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☆ Premarket stocks: This is how the banking crisis ends
▼ + stars: | 2023-05-05 | by ( Julia Horowitz | ) edition.cnn.com time to read: +7 min

London CNN —US regional bank stocks look set to rebound Friday but are still down sharply this week, accentuating fears that federal regulators have not yet contained a crisis in the sector that could shake the financial system. Breaking it down: Wall Street is on the hunt for any signs of vulnerability in the banking system after the high-profile demise of Silicon Valley Bank, Signature Bank and First Republic Bank in a matter of weeks. While authorities stepped in to protect depositors at those banks, investors were left with stocks that were suddenly worthless. “I believe it really only ends after we get some type of government intervention,” Michaud told me. The value of short positions in regional bank stocks reached $15.1 billion in mid-April, up from about $13.7 billion one year ago, according to data from S3 Partners.

May 3 (Reuters) - PacWest Bancorp (PACW.O) is exploring strategic options including a sale or capital raising, a source familiar with the matter said, sending the shares of the bank and several other U.S. regional lenders tumbling in after-market trading. The Phoenix-based regional lender said it was "reaffirming its financial strength as well as its deposit growth guidance in response to recent industry events." PacWest stock has lost almost 90% of its value since the regional banking crisis started on March 8. Zion Bancorp (ZION.O), First Horizon (FHN.N) and Comerica (CMA.N) each slumped more than 7% and the SPDR S&P Regional Banking ETF (KRE.P) dropped 5%. The cost of insuring against further losses in regional U.S. bank stocks stood on Wednesday near a one-month high in options markets.

As each domino falls, the next weakest bank begins to wobble," billionaire investor Bill Ackman wrote in a tweet. PacWest stock has lost almost 90% of its value since the regional banking crisis started on March 8. Zion Bancorporation (ZION.O), Comerica (CMA.N) and First Horizon (FHN.N) each slumped more than 7% and the SPDR S&P Regional Banking ETF (KRE.P) dropped 5%. The cost of insuring against further losses in regional U.S. bank stocks stood on Wednesday near a one-month high in options markets. On Wednesday a source said the lender was looking at options that include a potential sale or capital raise.

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☆ FDIC plans to hit big banks with fees to refill deposit insurance fund - Bloomberg News
▼ + stars: | 2023-05-04 | by ( ) www.reuters.com time to read: +1 min

[1/2] A sign reads “FDIC Insured” on the door of a branch of First Republic Bank in Boston, Massachusetts, U.S., March 13, 2023. REUTERS/Brian Snyder/File PhotoMay 4 (Reuters) - The U.S. Federal Deposit Insurance Corporation is planning to exempt smaller lenders from kicking in extra money to replenish the government's bedrock deposit insurance fund, and instead saddle the biggest banks with much of the bill, Bloomberg News reported on Thursday, citing people familiar with the matter. The FDIC is planning to release a highly anticipated proposal for refilling its deposit insurance fund as soon as next week, the report added. The 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. The regulator estimates the failure of Silicon Valley Bank will cost the deposit insurance fund $20 billion.

☆ PacWest is the latest bank whose future is in question after reports it's weighing a sale sent shares tumbling over 50%
▼ + stars: | 2023-05-04 | by ( Huileng Tan | ) www.businessinsider.com time to read: +2 min

The news sent PacWest's share price down 52.5% to $3.05 apiece in after-hours trade on Wednesday. PacWest Bancorp is the latest regional bank to be hit by uncertainty following media reports it is considering a range of strategic options — including a sale. Wednesday's rout in PacWest shares marked its fifth straight day of stock price slide. The shares had plunged by 26% on Tuesday amid a broad sell-off in regional bank stocks, two days after First Republic Bank failed and was taken over by the Federal Deposit Insurance Corporation. PacWest shares closed 2% lower at $6.42 apiece on Wednesday and are down 72% so far this year.

☆ Americans haven't been this worried about their bank deposits since the 2008 financial crisis
▼ + stars: | 2023-05-04 | by ( Christina Cheddar Berk | ) www.cnbc.com time to read: +1 min

Recent events may be chipping away at confidence in the U.S. financial system, according to the findings of a Gallup survey. Nearly half of the 1,013 adults polled said they were "very worried" (19%) or "moderately worried" (29%) about the safety of the money they had tucked away in a bank or other financial institution, Gallup said. The level of concern expressed in the poll is similar to the findings that Gallup found shortly after the collapse of Lehman Brothers in September, 2008. Still, a December 2008 reading had shown sentiment had already improved from those worst levels as steps were taken to ease the impact of the financial crisis. When the poll was conducted from April 3-25 this year, Signature Bank and Silicon Valley Bank had already failed.

☆ Factbox: PacWest Bancorp, US regional lender in spotlight
▼ + stars: | 2023-05-04 | by ( ) www.reuters.com time to read: +2 min

Here are some details about the bank:* PacWest is a community bank focused on providing business banking and treasury management services to small, middle-market, and venture-backed businesses. PacWest's market value has now fallen to $772 million after its shares tumbled 72% this year. * According to data from the U.S. Federal Reserve, PacWest was the 53rd largest U.S. bank, as of Dec 31. * As of March 31, the lender held total deposits of $28.2 billion and total assets of $44.3 billion. Meanwhile, total insured deposits, which have come into focus since the crisis, were about 75% of total deposits as of May 2.

☆ Nearly half of Americans are nervous about their money in the bank, Gallup survey finds
▼ + stars: | 2023-05-04 | by ( Matt Egan | ) edition.cnn.com time to read: +2 min

CNN —Nearly half of American adults say they are concerned about the safety of the money they keep in banks, according to a Gallup poll released on Thursday. Gallup said 48% of US adults say they are concerned about the money they have in banks and other financial institutions, including 19% who are “very” worried. Another 29% said they are “moderately” worried. Most Republicans (55%) and independents (51%) say they are at least “moderately” worried about their money in the bank, but just 36% of Democrats said so. The Gallup survey found that roughly half of Americans with an annual household income below $100,000 are worried, compared with 40% of those with higher income.

☆ Billionaire investor Bill Ackman warns more banks will fail unless the FDIC insures all deposits
▼ + stars: | 2023-05-04 | by ( George Glover | ) www.businessinsider.com time to read: +2 min

All US regional banks will be under threat unless regulators move to insure all deposits, according to Bill Ackman. "The FDIC's failure to update and expand its insurance regime has hammered more nails in the coffin," he said Wednesday. "The FDIC's failure to update and expand its insurance regime has hammered more nails in the coffin," Ackman said on Twitter Wednesday. Recent turmoil has fueled hundreds of billions of dollars worth of outflows from regional banks to larger institutions, as well as money-market funds. First Republic "would not have failed if the FDIC temporarily guaranteed deposits while a new guarantee regime were created," Ackman said.

☆ Big name investors like Bill Ackman are calling on the FDIC to insure all deposits, but that would only cost banks' customers more, former FDIC chair says
▼ + stars: | 2023-05-04 | by ( Jennifer Sor | ) www.businessinsider.com time to read: +3 min

Big name investors have called for the FDIC to extend coverage to all bank deposits. But that would only cost banks' customers more, the former FDIC chair said. But extending deposit coverage won't be cheap, McWilliams said, as complicated and complex banks will incur a larger cost to insure deposits. It will be the bank, and inevitably that cost will be borne by its customers," she said. Billionaire investor Bill Ackman warned in a tweet on Wednesday that more lenders could soon fail if the FDIC didn't back all bank deposits.

☆ Global issuance of mortgage-backed securities falls to a 23-year low
▼ + stars: | 2023-05-04 | by ( Patturaja Murugaboopathy | ) www.reuters.com time to read: +3 min

May 4 (Reuters) - The issuance of global mortgage-backed securities (MBS) slumped to a 23-year low in the first four months of this year, highlighting the turmoil in the real estate sector as higher mortgage rates hit property sales and refinancing. According to Refinitiv data, global MBS issuance stood at $100 billion in the first four months of this year, the lowest since 2000. Reuters GraphicsThe property sector, often a leading indicator for other economic activity, has seen a slump this year due to a spike in mortgage rates as global central banks increased interest rates to tame inflation. MBS consist of pools of home loans and other real estate debt and typically carry higher yields than U.S. Treasuries. The refinancing of existing mortgages may also be affected, as there may be fewer lenders available to refinance existing loans leading to private lenders and higher rates."

☆ Almost 50% of Americans say they worry about their money being safe with a bank as shares of regional lenders plunge amid deposit outflows
▼ + stars: | 2023-05-04 | by ( Carla Mozée | ) www.businessinsider.com time to read: +3 min

Nearly half of Americans are worried about the safety of their cash in banks and other financial institutions, Gallup said Thursday. But 20% said they were "not worried at all" about their cash, and 30% considered themselves "not too worried." The study was conducted throughout April after Silicon Valley Bank and Signature Bank imploded in March. But its message didn't soothe those trading regional bank stocks on Thursday. Regional bank stocks plunged, with PacWest Bancorp sliding nearly 50% following a Bloomberg report the Beverly Hills-based lender is weighing strategic options, including a breakup or a sale to a larger rival.

☆ Pressure grows for US regulatory intervention as bank rout deepens
▼ + stars: | 2023-05-04 | by ( ) www.reuters.com time to read: +4 min

"Investors are clearly continuing to focus on remaining players that are deemed the weakest," wrote UBS banking analyst Erika Najarian on Thursday. The Federal Deposit Insurance Corp. did not respond to a request for comment. Critics say increasing deposit insurance could encourage risk-taking, and note regulators have fewer tools to rescue banks following the 2008 financial crisis. The latest crisis began in March when runs on Silicon Valley Bank and Signature Bank led to their abrupt closures, leading depositors to move their cash to bigger banks. To stem the contagion, regulators took emergency steps to reimburse all customers at the two banks, while the Fed offered lenders additional liquidity.

☆ The Fed May Be Done Raising Rates. Here’s What It Means for CDs and Savings Accounts
▼ + stars: | 2023-05-03 | by ( ) www.wsj.com time to read: +5 min

So, if you don’t need immediate access to your savings, it may make sense to lock in current interest rates with a CD. And while the pace of price increases remains well above the Fed’s preferred level of 2%, the central bank fears that raising interest rates any more could tip the fragile economy into recession. The likely explanation is that banks expect interest rates to decrease and don’t want to be locked into paying higher rates for extended periods of time. It’s true that if CD rates are, say, 3% a couple of years from now, then a 4.5% yield will look very good. And because falling interest rates tend to drive up bond prices, that’s what they’d likely do.

☆ PacWest explores strategic options amid stock price plunge -source
▼ + stars: | 2023-05-03 | by ( Anirban Sen | ) www.reuters.com time to read: +2 min

The Los Angeles-based lender said in its first-quarter earnings last week that its deposits had stabilized after some customers pulled their money, but investors have continued to sell the bank's shares amid concerns about its future. PacWest shares dropped 58% on the news on Wednesday to $2.88 a share. The stock has lost almost 90% of its value since the regional banking crisis started on March 8. The crisis has led to the Federal Deposit Insurance Corporation taking over regional lenders Silicon Valley Bank, Signature Bank and First Republic Bank and selling them in whole or parts to other banks. Shares of other regional banks also fell after First Republic Bank collapsed last weekend and was sold to JPMorgan Chase & Co (JPM.N).

☆ Loews CEO James Tisch uses a famous Warren Buffett quote to explain the banking fiasco - and warns more lenders may get into trouble.
▼ + stars: | 2023-05-03 | by ( Theron Mohamed | ) www.businessinsider.com time to read: +4 min

Loews CEO James Tisch used a colorful Warren Buffett quote to describe the recent banking chaos. Tisch warned of more turmoil ahead, and urged the Fed to pause its rate hikes for three months. "As Warren Buffett says, 'When the tide goes out, you see who was swimming without a bathing suit,'" Tisch said. If authorities hadn't intervened, they risked a "full-fledged banking catastrophe" and a "massive, uncontrolled bank scare" with huge repercussions, he continued. However, Tisch warned of more trouble ahead.

☆ JPMorgan could be the banking sector’s biggest hero — or biggest risk
▼ + stars: | 2023-05-03 | by ( Krystal Hur | ) edition.cnn.com time to read: +7 min

And as the bank swells in size, so does the potential risk it poses to the nation’s financial system. Some experts say they’re concerned that JPMorgan’s continued intervention during times of crisis has broader implications for the banking sector, the US financial system and its regulation. And with every failed bank that JPMorgan snaps up, the conundrum becomes clearer: JPMorgan is essentially the biggest risk to the financial system — and every time it expands to uphold the sector’s stability, so does its risk to the financial system. It has “that ability once again, to signal to the world that JPMorgan is a fortress, JPMorgan is the ultimate. But recent failures and the missteps that led to them indicate that deep flaws underline the financial system.

☆ PacWest Bank shares fall more than 50% on report that it could be the next regional bank to collapse
▼ + stars: | 2023-05-03 | by ( David Goldman | ) edition.cnn.com time to read: +2 min

“Exploring strategic options” is Wall Street lingo for “please help.” The last bank to announce it was exploring strategic options was First Republic Bank. That regional bank failed Monday, and JPMorgan purchased most of its assets. PacWest Bank did not immediately respond to CNN’s request for comment. PacWest Bank is reportedly considering splitting up the company or trying to raise capital to support itself, Bloomberg reported. Like many other regional banks, the value of PacWest’s loans and bond holdings have crumbled as interest rates have surged.

☆ Premarket stocks: What happens above 5%? The Fed's big risk
▼ + stars: | 2023-05-03 | by ( Julia Horowitz | ) edition.cnn.com time to read: +7 min

However, job openings that month tumbled to their lowest level since May 2021, according to data released Tuesday. The shifting landscape paved the way for the collapse of Silicon Valley Bank in March and First Republic Bank this week. By blessing JPMorgan’s takeover of First Republic Bank, the Democratic US senator fears federal regulators just made the “too big to fail” problem even worse. To the relief of investors and bank customers, the JPMorgan deal protects all of First Republic’s depositors. The decision to invest in food and grocery delivery during the pandemic has become a big advantage for Uber.

☆ S&P cuts First Republic's credit rating, says default a 'virtual certainty'
▼ + stars: | 2023-05-03 | by ( ) www.reuters.com time to read: +1 min

May 2 (Reuters) - S&P Global on Tuesday slashed First Republic Bank's (FRC.N) credit rating deeper into junk territory after California banking regulators seized the U.S. lender and sold its assets. S&P cut its rating to 'CC' from 'B+' and said it expects default to be a "virtual certainty". Since JPMorgan assumed the substantial majority of First Republic's assets, it is most likely that the lender would default on any other senior financial obligations given what would be an insufficient remaining asset base, S&P said. S&P also lowered credit ratings on First Republic's subordinated debt and preferred stock to 'D' from 'B-.' Reporting by Jyoti Narayan in Bengaluru; Editing by Dhanya Ann ThoppilOur Standards: The Thomson Reuters Trust Principles.

☆ Where to get the best returns on your savings when rates are high
▼ + stars: | 2023-05-03 | by ( Jeanne Sahadi | ) edition.cnn.com time to read: +6 min

The average bank savings rate as of April 26 was a paltry 0.24%, according to Bankrate. At some of the biggest banks, savings rates are as low as 0.01%. For the rest of your emergency fund and other savings, you can get a healthy return just by opening an online high-yield savings account at an FDIC insured online bank. As with most bank rates, high-yield rates are variable so can change at any point. Don’t chase yieldAs attractive as many savings rates are today, they are no substitute for the long-term returns you can earn in a diversified investment portfolio of stocks, bonds and other assets.

☆ JPMorgan’s Jamie Dimon Rides to Biden’s Rescue
▼ + stars: | 2023-05-02 | by ( The Editorial Board | ) www.wsj.com time to read: 1 min

Highlights from a Fox Business interview with Jamie Dimon, in which the J.P. Morgan CEO discussed issues surrounding his WSJ op-ed, 'The West Needs America's Leadership.' Image: Zuma Press Composite: Mark KellyJamie Dimon must be smiling at the political irony. The Biden Administration, which claims to hate big banks, signed off Monday on a deal to let Mr. Dimon’s giant JPMorgan Chase get bigger and even more profitable by taking over failing First Republic Bank . JPMorgan won the Federal Deposit Insurance Corp. auction for the San Francisco-based bank, which was seized by regulators early Monday. It appears the FDIC and Treasury overcame their opposition to a merger by one of the country’s biggest banks after their costly ideological indulgence in closing Silicon Valley Bank ( SVB ).

May 1 (Reuters) - Regulators seized First Republic Bank (FRC.N) and sold its assets to JPMorgan Chase & Co (JPM.N) on Monday, in a deal to resolve the largest U.S. bank failure since the 2008 financial crisis and draw a line under a lingering banking turmoil. Shares of JPMorgan rose 2% on Monday, while those of mid-tier banks fell and the KBW Regional Banking Index (.KRX) closed down 2.7%. [1/3] People walk past a First Republic Bank branch in San Francisco, California, U.S. April 28, 2023. "This is not the world financial crisis, this is not the savings and loan crisis. The failed bank's 84 offices in eight states will reopen as branches of JPMorgan Chase Bank from Monday, it added.

[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.

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