. How do I know my money is safe? How can I know if my bank will fail? The FDIC will issue information within a day or so of taking over a failed bank to let the bank’s customers know what steps if any they need to take and when.

☆ Signature Bank failed because of ‘poor management,’ FDIC report finds
▼ + stars: | 2023-04-28 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +2 min

New York CNN —The collapse of Signature Bank was due to “poor management,” according to a report from the Federal Deposit Insurance Corporation released Friday. Bank management “did not always heed FDIC examiner concerns, and was not always responsive or timely in addressing FDIC supervisory recommendations,” the report said. Contagion effects from Silicon Valley Bank’s failure and Silvergate Bank’s self-liquidation, which occurred just days before Signature Bank was forced to close, helped ignite the run on deposits, the FDIC report stated. In particular, bank management did not fully understand the risks associated with accepting crypto deposits, which comprised more than 20% of its total deposits, the FDIC report said. The FDIC led the investigation into Signature Bank, a New York state-charted bank, since it was the primary regulator.

☆ First Republic could make failure safe again
▼ + stars: | 2023-04-27 | by ( John Foley | ) www.reuters.com time to read: +4 min

NEW YORK, April 27 (Reuters Breakingviews) - When Silicon Valley Bank and Signature Bank failed in March, U.S. authorities bailed out their depositors regardless of size. The slower destruction at First Republic Bank (FRC.N) could provide an opportunity to reverse the regrettable precedent. And while it’s never good when a business fails, there’s a potential benefit to letting First Republic go. First Republic had $233 billion of assets at the end of March, and $104 billion of deposits compared with $176 billion at the end of December. Silicon Valley Bank, owned by SVB Financial, was taken into receivership on March 10, while Signature Bank was closed by the Federal Deposit Insurance Corp on March 12.

☆ First Republic Earnings Report to Shed Light on Depth of Bank Crisis
▼ + stars: | 2023-04-23 | by ( Gina Heeb | ) www.wsj.com time to read: 1 min

First Republic Bank caters to customers with high account balances, many with deposits over the FDIC’s $250,000 protection limit. Photo: Thalia Juarez for The Wall Street JournalFirst Republic Bank is scheduled to report first-quarter earnings Monday. The results will give investors insight into the extent of the damage after sharp deposit outflows at the troubled bank. First Republic has been at the center of a crisis of confidence in midsize and smaller U.S. banks spurred by the collapse of several banks in March. Concerns have mounted about other lenders that could face a liquidity crunch similar to the ones that ultimately took down Silicon Valley Bank and Signature Bank.

☆ Warren Buffett wants harsher penalties for top leaders of failed banks
▼ + stars: | 2023-04-12 | by ( Chris Isidore | ) edition.cnn.com time to read: +4 min

New York CNN —Billionaire investor Warren Buffett isn’t worried about the state of the US banking industry — but he would like to see much tougher consequences for top leaders of the banks that fail. In the wake of the failure of Silicon Valley Bank, Buffett reflected on the public’s frustration after the 2008 financial crisis. The FDIC’s move was an extraordinary one, and Buffett said it gives him confidence about the state of the industry. It will be the banks, not US taxpayers, who will have to pay if the costs of bank failures rise, he added. “I do not think I could run the Fed as well as Jay Powell has done,” Buffett said.

☆ Collapse of SVB, Signature Bank Tests the FDIC’s Executive Reserve Corps
▼ + stars: | 2023-04-11 | by ( Candice Choi | Ben Eisen | ) www.wsj.com time to read: 1 min

Tim Mayopoulos was squashed into a middle seat in coach on his flight to San Francisco, the only one available when he booked that afternoon. The Wi-Fi wasn’t working, so he pulled out a notepad to jot down what he would say to employees when he started his new job as chief executive of the failed Silicon Valley Bank the next morning.

☆ How FDIC dropped the ball and picked up the tab
▼ + stars: | 2023-04-04 | by ( John Foley | ) www.reuters.com time to read: +7 min

NEW YORK, April 4 (Reuters Breakingviews) - Bank watchdogs don’t have a crystal ball when it comes to spotting bank runs. The FDIC is one of several agencies that watches over American banks, but it’s the one that picks up the tab when a lender fails. Gruenberg, on the FDIC board since 2005, did not support the rapid phased prototyping data project, fretting that it amounted to outsourcing supervision, according to people familiar with the situation. For all but the biggest banks, the FDIC continues to rely on quarterly snapshots known as “call reports,” and the findings of its on-the-ground inspectors. Reuters GraphicsThe death of the 2020 project – and the fact it didn’t start years sooner – reflect deeper challenges at the FDIC.

☆ 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.

☆ How the banking crisis clipped the Fed's wings
▼ + stars: | 2023-03-22 | by ( Allison Morrow | ) edition.cnn.com time to read: +4 min

The message was clear: Buckle up, America — we are going to keep raising rates and get inflation down, come hell or high water. Silicon Valley Bank collapsed, followed by Signature Bank, stirring fears of a 2008-like financial calamity. “We no longer state that we anticipate that ongoing rate increases will be appropriate to quell inflation,” Powell said. How’d Wall Street take the news? But the mood on Wall Street turned sour in response to both Powell’s comments and remarks from Treasury Secretary Janet Yellen, who was testifying before Congress at the same time.

☆ 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.

☆ Live updates: Credit Suisse-UBS deal and global stock market news
▼ + stars: | 2023-03-20 | by ( Aditi Sangal | ) edition.cnn.com time to read: +1 min

A 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. New York Community Bank bought substantially all of Signature’s deposits and a total of $38.4 billion worth of the company’s assets. That includes $12.9 billion of Signature’s loans, which New York Community Bank purchased at a steep discount — it paid just $2.7 billion for them. New York Community Bank also paid the FDIC stock that could be worth up to $300 million. That’s likely why New York Community Bank was unwilling to take on all of Signature’s assets.

☆ 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.

☆ FDIC sells most of failed Signature Bank to Flagstar
▼ + stars: | 2023-03-19 | by ( David Goldman | ) edition.cnn.com time to read: +1 min

New York CNN —A 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. New York Community Bank bought substantially all of Signature’s deposits and a total of $38.4 billion worth of the company’s assets. That includes $12.9 billion of Signature’s loans, which New York Community Bank purchased at a steep discount -— it paid just $2.7 billion for them. New York Community Bank also paid the FDIC stock that could be worth up to $300 million. That’s likely why New York Community Bank was unwilling to take on all Signature’s assets.

"No one is above the law," Biden said in the statement, "and strengthening accountability is an important deterrent to prevent mismanagement in the future." The current law "limits the administration’s authority to hold executives responsible," he said. Specifically, Biden is asking Congress to give the Federal Depository Insurance Corp greater authority to claw back compensation, "including gains from stock sales – from executives at failed banks like Silicon Valley Bank and Signature Bank," the White House said in a second statement. "The President urges Congress to expand the FDIC’s authorities to expressly cover cases like this" the White House statement said, citing Becker's stock sales. The president is also asking Congress to give the FDIC more authority to ban bank executives from the industry when their banks go into receivership, and to fine bank managers whose banks fail.

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