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Wall Street posted solid gains on Wednesday as volatility slumped to its lowest since the U.S. banking tremors were first felt three weeks ago. While bond yields inched up, bond market volatility also fell and fixed income markets were pretty calm. The rate-sensitive Nasdaq jumped 1.8% for its best day in two weeks, boosted by positive tech company outlooks. The MSCI World financials index is now up three days in a row and the U.S. regional banking index has risen for four straight days, neither of which have been recorded since January. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Dollar on the defensive as banking fears ebb; yen drops
▼ + stars: | 2023-03-29 | by ( ) www.cnbc.com time to read: +2 min

In this photo illustration, US 100 dollar bills seen on an American flag. The dollar index , which tracks the currency against six major peers, was flat in early Asian trading, following drops of about 0.3% in each of the past two sessions. The yen remained volatile in the run-up to the end of the Japanese fiscal year on Friday. The dollar jumped 0.51% to 131.59 yen , erasing all of the previous day's 0.5% decline, when it uncharacteristically moved in the opposite direction with long-term U.S. Treasury yields. The token had dipped as low as $26,541 on Monday, after its retreat from a nine-month high of $29,380 last week.

☆ CNBC Daily Open: After SVB collapse, stricter rules coming for banks?
▼ + stars: | 2023-03-29 | by ( Yeo Boon Ping | ) www.cnbc.com time to read: +2 min

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. The rise in yields suggests traders are growing confident the banking turmoil is subsiding, and they're turning their attention back to inflation. In a bizarre way, even if that's bad news for inflation, that's probably good news for everyone who's been consumed by banking fears in recent days. Subscribe here to get this report sent directly to your inbox each morning before markets open.

A pedestrian walks past the Federal Reserve Headquarters on March 21 in Washington, DC. Daines also accused the Federal Reserve Bank of San Francisco of prioritizing addressing climate change over the risks presented by higher interest rates. In an interview with Montana Public Radio in 2014, Daines said that "the jury’s still out" on whether climate change is real. These responsibilities are tightly linked to our responsibilities for bank supervision. The public reasonably expects supervisors to require that banks understand, and appropriately manage, their material risks, including the financial risks of climate change.”

Senators rebuked the Federal Reserve for failing to prevent the collapse of Silicon Valley Bank despite identifying risks beforehand, while the central bank’s top regulator blamed the firm’s executives for not fixing its problems. In an appearance Tuesday before the Senate Banking Committee, Michael Barr , the Fed’s vice chairman for banking supervision, defended the actions of the Fed’s supervisors and said the central bank had privately raised concerns with SVB before its March 10 collapse and had given the lender poor ratings for managing its risks.

SummarySummary Companies Futures down: Dow 0.10%, S&P 0.17%, Nasdaq 0.22%March 28 (Reuters) - U.S. stock index futures slipped on Tuesday as Treasury yields rose amid easing worries about a banking crisis following First Citizens BancShares' U.S. regulator-backed deal for failed Silicon Valley Bank. Shares of First Citizens BancShares Inc (FCNCA.O) fell 1% in premarket trading after surging more than 50% on Monday following its deal to acquire the deposits and loans of failed Silicon Valley Bank. Regional banks also rose, led by First Republic Bank's (FRC.N) 2.2% gain after a 12% rally on Monday. Later in the day, Fed Vice Chair for Supervision Michael Barr will testify before the Senate Committee on Banking, Housing and Urban Affairs on "bank oversight" in the first of several hearings on the collapse of Silicon Valley Bank and Signature Bank. ET, Dow e-minis were down 31 points, or 0.1%, S&P 500 e-minis were down 6.75 points, or 0.17%, and Nasdaq 100 e-minis were down 27.75 points, or 0.22%.

☆ Fed's Michael Barr: Silicon Valley Bank was 'not well managed'
▼ + stars: | 2023-03-28 | 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 EmailFed's Michael Barr: Silicon Valley Bank was 'not well managed'Fed Governor Michael Barr, the central bank's vice chair for supervision, breaks down the SVB and Signature bank failures.

☆ SVB sale puts too-big-to-fail risk in a new bottle
▼ + stars: | 2023-03-28 | by ( John Foley | ) www.reuters.com time to read: +4 min

The sale of SVB to rival First Citizens Bancshares (FCNCA.O) addresses the first part, and doubles down on the second. First Citizens snapped up $110 billion of SVB’s assets over the weekend, at a generous $16.5 billion discount to book value. And for the Federal Deposit Insurance Corp, which is handling SVB’s sale, First Citizens chief Frank Holding is a known quantity. In SVB’s case, the FDIC has agreed to absorb some potential losses in the failed bank’s loan book. The FDIC expects its fund for managing failed banks will take a $20 billion hit.

☆ What to expect from the Senate hearings on recent bank failures
▼ + stars: | 2023-03-28 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +4 min

New York CNN —Silicon Valley Bank’s liquidity crisis and subsequent downfall sent waves of panic through the financial system in early March, setting off a chain reaction of chaos with which regional banks are still grappling. On Wednesday, the House Financial Services Committee will continue with their own line of questioning. Sen. Brown has called for the executives of Silicon Valley Bank to be held accountable for the bank’s failure. “Our banking system is sound and resilient, with strong capital and liquidity,” Barr said. The failures of SVB and Signature Bank, he wrote, “demonstrate the implications that banks with assets over $100 billion can have for financial stability.

☆ Treasury yields rise as investors consider economic outlook
▼ + stars: | 2023-03-28 | by ( Sophie Kiderlin | ) www.cnbc.com time to read: +1 min

ET, the yield on the 10-year Treasury was trading at 3.5507% after rising over two basis points. The yield on the 2-year Treasury was more than five basis points higher at 4.0186%. U.S Treasury yields climbed on Tuesday as investors assessed what could be on the horizon for the U.S. economy and Federal reserve policy decisions. Investors considered the outlook for the economy as fears about a widespread banking crisis eased. Many investors have been concerned about whether the pace of rate hikes and keeping rates higher for longer could drag the U.S. economy into a recession.

The nation's top bank regulators will face tough questions for the first time Tuesday about how Silicon Valley Bank and Signature Bank collapsed practically overnight earlier this month. This allowed the FDIC to guarantee hundreds of billions of dollars in uninsured deposits at the banks, money that might otherwise have been wiped out. Both Republicans and Democrats on the 29-member panel questioned whether these deposit guarantees amounted to a government bailout for rich account holders. "One clear takeaway from recent events is that heavy reliance on uninsured deposits creates liquidity risks that are extremely difficult to manage," the FDIC's Gruenberg said in his written testimony. "Particularly in today's environment where money can flow out of institutions with incredible speed in response to news amplified through social media channels."

☆ US stocks fall as rising bond yields pressure tech amid easing banking sector fears
▼ + stars: | 2023-03-28 | by ( Carla Mozée | ) www.businessinsider.com time to read: +2 min

US stocks fall Tuesday, leaving the S&P 500 lower after three days of gains. The 2-year Treasury yield pushed back above 4%, pressuring tech stocks. Sign up for our newsletter to get the inside scoop on what traders are talking about — delivered daily to your inbox. Tech stocks were stung by a rise in the 2-year Treasury yield, pushing above 4% for the first time in nearly a week. Higher yields slice into the value of future profit for tech and other growth companies.

☆ SVB customers tried to withdraw nearly all the bank’s deposits over two days, Fed's Barr testifies
▼ + stars: | 2023-03-28 | by ( Hugh Son | ) www.cnbc.com time to read: +2 min

The run on Silicon Valley Bank's deposits this month went far deeper than was initially known. Regulators shuttered SVB on March 10 in the biggest bank failure since the 2008 financial crisis. The combined withdrawal figure of $142 billion represents a staggering 81% of SVB's $175 billion in deposits as of the end of last year. Lawmakers summoned top U.S. banking regulators to Washington to explain why Silicon Valley Bank and Signature Bank collapsed earlier this month. In fact, Fed supervisors began warning SVB management about the risk that higher interest rates posed to the bank's balance sheet in November 2021, Barr testified.

☆ Premarket stocks: Banking chaos could break the strong job market
▼ + stars: | 2023-03-28 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +7 min

New York CNN —The job market has remained strong even as the Federal Reserve has spent a full year attempting to cool off the economy by raising interest rates. But economists think that the recent banking turmoil may be what finally raises unemployment. Even with those big job cuts, the labor market in the United States remains white hot. Since the pandemic, regional banks “have provided a vast majority of lending to small firms, underwriting local small business formation,” said Philip Wool, an analyst with asset manager Rayliant. AI will likely lead to job loss, they wrote, but technological innovation that initially displaces workers has historically created employment growth over long haul.

☆ Morning Bid: Swinging between bank fears and rate risks
▼ + stars: | 2023-03-28 | by ( ) www.reuters.com time to read: +5 min

A look at the day ahead in U.S. and global markets from Mike DolanMarkets seem caught between the devil and the deep blue sea. Easing concerns about bank stability this week have merely re-introduced interest rate risk, reining in any suggestion of a runaway relief rally as the first quarter closes on Friday. While nerves persist over March bank failures and contagion fears, central banks are still faced with punchy growth and inflation and will likely switch attention back to cooling that down once they're assured banks can take the strain. But interest rate markets are already correcting as signs of stability in the banking arena emerge. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Fed's Barr says first learned of risks at SVB weeks before it failed
▼ + stars: | 2023-03-28 | by ( ) www.reuters.com time to read: +1 min

March 28 (Reuters) - The U.S. Federal Reserve's head of banking supervision said Tuesday he was first made aware of the interest rate risk-related issues at Silicon Valley Bank in mid-February, just weeks before its failure. "The staff highlighted the interest-rate risk that was present at Silicon Valley Bank and indicated that they were in the middle of a further review," Barr said. "I believe that is the first time that I was told about interest-rate risk at Silicon Valley Bank." In mid-2022, Fed staff deemed the bank's management to be deficient and barred the bank from growing through mergers or acquisitions, Barr said. "To the best of my knowledge I first learned about the issues at Silicon Valley Bank with respect to interest rate risk in mid-February of 2023," Barr said.

☆ First Citizens shares hit record high in wake of SVB purchase
▼ + stars: | 2023-03-28 | by ( ) www.reuters.com time to read: +2 min

March 28 (Reuters) - Shares of First Citizens BancShares Inc (FCNCA.O) climbed to a record high on Tuesday, extending gains for a second day after scooping up the assets of failed peer Silicon Valley Bank. First Citizens BancShares rebounds to record highFirst Citizens rallied as much as 7.2%, briefly hitting an all-time peak of $959.99 before paring gains. Investors sent a record net $236 million into the iShares Regional Bank ETF (IAT.P) over the last two weeks, evidence that some investors are betting on a rebound in fundamentally strong regional lenders following the recent sell-off. Policymakers, regulators and central banks have emphasized that the turmoil is not a precursor to another global financial crisis. Shares of SVB Financial Group , which operated Silicon Valley Bank, traded on Tuesday as an over-the-counter stock and were last at 28 cents per shares, down from about $268 before the bank's collapse, an all but complete loss for its shareholders.

☆ Stock futures rise slightly after Nasdaq falls for a second day: Live updates
▼ + stars: | 2023-03-28 | by ( Sarah Min | ) www.cnbc.com time to read: +2 min

U.S. stock futures ticked higher Tuesday night after the major averages declined on the back of higher bond yields. Dow Jones Industrial Average futures rose by 41 points, or 0.13%. S&P 500 and Nasdaq 100 futures climbed 0.14% and 0.09%, respectively. The Nasdaq Composite closed down 0.45% during the regular session on Tuesday, falling for a second straight day as rising yields weighed on tech stocks. Economists polled by Dow Jones forecast a decline of 3% in February, down from a rise of 8.1% the previous month.

WASHINGTON, March 28 (Reuters) - Lawmakers are expected to put top U.S. bank regulators on the defensive over the unexpected failures of regional lenders Silicon Valley Bank and Signature Bank when they testify before Congress on Tuesday. Regulators have vowed to review their rules and procedures after the twin failures while insisting the overall system remains sound. Tuesday's hearing at the Senate Banking Committee will give lawmakers the chance to press watchdogs on what went wrong on their watch, and push preferred policy prescriptions. They just didn't," said Sen. Tim Scott of South Carolina, the top Republican on the Senate Banking Committee, at a banking industry conference last week. Some Democrats, including major bank critic Senator Elizabeth Warren of Massachusetts, have also argued a 2018 bank deregulation law is to blame.

☆ Morning Bid: Calm returns: Investors switch to bank fundamentals
▼ + stars: | 2023-03-28 | by ( ) www.reuters.com time to read: +3 min

A look at the day ahead in European and global markets from Anshuman DagaTurbulence in global markets is gradually giving way to stability. A day after regional U.S. lender First Citizens BancShares moved to scoop up the assets of failed Silicon Valley Bank, brave investors can probably begin to ask, "Is the worst over?" A strong show of confidence is coming from U.S. authorities as bank regulators say the system is sound but rules need review. A recover in U.S. markets, especially in beaten-down bank shares, lifted Asian stocks on Monday while the safe-haven dollar declined. While the analysts expect a continuation of declining credit growth which is consistent with monetary tightening, they don't expect any credit crunch.

March 29 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever. An interest rate decision in Thailand and Australian inflation top a light Asian calendar on Wednesday, with broader risk appetite likely to be tempered by a further rebound in U.S. bond yields. But this relief is running up what looks like a renewed spike higher in bond yields and borrowing costs, which is dampening risk appetite. One curiosity is the dollar, weakening again on Tuesday despite the rise in U.S. bond yields. Indeed it mostly struggled to catch a safe-haven bid when the banking stresses were most acute and is now struggling even when U.S. yields are rising.

☆ Fed Official Calls Silicon Valley Bank Failure a ‘Textbook Case of Mismanagement’
▼ + stars: | 2023-03-27 | by ( Andrew Ackerman | ) www.wsj.com time to read: 1 min

Michael Barr, the Fed’s top banking regulator, says the central bank is reviewing its supervision of Silicon Valley Bank. WASHINGTON— The failure of Silicon Valley Bank demonstrates a “textbook case of mismanagement,” the Federal Reserve’s top banking regulator is expected to tell Senate lawmakers on Tuesday, while acknowledging there may have been shortcomings in the central bank’s oversight. “SVB failed because the bank’s management did not effectively manage its interest rate and liquidity risk, and the bank then suffered a devastating and unexpected run by its uninsured depositors,” said Michael Barr , the Fed’s vice chairman for supervision, in written testimony released by the central bank.

☆ Asia wary, US stock futures up on SVB reports
▼ + stars: | 2023-03-27 | by ( Wayne Cole | ) www.reuters.com time to read: +3 min

Helping nerves were reports First Citizens BancShares Inc (FCNCA.O) was in advanced talks to acquire Silicon Valley Bank (SIVB.O) from the Federal Deposit Insurance Corp.S&P 500 futures firmed 0.5% in early trade while Nasdaq futures added 0.4%. "The current level of credit default swaps for European banks is just a little lower than it was during the height of the European financial crisis in 2013," noted Naeem Aslam Chief Investment Officer at Zaye Capital Markets. "If these CDS do not normalise, it is highly likely stock market may continue to suffer for many days." Over in the United States, depositors have been fleeing smaller banks for their larger cousins or to money market funds. Flows to money market funds have risen by more than $300 billion in the past month to a record atop $5.1 trillion.

☆ Fed's Barr calls Silicon Valley Bank failure a 'textbook case of mismanagement'
▼ + stars: | 2023-03-27 | by ( Jeff Cox | ) www.cnbc.com time to read: +3 min

The Federal Reserve's top banking regulator said Monday that the failure of Silicon Valley Bank was due largely to mismanagement, though he noted that regulation and oversight also need to step up. "To begin, SVB's failure is a textbook case of mismanagement," he said. Along with the examination into what happened specifically with the bank, Barr also noted that the probe will examine whether the Fed's testing of risk was adequate. He pointed out that the supervisors identified problems with SVB's liquidity risk management as far back as late-2021. Part of the review also will look at whether more stringent standards would have pushed SVB to have a better handle on its liquidity risk.

☆ Fed's Barr says regulators committed to ensuring 'all deposits' are safe
▼ + stars: | 2023-03-27 | by ( Pete Schroeder | ) www.reuters.com time to read: +2 min

In prepared testimony, Fed Vice Chair for Supervision Michael Barr added that the banking system is "strong and resilient." Barr said SVB's collapse was a "textbook case of mismanagement," citing the firm's concentrated business model, exceedingly fast growth, failure to manage its interest rate risk, and reliance on uninsured deposits. Supervisors told bank senior management in October 2022 of its concern with the bank's interest rate risk profile, Barr said. He added Fed leaders in Washington were briefed on the impact of rising interest rate on some banks' financials, and SVB was highlighted. The Fed is undertaking an internal review of its supervision of the bank, and Barr said he welcomes external reviews as well.

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