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☆ Bank CEOs to huddle with Schumer on the debt ceilin
▼ + stars: | 2023-05-17 | by ( Matt Egan | ) edition.cnn.com time to read: +1 min

During Wednesday’s meeting, Schumer plans to raise the threat of default with the bank leaders, one of the sources told CNN. After leaving a Tuesday meeting at the White House with congressional leaders, Schumer said, “Default is disaster. Given that the trade group’s board includes regional bank CEOs, other issues including the banking crisis are likely to be discussed during Wednesday’s meeting. In addition to Schumer, bank CEOs are expected to meet with other lawmakers and officials. The meetings come as the White House and congressional Republicans struggle to reach a compromise on how to avoid the debt ceiling and avoid what economists warn would be a disastrous debt default.

☆ Yellen to meet with Jamie Dimon and other bank CEOs on Thursday as debt ceiling crisis looms
▼ + stars: | 2023-05-16 | by ( Matt Egan | ) edition.cnn.com time to read: +2 min

New York CNN —With time running out to reach a deal on the debt ceiling, Treasury Secretary Janet Yellen plans to meet with bank CEOs on Thursday afternoon in Washington, sources tell CNN. JPMorgan Chase CEO Jamie Dimon and Citigroup CEO Jane Fraser plan to attend the Yellen meeting, which will very likely include a focus on the debt ceiling as well as the banking crisis, people familiar with the matter told CNN. As the White House and Republican leaders struggle to reach a deal on the debt ceiling, Yellen has stepped up her warnings about the economic stakes. The debt ceiling is not necessarily the focus of the meeting, which will also include regional bank CEOs at a time when that industry is in turmoil. Yellen is also likely not the only figure from Washington who will speak before the bank CEOs this week.

☆ Debt ceiling worries deepen as early June U.S. default reinforced
▼ + stars: | 2023-05-12 | by ( Richard Cowan | ) www.reuters.com time to read: +6 min

The U.S. Congressional Budget Office report, issued Friday morning, confirms Treasury Secretary Janet Yellen's earlier warnings that a default could come as early as June 1. Congress' budget scorekeeper also noted that the federal government's debt payments "will remain uncertain throughout May, even if the Treasury ultimately runs out of funds in early June." She also said she remained optimistic that the debt limit problem would be resolved. A senior Treasury official told Reuters she would do that with board members of the Bank Policy Institute lobby group. Democratic Representative Abigail Spanberger said members of the U.S. Congress ought to have their paychecks withheld until the debt limit problem is resolved.

☆ AMERICAS Debt cap tick-tock leaves eerie calm
▼ + stars: | 2023-05-12 | by ( ) www.reuters.com time to read: +4 min

The issue dominated much of the G7 finance chiefs meeting in Japan. Dimon claimed any technical default could cause financial panic and JPMorgan had convened a 'war room' internally to deal with the issue. "It's very unfortunate, it's time-consuming, hopefully it won't happen, but it affects contracts, collateral, clearing houses, clients," Dimon said. Chinese stocks underperformed, with the G7 meeting mulling restrictions on investment to the world's second-biggest economy. Bank of England chief economist Huw Pill speaksReuters GraphicsJobless claimsReuters GraphicsReuters GraphicsBy Mike Dolan, editing by Christina Fincher, <a href="mailto:mike.dolan@thomsonreuters.com" target="_blank">mike.dolan@thomsonreuters.com</a>.

☆ Credit card companies need to explain the 'exorbitant' late fees they're charging customers, says Elizabeth Warren
▼ + stars: | 2023-05-09 | by ( Ethan Dodd | ) www.businessinsider.com time to read: +6 min

Sen. Elizabeth Warren wants to know if credit card companies stand with the banks. Currently, credit card companies are permitted to fine consumers up to $41 for each missed credit card payment — no questions asked. The other nine credit card companies Warren sent the letter to did not immediately reply to a request for comment. She wanted to know why reducing credit card late fees would be any different. Warren also asked each credit card company to answer how much money they collect in credit card fees each year — and the proportion from low-income earners — and the actual cost of collecting those fees.

☆ 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.

☆ Quotes: Fed plans broad revamp of bank oversight in wake of SVB collapse
▼ + stars: | 2023-04-28 | by ( ) www.reuters.com time to read: +11 min

The assertion in the introduction that the Fed should focus on large bank capital requirements is disconnected from the report's conclusions. AMERICAN BANK ASSOCIATION PRESIDENT AND CEO ROB NICOLS"We take any bank failure seriously, and we will review the findings and proposed policy changes in these reports carefully, including where the conclusions may differ. JONATHAN MONDILLO, HEAD OF NORTH AMERICAN FIXED INCOME AT ABRDN"We're likely to see higher capital requirements. What that means for the overall markets is that the devil is in the details: how stringent those capital requirements will be. A potential First Republic Bank failure could similarly present a risk to the long-term investment strategy of high net-worth individuals."

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.

"Not only are these big banks not sitting around and waiting for the phone to ring, they are also being proactive." Amid the nation's most troubling turmoil in banking since the global financial crisis nearly 15 years ago, the big banks are flexing their collective muscle. The 2008 financial crisis humbled the banking behemoths; the 2023 crisis of regional banks has now only cemented their power. For an increasingly stretched financial system, the big banks provide a needed stability. The flight to safety that is benefiting the big banks will have a cost, however.

☆ Premarket Stocks: Who do we blame for the fall of SVB?
▼ + stars: | 2023-03-16 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +8 min

Blame the Fed: SVB’s downfall was largely caused by a record $42 billion bank run that left the bank in desperate need of cash. But the Fed’s rate hikes had undermined the value of bonds, a critical source of capital for SVB. “The Federal Reserve failed as a bank supervisor,” he wrote. On Capitol Hill, frequent Fed critic Sen. Elizabeth Warren has been quick to blame Federal Reserve Chair Jerome Powell for a lack of oversight. Blame SVB: Others say the blame should be placed on the banks themselves.

☆ Banking system appears 'incredibly well capitlized', says former Fed economist Bill Nelson
▼ + stars: | 2023-03-10 | 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 EmailBanking system appears 'incredibly well capitlized', says former Fed economist Bill NelsonBill Nelson, chief economist at the Bank Policy Institute, joins CNBC's 'Squawk Box' to report on declining shares of Silicon Valley Bank and how the market is reacting on Friday.

☆ U.S. CFPB's bid to curb late credit card fees faces strong opposition
▼ + stars: | 2023-03-06 | by ( Niket Nishant | ) www.reuters.com time to read: +2 min

Fitch identified Discover Financial Services (DFS.N), Capital One Financial (COF.N), Synchrony Financial (SYF.N) and Bread Financial Holdings (BFH.N) among those at risk. Credit card companies typically rely on late fees to act as a bulwark against spending volumes tapering off when the economic environment is tough. If the CFPB's rule is implemented in its current form, it could reduce those fees by as much as 75% annually, the agency said. Michael Taiano, senior analyst at Fitch Ratings, said card companies could potentially resort to legal action to delay enforcement of these rules. "They could also respond by introducing other fees, like statement charges, which would charge a customer every time they request a statement," Taiano said.

☆ Sooner or later, Fed may need technical tweaks for rate control toolkit
▼ + stars: | 2023-02-01 | by ( Michael S. Derby | ) www.reuters.com time to read: +4 min

The tweaks they envision are not shifts in the federal funds target rate, the central bank’s main tool for influencing the economy to achieve its job and inflation goals. Those two rates exist to keep the market-driven fed funds rate in the desired range. One, called the reverse repo rate, sets a floor underneath short-term rates, while another, which pays deposit-taking banks to park cash at the Fed, sets the high end. Those adjustments happened purely to ensure control of the fed funds rate, while this sort of move would speak more directly to bigger monetary policy concerns around managing the size of its $8.5 trillion balance sheet. Some in the market fear rate control toolkit tweaks might create unneeded headaches if done too aggressively.

☆ Fed discount window borrowing is edging up, but is it a problem?
▼ + stars: | 2022-12-09 | by ( Michael S. Derby | ) www.reuters.com time to read: +5 min

In March 2020 at the onset of the coronavirus pandemic discount window borrowing surged to a peak of around $50 billion. Reuters GraphicsA JUMP IN BORROWINGDiscount window borrowing is opaque by design, and firm conclusions are difficult to reach, analysts say. “There really shouldn't be a reason discount window borrowing is increasing at all,” said Thomas Simons, an economist with investment bank Jefferies. “The increase in discount window borrowing may be a sign that funding pressures are building at the fringes of the market,” Abate wrote. Rising discount window borrowing might also have implications for the Fed's ongoing efforts to shrink the size of its balance sheet.

Yields on U.S. Treasury securities, which had dropped sharply after the Fed statement was released, turned higher. The 2-year note - the bond maturity most sensitive to Fed policy expectations - was up 6 basis points to about 4.61%. The document "implied that (the Fed) may be aiming for a higher medium-term level for the fed funds rate than currently expected," Nelson said. The language in the policy statement acknowledged the broad debate that has emerged around the Fed's policy tightening, and opened a new stage in that discussion. The Fed's statement "was a lot more definite about a possible downshift than I thought it would be.

A spokesperson for BNY Mellon declined to comment on the status of its crypto custody project. “BNY Mellon believes digital assets are here to stay, and increasingly becoming part of the mainstream of finance," he added. Offering to hold clients' digital assets appeared the safest way to enter the market. read moreThe SEC guidance departed from that practice. At a conference last week, the SEC's acting chief accountant said that custodied crypto assets present "unique" risks which meet the definition of a liability under U.S. accounting standards.

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