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☆ Mohamed El-Erian slams Powell's suggestion that the bank turmoil is over – says it could be added to a list of Fed communications that eroded its credibility.
▼ + stars: | 2023-05-04 | by ( Zinya Salfiti | ) www.businessinsider.com time to read: +3 min

Mohamed El-Erian raised doubts about Fed chair Jerome Powell's suggestion that the worst of the banking turmoil is over. PacWest is the latest bank to be hit by uncertainty, with its shares tumbling more than 50% in after-hours trading Wednesday. El-Erian said Powell's remarks may get added to a list of Fed communications that ended up eroding its credibility. It is the latest regional bank to be hit by the turmoil that started with Silicon Valley Bank's collapse in March. It's important the Fed notes that this doesn't mean the banking system as a whole is facing an existential crisis, he added.

☆ Senator Elizabeth Warren seeks information from First Republic's former CEO, Wall Street Journal reports
▼ + stars: | 2023-05-04 | by ( ) www.reuters.com time to read: +1 min

[1/2] A view of the Park Avenue location of the First Republic Bank, in New York City, U.S., March 10, 2023. Senator Elizabeth Warren has written to Michael Roffler, the former chief executive of failed First Republic Bank asking for more information on his and other executives' pay, the Wall Street Journal reported on Thursday. Warren's office did not immediately respond to a Reuters request for comment, while Roffler could not be reached for comment. Regulators seized troubled First Republic Bank and JPMorgan Chase (JPM.N) agreed to buy majority of the lender's assets earlier this week, marking the largest U.S. bank failure since the 2008 financial crisis. Reporting by Niket Nishant in Bengaluru; Editing by Shounak DasguptaOur Standards: The Thomson Reuters Trust Principles.

☆ 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.

☆ 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.

☆ PacWest, Western Alliance hit as US banking concerns widen
▼ + stars: | 2023-05-04 | by ( Medha Singh | ) www.reuters.com time to read: +3 min

PacWest (PACW.O) slumped 37% in premarket trade, after having lost 29% since Monday. Reuters had reported on Wednesday that PacWest was exploring strategic options including a potential sale or capital raising, which the lender confirmed late in the day. Zion Bancorporation (ZION.O), KeyCorp (KEY.N), Valley National Bancorp (VLY.O), Comerica (CMA.N) and First Horizon (FHN.N) dropped between 2% and 6%. The SPDR S&P Regional Banking ETF (KRE.P) shed 2.8%. PacWest Bancorp reported a loss of $1.1 billion attributed to shareholders for the first quarter of the year.

☆ Iran seizes second oil tanker in a week in Gulf, US Navy says
▼ + stars: | 2023-05-03 | by ( ) www.reuters.com time to read: +3 min

DUBAI, May 3 (Reuters) - Iran has seized a second oil tanker in a week on Wednesday in Gulf waters, the U.S. Navy said, the latest escalation in a series of seizures or attacks on commercial vessels in Gulf waters since 2019. In Iran's first response, Tehran's prosecutor announced the oil tanker was seized on a judicial order following a complaint by a plaintiff, the judiciary's Mizan news agency said. The incident comes after Iran on Thursday seized a Marshall Islands-flagged oil tanker in the Gulf of Oman called the Advantage Sweet. The Niovi oil tanker seized on Wednesday had been travelling from Dubai toward the UAE's Fujairah port when it was forced by IRGCN boats to change course towards Iranian territorial waters, the Navy said. Since 2019, there have been a series of attacks on shipping in the strategic Gulf waters at times of tension between the United States and Iran.

☆ After First Republic's rescue, economists predict further pain with a 'new era' of higher inflation
▼ + stars: | 2023-05-03 | by ( Elliot Smith | ) www.cnbc.com time to read: +5 min

Leah Millis | ReutersAfter the rescue of First Republic Bank by JPMorgan Chase over the weekend, leading economists predict a prolonged period of higher interest rates will expose further frailties in the banking sector, potentially compromising the capacity of central banks to rein in inflation. Almost 80% of chief economists surveyed said central banks face "a trade-off between managing inflation and maintaining financial sector stability," while a similar proportion expects central banks to struggle to reach their inflation targets. Yet several leading economists told a panel at the World Economic Forum Growth Summit in Geneva on Tuesday that higher inflation and greater financial instability are here to stay. That means inflation, the impulse of inflation will be higher." She added that it "defies logic" that as the industry tries to pivot rapidly to a higher interest rate environment, there won't be further casualties beyond SVB, Signature, Credit Suisse and First Republic.

☆ This is the banking crisis that doesn't end
▼ + stars: | 2023-05-03 | by ( Dan Defrancesco | ) www.businessinsider.com time to read: +5 min

This is the banking crisis that doesn't end. So, about that banking crisis being over. The ink is barely dry on JPMorgan's agreement with regulators and it seems more regional banks are feeling the pain. Customers of regional banks are starting to ask questions about how safe their local lender is, the Financial Times reports. Here's more on how regional banks are still getting slammed despite JPMorgan's Jamie Dimon calling an end to the bank crisis.

☆ 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.

☆ 'Self-fulfilling prophecy is a risk' in regional bank crisis, Evercore ISI says
▼ + stars: | 2023-05-03 | by ( Jesse Pound | In Jesse-Pound | ) www.cnbc.com time to read: +2 min

Regional bank stocks have fallen sharply this week after the failure and sale of First Republic, with the SPDR S & P Regional Banking ETF (KRE) tumbling 8.9% in just two days, on Monday and Tuesday. KRE 5D mountain Regional bank stocks have fallen after First Republic's failure. But even if the immediate concerns have been put to rest, now the falling bank stocks could create a new round of issues, according to Evercore ISI. ... regional banks' troubles are earnings issues for most, rather than liquidity issues," Pancari said. He added that "select regionals appear oversold," highlighting Fifth Third Bancorp as one of Evercore ISI's favorite mid-sized banks.

HSBC posted a pretax profit of $12.9 billion for the quarter ended March, versus $4.2 billion a year earlier. HSBC said the planned $10 billion sale, originally slated to be completed by the end of this year, will now only likely go through in the first quarter of 2024. HSBC reported deposits fell 0.6% to $1.6 trillion, excluding those it acquired by bailing out the UK arm of failed U.S. lender Silicon Valley Bank and the reclassification of French retail deposits. Despite the surging profit, HSBC did not raise its key performance target of a return on tangible equity of at least 12% from this year onwards, which analysts were anticipating. Reporting by Selena Li ing Kong Kong and Lawrence White in London; Editing by Muralikumar AnantharamanOur Standards: The Thomson Reuters Trust Principles.

☆ Morning Bid: RBA shock hike starts huge week for central banks
▼ + stars: | 2023-05-02 | by ( ) www.reuters.com time to read: +2 min

A look at the day ahead in European and global markets from Asia markets correspondent Kevin Buckland. The Reserve Bank of Australia kicked off a string of major central bank meetings this week by surprising markets with a quarter-point rate hike, when most had been positioned for a pause. The debate among policy makers is whether to opt for another half-point hike or slow to a quarter-point pace. The Fed, meanwhile, is widely expected to hike rates by a final quarter point and then signal a pause. Money markets are still betting on a Fed rate cut before the end of the year.

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.

☆ First Republic's rescue by JPMorgan means the worst of the banking uncertainty is over, Citi CEO says
▼ + stars: | 2023-05-02 | by ( George Glover | ) www.businessinsider.com time to read: +3 min

First Republic's rescue by JPMorgan will put an end to the worst of the banking uncertainty, Citi CEO Jane Fraser says. JPMorgan took over First Republic after customers yanked over $100 billion worth of deposits. Sign up for our newsletter to get the inside scoop on what traders are talking about — delivered daily to your inbox. JPMorgan stepped in to buy First Republic from the Federal Deposit Insurance Corporation (FDIC) on Monday, acquiring close to $92 billion worth of assets as well as certain liabilities. Read more: Why First Republic failed, and what it means for the rest of the banking industry

☆ AOC and Matt Gaetz introduce a bipartisan bill to ban Congress members from trading individual stocks
▼ + stars: | 2023-05-02 | by ( Matthew Fox | ) www.businessinsider.com time to read: +3 min

A bipartisan group of lawmakers introduced a bill that would ban Congress members from trading individual stocks. Nancy Pelosi's husband Paul Pelosi has long been scrutinized for his extensive history of trading stocks. The Bipartisan Restoring Faith in Government Act would prohibit Congress members and their spouses and any dependents from trading individual stocks. The bill would prevent Congressional lawmakers and their spouses and dependents from trading individual stocks. Instead of owning individual stocks, Congress members would be allowed to buy and sell baskets of stocks via mutual funds or ETFs, as well as Treasury securities.

The deal talks went down to the wire, according to two sources familiar with the situation. Four bidders, including JPMorgan, made it to the final rounds of the auction on Sunday night, one of the sources said. The final deal, announced around 3:30 a.m., cements Dimon's reputation as one of Wall Street's most powerful bankers. JPMorgan started a process internally, which looked at various options for First Republic, including an acquisition, according to a source familiar with the matter. The auction dragged out through the night as the FDIC's advisors examined each bid on its merits, a source familiar with the matter said.

☆ Mohamed El-Erian: 4 Unintended Consequences of the First Republic Deal
▼ + stars: | 2023-05-02 | by ( Zinya Salfiti | ) www.businessinsider.com time to read: +3 min

Mohamed El-Erian said JPMorgan's takeover of First Republic could lead to "potential collateral damage". It's another case of US government institutions settling for a "second best" solution, he wrote in a Bloomberg op-ed. El-Erian warned of four unintended consequences from the deal including "a more concentrated banking system" and the risk of deeper credit crunch. Yet the potential collateral damage and the unintended consequences are far from immaterial," El-Erian wrote in an op-ed for Bloomberg on Monday. The chief economic adviser at Allianz warned of four notable unintended consequences for the US financial system, that could emerge from the final outcome of the First Republic narrative.

☆ The Fed is focused on inflation and the banking jitters won't stall its interest-rate increases, Jim Bianco says
▼ + stars: | 2023-05-02 | by ( Zinya Salfiti | ) www.businessinsider.com time to read: +3 min

Trouble with regional banks won't impact the Fed's decision to lift interest rates, Jim Bianco said. The Wall Street analyst thinks the Fed will raise rates this week and probably again next month. 'If [Fed chair Jerome Powell] focuses a lot on inflation, then financial markets could struggle. If he appeases financial markets, he lets inflation go," Bianco told CNBC. "The Fed is focused on inflation, and they're gonna raise rates, and they're gonna leave the door open to raising rates again in June.

☆ CNBC Daily Open: JPMorgan rides to the rescue
▼ + stars: | 2023-05-02 | by ( Yeo Boon Ping | ) www.cnbc.com time to read: +3 min

A posted announcement from the FDIC about the seizure of First Republic Bank and sale to JPMorgan Chase is displayed on a window at a First Republic Bank office on May 01, 2023 in San Francisco, California. This report is from today's CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. In sum: First Republic's failure and takeover by JPMorgan is a big deal (and good one for the biggest bank in the U.S.!) Subscribe here to get this report sent directly to your inbox each morning before markets open.

[1/3] U.S. President Joe Biden delivers remarks during an event marking National Small Business Week, in the Rose Garden of the White House in Washington, U.S., May 1, 2023. REUTERS/Leah Millis/File PhotoWASHINGTON, May 2 (Reuters) - The chief executives of Alphabet Inc's Google (GOOGL.O), Microsoft (MSFT.O), OpenAI and Anthropic will meet with Vice President Kamala Harris and top White House officials to discuss key artificial intelligence (AI) issues on Thursday, said a White House official on Tuesday. Concerns about fast-growing AI technology include privacy violations, bias and worries it could proliferate scams and misinformation. In April, the Biden administration said it was seeking public comments on proposed accountability measures for AI systems, as concerns grow about its impact on national security and education. The meeting will emphasize the importance of driving innovation "with safeguards that mitigate risks and potential harms," the official said.

☆ Wall Street's most important workers you've never thought of
▼ + stars: | 2023-05-02 | by ( Dan Defrancesco | ) www.businessinsider.com time to read: +5 min

And on Wall Street, where the volume of information continues to rise, application design and user interface is taking center stage. User interface and user experience have long been underappreciated in finance, which is ironic considering the public nature of the work. Read more about Citadel X, the $57 billion hedge fund's user experience and interface team. If you're still trying to understand the collapse of yet another regional bank, we've got you covered. The German bank is building out its investment bank as it eyes a potential return of M&A, the Financial Times reports.

☆ US regional bank stocks fall for second day as First Republic failure weighs
▼ + stars: | 2023-05-02 | by ( ) www.reuters.com time to read: +2 min

May 2 (Reuters) - Shares of major U.S. regional banks fell further on Tuesday in the aftermath of the collapse of First Republic Bank (FRC.N), the largest U.S. bank failure since the 2008 financial crisis. Investors are still concerned that the crisis started by the closure of Silicon Valley Bank and Signature Bank in March could engulf other mid-sized lenders. Shares of PacWest Bancorp (PACW.O) tumbled nearly 30%, while Western Alliance Bank (WAL.N) and KeyCorp (KEY.N) fell 21% and 10%, respectively. Some investors are also concerned about the long-term impact of the JPMorgan deal, which risks worsening the "too-big-to-fail" problem regulators have been trying to solve for years. Reporting by Niket Nishant and Jaiveer Singh Shekhawat in Bengaluru; Editing by Subhranshu SahuOur Standards: The Thomson Reuters Trust Principles.

☆ CNBC Daily Open: JPMorgan takes over First Republic
▼ + stars: | 2023-05-02 | by ( Yeo Boon Ping | ) www.cnbc.com time to read: +3 min

A branch of First Republic Bank in New York City, U.S.Markets were remarkably quiet following the second-biggest bank failure in U.S. history. This report is from today's CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open brings investors up to speed on everything they need to know, no matter where they are. Markets were remarkably quiet following the second-biggest bank failure in U.S. history. Subscribe here to get this report sent directly to your inbox each morning before markets open.

☆ The banks are competing with money market funds, not just each other: Wedbush's David Chiaverini
▼ + stars: | 2023-05-02 | by ( ) www.cnbc.com time to read: 1 min

Share Share Article via Facebook Share Article via Twitter Share Article via LinkedIn Share Article via EmailThe banks are competing with money market funds, not just each other: Wedbush's David ChiaveriniDavid Chiaverini, Wedbush Securities managing director, joins 'Closing Bell' to discuss the fallout in regional banks after First Republic's sale to JPMorgan, credit quality issues hurting commercial real estate, and more.

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.

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