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☆ U.S. financial system vulnerable to bond market stress, Fed's Logan says
▼ + stars: | 2023-03-03 | by ( Michael S. Derby | ) www.reuters.com time to read: +4 min

Logan, who holds a vote in this year's Federal Open Market Committee monetary policy meetings, did not comment on the outlook for monetary policy and the economy in her prepared remarks. She spoke amid ongoing concern about how financial markets, most notably the sector that trades U.S. government debt, will respond to the next chapter of stress. That said, a semi-annual monetary policy report released by the Fed on Friday sounded a somewhat sanguine note on market risk at the current moment. Trading in the Treasury market has been "orderly," although that particular market was more challenged on the liquidity front compared to others, it said. "The public and private sectors must work together to enhance market resilience so that these episodes will be far less frequent going forward," Logan said.

☆ Fed's Logan says financial system vulnerable to bond market stress
▼ + stars: | 2023-03-03 | by ( Michael S. Derby | ) www.reuters.com time to read: +3 min

Logan, who holds a vote on this year’s Federal Open Market Committee monetary policy meetings, did not comment on the outlook for monetary policy and the economy in her prepared remarks. Before joining the Dallas Fed last year as its leader, Logan was a key official at the New York Fed designing and implementing the monetary policy directives of the FOMC. Those increases coupled with the Fed’s ongoing efforts to shed bonds to reduce its market footprint, have raised questions about what authorities might do to support markets in the future. A paper this week from the New York Fed said the official sector needs to move toward finding a more formalized approach to providing support. Logan said authorities are continuing to work on methods to formalize how they might intervene and to shore up underlying market strength.

BEIRUT, Jan 20 (Reuters) - Lebanese bankers told European prosecutors they believed that commissions now at the centre of a graft probe had been paid to the central bank, four sources said, while investigators suspect the cash illegally ended up with the governor's brother. They suspect central bank governor Riad Salameh and his brother Raja illegally took more than $300 million from the central bank between 2002 and 2015 and invested some of the funds in Europe. The bankers and officials told the visiting European prosecutors that they were not aware that the funds had gone to Forry Associates, the four sources said. The four sources said former central bank officials and private bankers had told the European prosecutors they first heard of Forry Associates when the investigation began and the name appeared in the media. A separate but related Lebanese probe charged Riad Salameh with illicit enrichment in March, which he has denied.

☆ Big U.S. banks continue to add jobs as Goldman Sachs cuts staff
▼ + stars: | 2023-01-14 | by ( ) www.cnbc.com time to read: +3 min

The chief financial officers of the two biggest U.S. banks said they would hire selectively despite waning economic growth. JPMorgan's Chief Financial Officer Jeremy Barnum said the bank is still hiring and "in growth mode" in a call with journalists to discuss the bank's fourth-quarter earnings. Bank of America also continues to hire, particularly in wealth management, while also remaining disciplined on its expenses, Chief Financial Officer Alastair Borthwick told reporters on Friday. Citigroup Inc's Chief Financial Officer Mark Mason told an earnings briefing "we're actively hiring to execute against our strategy. The banking giants stood by their hiring plans even as other lenders cut staffing in investment banking and mortgages.

[1/4] A Bank of America logo is pictured in the Manhattan borough of New York City, New York, U.S., January 30, 2019. The chief financial officers of the two biggest U.S. banks said they would hire selectively despite waning economic growth. JPMorgan's (JPM.N) Chief Financial Officer Jeremy Barnum said the bank is still hiring and "in growth mode" in a call with journalists to discuss the bank's fourth-quarter earnings. Bank of America (BAC.N) also continues to hire, particularly in wealth management, while also remaining disciplined on its expenses, Chief Financial Officer Alastair Borthwick told reporters on Friday. The banking giants stood by their hiring plans even as other lenders cut staffing in investment banking and mortgages.

☆ Crypto lender Genesis reportedly owes creditors $3 billion, and is eyeing the sale of its parent company's venture assets to raise funds
▼ + stars: | 2023-01-12 | by ( Morgan Chittum | ) www.businessinsider.com time to read: +3 min

Crypto lender Genesis owes its creditors more than $3 billion, the Financial Times reported on Thursday. Genesis' parent company DCG may sell assets in its venture portfolio to raise fresh cash. Genesis' lending arm took hits after FTX filed for bankruptcy, causing a liquidity crisis late last year. Digital Currency Group (DCG), the crypto conglomerate that oversees Genesis, is also looking to sell assets in its venture portfolio to raise fresh cash, per the Financial Times. In November, Gemini had to halt withdrawals for its interest-bearing product due to a liquidity crisis with Genesis, its lending partner.

☆ The Winklevoss' Gemini terminates its yield product as dispute between the crypto exchange and DCG escalates
▼ + stars: | 2023-01-10 | by ( Morgan Chittum | ) www.businessinsider.com time to read: +2 min

Gemini told clients that the crypto exchange will terminate its interest-bearing product. Gemini cofounder Cameron Winklevoss accused Genesis, its parent company DCG, and founder Barry Silbert of fraud on Tuesday. The firm ended its master loan agreement and partnership between Gemini and crypto brokerage Genesis. Genesis' lending arm halted customer withdrawals in November, leaving $900 million of Gemini client money in the lurch. In an open letter to DCG's board on Tuesday, Gemini cofounder Cameron Winklevoss accused Genesis, DCG, and the holding company's founder Barry Silbert of accounting fraud.

☆ Op-ed: FTX crash shows cryptocurrency market needs bank-like regulation
▼ + stars: | 2022-12-05 | by ( Rob Nichols | Dennis Kelleher | ) www.cnbc.com time to read: +6 min

Instead, many crypto-asset customers had accounts at nonbank crypto firms. This is very similar to what happened at nonbank financial firms during the 2008 financial crash and would have happened when the 2020 pandemic hit if the Fed had not acted so quickly. Finally, this principle doesn't mean that a company has to be a bank to offer financial products or services. Innovation in the financial sector is critical to maximizing benefits for consumers, and fair, properly and consistently regulated competition can drive this process forward. But consumers also expect that the rules that govern providers — whether bank or nonbank — protect them and financial stability.

☆ G20 watchdog in step-by-step approach to funds sector 'vulnerabilities'
▼ + stars: | 2022-11-10 | by ( Huw Jones | ) www.reuters.com time to read: +3 min

Central banks had to inject liquidity when money market funds ran into difficulties as economies went into lockdown in March 2020. The collapse of investment house Archegos also drew attention to "hidden leverage" in the vast non-bank financial intermediation (NBFI) sector, according to a report and policy proposals from the G20's Financial Stability Board on Thursday. "The policy proposals involve largely repurposing existing policy tools rather than creating new ones," the FSB report, sent to G20 leaders ahead of their meeting next week, said. FSB non-banks graphic November 2022Sharply rising interest rates and looming recession underscore the need to scrutinise non-banks, which include hedge funds, pension funds and insurers. It has no power to impose rules but its members - regulators, central banks and treasury officials from G20 economies - commit to implementing finalised policies.

☆ Analysis: Nagging U.S. Treasury liquidity problems raise Fed balance sheet predicament
▼ + stars: | 2022-11-08 | by ( Gertrude Chavez-Dreyfuss | ) www.reuters.com time to read: +5 min

The Fed's balance sheet though remains at a lofty $8.7 trillion, down modestly from a peak of nearly $9 trillion. Fed' balance sheetHowever, there are underlying liquidity and volatility problems in U.S. Treasuries amid the Fed's aggressive rate hike cycle. While the Fed is determined to reduce its balance sheet, if the problems facing investors get out of control, some analysts said the Fed may just halt or suspend it. UBS economists said last month the Fed's balance sheet runoff will face several complications through 2023, prompting the Fed to sharply slow or fully stop balance sheet reduction sometime around June 2023. BCA's Swift said while the Treasury market has grown dramatically since 2008, dealer intermediation, has remained low, noting that regulations made it less appealing for dealers to undertake such activity in the Treasury market.

☆ Britain to go it alone for now on reining in 'shadow banking'
▼ + stars: | 2022-11-02 | by ( Huw Jones | ) www.reuters.com time to read: +5 min

Britain hopes the LDI crisis creates momentum for comprehensive global reform to improve data and liquidity in the sector. In Britain the Financial Conduct Authority (FCA) regulates UK-based managers of LDI funds, and The Pensions Regulator (TPR) regulates pension schemes. UK regulators face pushing ahead alone, for now, hoping global reforms eventually pressure others to follow suit. Most LDI funds are listed in European Union states like Luxembourg and Ireland, meaning structural changes would rely on the bloc. The Central Bank of Ireland said it has stepped up data collection, analysis and engagement with LDI funds.

☆ Italian court suspends decision on Amazon's record fine appeal
▼ + stars: | 2022-10-28 | by ( ) www.reuters.com time to read: +1 min

ROME, Oct 28 (Reuters) - An Italian court has suspended a decision on a request by e-commerce giant Amazon (AMZN.O) to annul a record 1.13 billion euro ($1.12 billion) fine imposed by Italy's antitrust watchdog for alleged abuse of market dominance, a court ruling showed on Friday. Italian administrative court TAR del Lazio said it had suspended judgment pending a ruling by the European Union Court of Justice over the case. Last year Italy's competition watchdog ruled that Amazon had used its dominant position in the Italian market for intermediation services on marketplaces to favour the adoption of its own logistics service by sellers active on Amazon.it. Amazon said at the time it "strongly disagreed" with the Italian regulator's decision and would appeal. ($1 = 1.0054 euros)Reporting by Marco Carta, writing by Elvira Pollina Editing by Federico Maccioni and Keith WeirOur Standards: The Thomson Reuters Trust Principles.

☆ Yellen taking steps to enhance Treasury market, boost funds resilience
▼ + stars: | 2022-10-24 | by ( David Lawder | ) www.reuters.com time to read: +3 min

Oct 24 (Reuters) - The U.S. Treasury is taking steps to strengthen the resilience of the Treasury debt market and private money market and bond funds, but the U.S. financial system is functioning well despite elevated global volatility, Treasury Secretary Janet Yellen said on Monday. "Treasury is working with financial regulators to advance reforms that improve the Treasury market's ability to absorb shocks and disruptions, rather than to amplify them," Yellen said. MONEY MARKETS, BOND FUNDSHigher market volatility also could expose vulnerabilities in non-bank financial intermediation, Yellen said. She added that Treasury and financial regulators are working to better monitor leverage in private funds and to "develop policies to reduce the first-mover advantage that could lead to investor runs in money market funds and open-end bond funds." Yellen cited stresses in money market funds during the 2008 financial crisis and again in March 2020 as the reason for the Securities and Exchange Commission's new proposed rules to improve resilience and transparency in the $5 trillion money market sector.

☆ Yellen says taking steps to enhance Treasury market, funds resilience
▼ + stars: | 2022-10-24 | by ( David Lawder | ) www.reuters.com time to read: +2 min

Oct 24 (Reuters) - U.S. Treasury Secretary Janet Yellen said on Monday the U.S. financial system remains resilient amid global volatility, but the Treasury is taking steps to mitigate potential risks in the Treasury market and private money market and bond funds. While we continue to watch for emerging risks, our system remains resilient and continues to operate well through uncertainties," Yellen said. But Yellen added that recent episodes of stress in the Treasury market pointed to the need to take steps to enhance its resilience. "Treasury is working with financial regulators to advance reforms that improve the Treasury market's ability to absorb shocks and disruptions, rather than to amplify them," Yellen said. Higher market volatility also could expose vulnerabilities in non-bank financial intermediation, Yellen said.

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