DIRS.INFO The most relevant business & tech news

☆ What’s Going On With First Republic Bank?
▼ + stars: | 2023-04-29 | by ( Colin Barr | ) www.wsj.com time to read: 1 min

First Republic Bank teetered for weeks following the failures early in March of two large U.S. regional banks, Silicon Valley Bank and Signature Bank. The San Francisco company reported first-quarter results on April 24. First Republic’s deposits fell by $100 billion during the banking crisis. Net income dropped by a third.

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.

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.

☆ Fed calls for rules revamp in 'unflinching' review of SVB oversight
▼ + stars: | 2023-04-28 | by ( ) www.reuters.com time to read: +2 min

Fed Vice Chair for Supervision Michael Barr called the review "unflinching," describing the U.S. central bank's oversight of the Santa Clara, California-based bank inadequate and regulatory standards too low. * Silicon Valley Bank was "acutely exposed" to risks from rising interest rates and slowing activity in the technology sector in ways that senior leaders and its board of directors did not appreciate. * In 2022, SVB failed to test its capacity to borrow at the discount window and did not have appropriate collateral and operational arrangements in place to obtain contingency funding. * Fed supervisors discussed conducting an interest-rate risk review of SVB during 2022 but decided to prioritize other exams and defer it to the third quarter of 2023. * The level of Fed resources dedicated to its regional bank oversight "proved insufficient."

In what Fed Vice Chair for Supervision Michael Barr called an "unflinching" review of the U.S. central bank's supervision of SVB, the Fed said its oversight of the Santa Clara, California-based bank proved inadequate and that regulatory standards were too low. At the time of its failure, SVB had 31 unaddressed citations on its safety and soundness, triple what its peers in the banking sector had, the report said. Barr said as a consequence of the failure, the central bank will reexamine how it supervises and regulates liquidity risk, beginning with the risks of uninsured deposits. "Contagion from the failure of SVB threatened the ability of a broader range of banks to provide financial services and access to credit for individuals, families, and businesses," Barr said. The Fed is looking at linking executive compensation to fixing problems at banks designated as deficient on management so as to focus executives' attention on those problems, a senior Fed official said in a briefing.

☆ Regulators to Publish Postmortems on Silicon Valley Bank, Signature Failures
▼ + stars: | 2023-04-28 | by ( Andrew Ackerman | ) www.wsj.com time to read: 1 min

Illustration: Alexandra LarkinWashington regulators plan to release postmortems of their oversight of Silicon Valley Bank and Signature Bank before they abruptly collapsed last month, potentially highlighting missteps by both banks’ management and their federal supervisors. The Federal Reserve is expected to release a report Friday morning digging into its handling of SVB, the culmination of a review led by Michael Barr , the Fed’s vice chair for supervision. A second report, expected later in the day from the Federal Deposit Insurance Corp., will analyze that agency’s oversight of Signature.

☆ Fed Says It Failed to Act on Problems That Led to Silicon Valley Bank Collapse
▼ + stars: | 2023-04-28 | by ( Andrew Ackerman | Ben Eisen | ) www.wsj.com time to read: 1 min

Illustration: Alexandra LarkinThe Federal Reserve’s banking supervisors failed to take forceful action to address growing problems at Silicon Valley Bank before it collapsed last month, the central bank’s top regulator said, signaling a broad push to toughen rules on the industry. Michael Barr , the Fed’s vice chair for supervision, said supervisors didn’t fully appreciate the extent of the vulnerabilities as SVB grew in size and complexity. When supervisors did find risks, they didn’t take sufficient steps to ensure the firm fixed those problems quickly enough, he said in a report Friday.

☆ Fed report on SVB collapse faults bank's managers — and central bank regulators
▼ + stars: | 2023-04-28 | by ( Jeff Cox | ) www.cnbc.com time to read: +6 min

Central bank officials likely will turn their attention to cultural changes, noting that risks at SVB were not thoroughly examined. Future changes could see standardized liquidity requirements to a broader range of banks, and tighter supervision of compensation for bank managers. "[T]he combination of social media, a highly networked and concentrated depositor base, and technology may have fundamentally changed the speed of bank runs,' he said in the report. "Social media enabled depositors to instantly spread concerns about a bank run, and technology enabled immediate withdrawals of funding." Fed Chairman Jerome Powell said he welcomed the Barr probe and its internal criticism of Fed actions during the crisis.

☆ Fed’s SVB review finds there’s no “I” in “blame”
▼ + stars: | 2023-04-28 | by ( John Foley | ) www.reuters.com time to read: +4 min

So many, in fact, that the report makes it hard to point the blame anywhere in particular. The 114-page post-mortem of SVB, compiled in just over six weeks at the behest of supervisory chief Michael Barr, points out some obvious but undeniable truths. But this ailing dog of a bank also had a too-long leash, thanks to timid, consensus-seeking supervisors. Using pre-rollback rules, SVB would have fallen visibly short of its required liquidity levels by the end of 2022. But the report skirts over the extent to which the Fed’s top staff were aware of risks at SVB.

☆ The Fed Failed but Wants More Power
▼ + stars: | 2023-04-28 | by ( The Editorial Board | ) www.wsj.com time to read: +1 min

Federal Reserve Board of Governors Vice Chair for Supervision Michael Barr testifies at a House Financial Services Committee hearing on Capitol Hill in March. Photo: Andrew Harnik/Associated PressAn iron law of the modern administrative state is that the solution to regulatory failure is always to give regulators more power. That’s the key to understanding Federal Reserve Vice Chair for Supervision Michael Barr ’s autopsy, released Friday, of Silicon Valley Bank’s (SVB) failure. The report offers a token mea culpa for not having responded fast enough to troubles at the bank. But that’s mainly a deflection from the report’s main purpose, which is to protect the Fed and bolster the Biden Administration’s financial regulatory agenda.

☆ The Fed’s autopsy report on Silicon Valley Bank is coming. Here’s what to expect
▼ + stars: | 2023-04-28 | by ( Allison Morrow | ) edition.cnn.com time to read: +3 min

The Federal Reserve, which is responsible for supervising banks in the United States, plans to release its report at 11 a.m. Another federal regulator, the Federal Deposit Insurance Corporation, will release a similar report on Signature Bank, which fell two days after SVB, in the afternoon. Those assets began steadily losing value when the central bank raised interest rates at a rapid pace last year. As the bank stumbled, it became clear that virtually all — 97%, according to data from Wedbush Securities — of SVB’s deposits were uninsured. There are indications the Fed, SVB’s primary regulator, warned the bank as early as 2019 about its insufficient risk-management systems, according to reporting from the Wall Street Journal and the New York Times.

☆ Highlights from the Fed review of SVB oversight
▼ + stars: | 2023-04-28 | by ( ) www.reuters.com time to read: +2 min

☆ First Republic teeters on the edge — again
▼ + stars: | 2023-04-28 | by ( Krystal Hur | ) edition.cnn.com time to read: +5 min

New York CNN —First Republic Bank’s fate is looking grim. The bank’s stock has plummeted about 75% this week, after a disappointing first-quarter earnings report Monday revived Wall Street’s fears about a banking crisis and catalyzed an exodus out of First Republic stock. About two-thirds of First Republic’s deposits were uninsured with the FDIC when the banking turmoil took hold in March, lower than the 94% at Silicon Valley Bank. But at the end of 2022, First Republic had a whopping ratio of 111% for loans and long-term investments to deposits, according to S&P Global. Déjà vuFirst Republic’s fight for survival comes just over a month after Silicon Valley Bank’s collapse on March 10.

☆ Factbox: Fed, FDIC reviews of US bank failures to spotlight problems, fixes
▼ + stars: | 2023-04-27 | by ( ) www.reuters.com time to read: +6 min

On Friday the banks' regulators - the Federal Reserve and the Federal Deposit Insurance Corporation - will publish their accounts of what happened at both institutions, and propose fixes to prevent a repeat. The FDIC will also publish a separate report on deposit insurance by Monday. Barr has said the Fed's report will include confidential supervisory information, including citations and exam material not typically disclosed. DEPOSIT INSURANCEThe second FDIC report could provide insight into how officials are thinking about the role of deposit insurance, currently capped at $250,000 per depositor, in financial stability. "The most interesting thing I expect to see is what the FDIC recommends about the deposit insurance cap," Phillips said.

☆ Here’s what the SVB report will (and won’t) include, according to top former Fed official
▼ + stars: | 2023-04-27 | by ( Elisabeth Buchwald | ) edition.cnn.com time to read: +5 min

Randal Quarles, former vice chair of supervision at the Fed, told CNN in an exclusive interview that he doesn’t expect the report to uncover any smoking guns. For instance, SVB was able to opt out of holding capital against its unrealized investment losses. Cole Burston/Bloomberg/Getty ImagesIn Quarles’ view, returning to the pre-2019 requirements “would not have made any difference” in preventing SVB from failing. The real issue that the Fed’s report should address, he said, is why SVB’s uninsured depositors were so quick to flee. That’s why Quarles said he didn’t hear about the red flags Fed officials identified when he was vice chair for supervision.

Signature Bank's failure took only marginally longer. "The number 36 has just been, you know, branded in my brain," Atlanta Fed President Raphael Bostic told Reuters earlier this month. "I think that any time you have a bank failure like this, bank management clearly failed, supervisors failed and our regulatory system failed," Barr told U.S. lawmakers in a hearing in March. "It's how do we allow a bank whose failure threatened the financial system to persist without being subject to more aggressive intervention?" "One thing for certain ... this was a very significant supervisory failure," Tarullo said at the Peterson Institute for International Economics event on Wednesday.

☆ Dollar, yen boosted as US banking sector fears put safe-havens back in vogue
▼ + stars: | 2023-04-26 | by ( Ankur Banerjee | ) www.reuters.com time to read: +4 min

The dollar index , which measures the currency against six major rivals, nudged 0.01% higher to 101.80 after a 0.5% increase overnight. The Japanese yen strengthened 0.13% to 133.53 per dollar, after gaining about 0.4% on Tuesday. The traditional safe-haven gained 2.6% in March amid fears of a widespread banking crisis but has lost 0.6% in April as the worries eased. The U.S. Richmond Fed manufacturing index slid as well, down to -10 in April, the fourth straight month of contraction. The Australian dollar slid to a six-week low of $0.6604 before settling down 0.3% at $0.6605 after data showed inflation eased from 33-year highs in the first quarter, while core inflation dipped below forecasts.

☆ Dollar, yen buoyed as US banking sector fears put safe-havens back in vogue
▼ + stars: | 2023-04-26 | by ( Ankur Banerjee | ) www.reuters.com time to read: +3 min

The dollar index , which measures the currency against six major rivals, nudged 0.01% higher to 101.80 following a 0.5% increase overnight. The traditional safe-haven gained 2.6% in March amid fears of a widespread banking crisis but has lost 0.6% for the month of April. U.S. consumer confidence dropped to a nine-month low in April, data overnight showed, heightening the risk that the economy could fall into recession this year. The U.S. Richmond Fed manufacturing index slid as well, down at -10 in April, the fourth straight month of contraction. The Australian dollar was swinging between losses and gains after data showed inflation eased from 33-year highs in the first quarter, while core inflation dipped below forecasts.

☆ Dollar, yen buoyed as U.S. banking sector fears put safe-havens back in vogue
▼ + stars: | 2023-04-26 | by ( ) www.cnbc.com time to read: +3 min

The U.S. dollar and the yen, both safe haven assets, were mostly steady after spiking higher overnight as renewed concerns over the U.S. banking sector and economy dented risk sentiment. The dollar index , which measures the currency against six major rivals, nudged 0.01% higher to 101.80 following a 0.5% increase overnight. The traditional safe-haven gained 2.6% in March amid fears of a widespread banking crisis but has lost 0.6% for the month of April. U.S. consumer confidence dropped to a nine-month low in April, data overnight showed, heightening the risk that the economy could fall into recession this year. The Australian dollar was swinging between losses and gains after data showed inflation eased from 33-year highs in the first quarter, while core inflation dipped below forecasts.

☆ China wants its AI to only say nice things about the communist party. Good luck with that.
▼ + stars: | 2023-04-24 | by ( Alistair Barr | ) www.businessinsider.com time to read: +4 min

AI systems must reflect China's "socialist core values," according to new rules reported by The New York Times. Proposed regulations could make it harder for Alibaba, Baidu and other Chinese tech companies to chase OpenAI. Bytedance and Tencent are also competing in the new AI race against Google and Facebook. A new wave of AI models is already beginning to disrupt Western business and society by automating some tasks and convincingly lying about important topics. Tencent, Bytedance, Baidu, Alibaba, Sensetime, and other big Chinese tech companies have the technical prowess to develop their own generative AI models.

☆ Mark Zuckerberg has become so obsessed with AI that one Wall Street research firm is jesting that Facebook will change its name to MetAI
▼ + stars: | 2023-04-24 | by ( Alistair Barr | ) www.businessinsider.com time to read: +3 min

18 months ago, Zuckerberg bet the future of Facebook on the metaverse, and even changed the company's name. Some analysts are now concerned about Meta spending too much on AI, Zuckerberg's latest obsession. Just 18 months ago, Mark Zuckerberg bet the future of Facebook on the metaverse, and even changed the company's name to Meta. Investors and analysts only just recovered from the company's metaverse spending splurge. Meta reports quarterly results April 26, and Wall Street will be watching the company's spending and investment plans closely.

☆ Michael Cohen seeks damages from Trump, U.S. over prison return
▼ + stars: | 2023-04-24 | by ( Karen Freifeld | ) www.reuters.com time to read: +3 min

Circuit Court of Appeals in Manhattan that the judiciary has a responsibility to remediate the harm done by Trump and his subordinates. Liman said that while his decision did "violence" to Cohen's constitutional rights, Cohen was not entitled to damages under U.S. Supreme Court precedent. Michael Cohen, former attorney for former U.S. President Donald Trump, arrives to the New York Courthouse in New York City, U.S., March 13, 2023. Former U.S. Attorney General William Barr and various prison officials are also defendants in Cohen's lawsuit. He is also suing Cohen for $500 million in damages in federal court in Miami, accusing him of "spreading falsehoods" and failing to keep attorney-client communications confidential.

☆ Fed Rethinks Loophole That Masked Losses on SVB’s Securities
▼ + stars: | 2023-04-21 | by ( Andrew Ackerman | Rachel Louise Ensign | ) www.wsj.com time to read: 1 min

The collapse of Silicon Valley Bank, which held $200 billion in assets, has sent shock waves through Wall Street and Main Street. WSJ’s Dion Rabouin explains what this means for investors and everyday Americans worried about a broader, systemic problem in the U.S. banking system. Illustration: Preston JesseeWASHINGTON—The Federal Reserve may close a loophole that allows some midsize banks to effectively mask losses on securities they hold, a contributing factor in the collapse of Silicon Valley Bank. Led by vice chair for supervision Michael Barr , the Fed is considering ending an exemption that allows some banks to boost the amount of capital they report for regulatory purposes, according to people familiar with the matter. Capital is the buffer banks are required to hold to absorb potential losses.

☆ The Fed may close the loophole that hid big losses at Silicon Valley Bank, report says
▼ + stars: | 2023-04-21 | by ( Carla Mozée | ) www.businessinsider.com time to read: +2 min

The Fed may reverse an exemption that allows some midsize banks to conceal losses on securities they hold, The Wall Street Journal reported Friday. A loophole allows some banks to boost the amount of capital they report for regulatory purposes. Regulators are considering reversing a loophole that lets some banks boost the amount of capital they report for regulatory purposes, sources told the Journal in a report published Friday. The report pointed out that SVB was sitting on unrealized losses in a separate batch of securities the bank said it would hold to maturity. The losses weren't recognized in the bank's financial statements or in regulatory capital.

☆ U.S. financial regulators to tighten rules on non-bank firms, risk assessment
▼ + stars: | 2023-04-21 | by ( David Lawder | ) www.reuters.com time to read: +3 min

WASHINGTON, April 21 (Reuters) - The Financial Stability Oversight Council on Friday proposed guidance to make it easier to designate non-bank financial institutions for regulatory supervision and new procedures to better identify and respond to financial system risks. U.S. Treasury Secretary Janet Yellen has raised concerns about non-bank financial institutions, including hedge funds, private equity firms and pension funds as a potential source of financial instability because of a lack of supervision and. The new guidance removes some "inappropriate hurdles" to designating non-bank firms and replaces them with a process that allows for firms under review to have significant engagement with regulators. RISKS, VULNERABILITIESFSOC's proposed new risk assessment framework aims to enhance the council's ability to address financial stability risks by reviewing a broad range of asset classes, institutions and activities, according to a Treasury fact sheet. The new framework also specifies vulnerabilities that FSOC and member regulators would consider when evaluating potential stability risks.

Search resuls for: "BARR"

25 mentions found