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Global shares were stuck around two-month lows and Wall Street indexes closed nearly flat and narrowly mixed. Yields on benchmark 10-year U.S. Treasuries stepped back after flirting with 16-year highs earlier in the week. Investors expected the Fed may hold interest rates higher for longer as the U.S. economy continued to show strength. Attention now turns to the Fed and other top central banks' annual gathering in Jackson Hole, Wyoming. Investors will scrutinise a speech from Fed Chair Jerome Powell next Friday for clues about the interest rate outlook.

Persons: Brendan McDermid, Jackson Hole WASHINGTON, Treasuries, Blake Emerson, Jerome Powell, Powell, Brent, Toby Chopra, Mark Potter, Nick Macfie, Diane Craft, David Gregorio Our Organizations: New York Stock Exchange, REUTERS, Jackson, Treasury, Federal Reserve, Global, Dow Jones, Nasdaq, JP Morgan Private Bank, Federal, Securities, U.S, Thomson Locations: New York City, U.S, Jackson Hole, Jackson Hole , Wyoming, Japan

[1/3] Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 24, 2023. Benchmark 10-year yields reached 4.312% in trading and tested October's 4.338%, before moving lower to 4.29%. Tighter credit conditions will eventually dampen economic activity and markets are choppy from the uncertainty," said Jeffrey Roach, chief economist for LPL Financial. Wall Street was mixed in the first half of the trading day before accelerating losses as the session ended. Brent crude was up over 1% earlier in the day before settling up 0.35% at $83.74 a barrel.

Persons: Brendan McDermid, Yen, Jeffrey Roach, Bill Adams, Brent, Ankur Banerjee, Alun John, Anisha, Sonali Paul, Angus MacSwan, Chizu Nomiyama, Nick Macfie, Cynthia Osterman Organizations: New York Stock Exchange, REUTERS, Treasury, Federal, LPL Financial, Dow Jones, Nasdaq, U.S . Labor Department, Comerica Bank, Zhongzhi Enterprise Group, Thomson Locations: New York City, U.S, CHINA, China, China's, Singapore, London, Bengaluru

The rule, which would implement a 2017 agreement by global regulators, aims to overhaul how banks gauge their riskiness, and in turn how much money they must keep on hand. Industry opponents have already begun to criticize the plan as banks seek to soften, delay, or otherwise derail the government's long-planned effort. The proposal would see U.S. regulators implement a previous global agreement via the Basel Committee on Banking Supervision. "Bank capital is critical," said Dennis Kelleher, president and CEO of Better Markets, which advocates for tougher financial rules. "However, maximizing Wall Street’s bonuses depends on minimizing capital and that’s why Wall Street fights to prevent regulators from requiring them to have enough capital."

Persons: it’s, Ian Katz, JPMorgan Chase, Morgan Stanley, Michael Barr, Barr, Joe Biden, Dennis Kelleher, Pete Schroeder, Susan Heavey Organizations: Federal Deposit Insurance Corporation, Federal, Industry, Washington, Capital Alpha Partners, JPMorgan, Banking Supervision, Citizens Financial, Bank, Better, Thomson Locations: U.S, Basel, Huntington, that’s

[1/3] FILE PHOTO: A sign is displayed on the Morgan Stanley building in New York U.S., July 16, 2018. REUTERS/Lucas Jackson/File PhotoNEW YORK, July 25 (Reuters) - U.S. banking giants may take up to four years to set aside profits to meet new capital rules, according to a report by Morgan Stanley. U.S. banking regulators will on Thursday unveil a sweeping proposal for stricter bank capital requirements known as the "Basel III endgame" aimed at ensuring the stability of big banks under international rules rolled out after the 2008 financial crisis. Holding more RWA will require banks to set aside more capital under the new standards. Most of the need to raise capital would come from assessments of the bank's operational risks and their trading books.

Persons: Morgan Stanley, Lucas Jackson, Betsy Graseck, Goldman Sachs, JPMorgan Chase, Morgan, Michael Barr, Tatiana Bautzer, Pete Schroeder, Lananh Nguyen, Chris Reese Organizations: New York U.S, REUTERS, Citigroup, JPMorgan, Bank of America, Federal, Federal Reserve, Federal Deposit Insurance Corporation, Thomson Locations: New York, Basel, Washington

That special fee, which the FDIC proposed in May, would be assessed based on their uninsured deposits at the end of 2022. The regulator said some banks were "not reporting estimated uninsured deposits in accordance with the instructions." A July 6 report by S&P Global noted 55 banks restated their fourth-quarter uninsured deposits in FDIC reports, more than twice the norm. Specifically, the FDIC reminded banks they must report uninsured deposits backed by pledged assets as well as uninsured deposits held at their own subsidiaries. “Earlier this year, we identified certain internal or intra-bank accounts that shouldn’t have been reported,” Bank of America spokesman Bill Halldin said.

Persons: Zions, Paul Burdiss, Bill Halldin, Bank spokespeople, Niket, Pete Schroeder, Tatiana Bauzer, Shweta Agarwal, Megan Davies Organizations: U.S, Federal Deposit Insurance Corporation, Valley Bank, FDIC, P Global, Bank of America, ” Bank of America, P, Huntington National Bank, Bank, Bank Policy Institute, Thomson Locations: Bengaluru, Washington

The proposal, which will kick off an ambitious agenda for Barr, plans to fully implement the globally agreed Basel bank capital agreement. BANKING OPPOSITIONThe banking industry is not waiting for details before trying to disrupt the effort, arguing it could hinder economic activity, curb lending, and kill lines of business. The criticism is also emerging among some Republican bank regulators, who appear likely to oppose the plans. Regulators will have to digest numerous and voluminous comments from the banking industry dissecting their plans. And in the meantime, banks are expected to continue hammering that higher capital requirements means a smaller economic role for banks and are not needed.

Persons: Michael Barr, Barr, Michael Barr's, Isaac Boltansky, Spokespeople, Kevin Fromer, Jerome Powell, Powell, Republican Andy Barr, Bill Foster, Tim Scott, Michelle Bowman, Barr's, Morgan Stanley, James Gorman, Pete Schroeder, Megan Davies, Andrea Ricci Organizations: Banking, Fed, Federal Deposit Insurance Corporation, Office, FDIC, Financial Services, Financial Services Committee, Republican, Senate, Committee, Regulators, White, Thomson Locations: Basel

WASHINGTON, July 19 (Reuters) - The Federal Reserve said on Wednesday it fined Deutsche Bank and its U.S. affiliates $186 million for failing to sufficiently address money laundering and other shortcomings flagged by the U.S. central bank. The Fed identified the previous issues in 2015 and 2017 consent orders, which stemmed from deficient controls in Deutsche's relationship with the Estonian branch of Danske Bank which ended in 2015. In December, Danske Bank pleaded guilty to a bank fraud conspiracy and agreed to forfeit $2 billion to settle a long-running Department of Justice probe into billions of dollars of illicit payments. In its latest order, the Fed said it found a "significant portion" of the $276 billion in transactions Deutsche cleared for Danske involved "high-risk non-resident customers." Shortcomings in Deutsche's policies on money laundering persisted after its relationship with Danske ended in 2015, the Fed said.

Persons: Biden, Danske, Pete Schroeder, Richard Chang Organizations: Federal, Deutsche Bank, U.S, Fed, Danske Bank, of Justice, Danske, Thomson Locations: Estonian, Estonia, Russia

Federal banking regulators are expected to introduce proposals in the coming weeks requiring banks to keep more cash on hand to ensure the financial system remains stable. The nation's largest lender may increase prices or abandon some products as a way to offset the higher capital costs, Barnum said. One key new expected rule would require banks to hold more capital against certain trades. Meanwhile, banks are staying cautious and preserving capital until there is more clarity around the rules. Wells Fargo was expecting capital requirements to climb and weighing the potential effect on stock buybacks, CEO Charlie Scharf told investors on its call.

Persons: Michael Barr, Jeremy Barnum, Barnum, Jane Fraser, Wells Fargo, Charlie Scharf, Blackstone, Jamie Dimon, Pete Schroeder, Nupur Anand, Saeed Azhar, Tatiana Bautzer, Lananh Nguyen, Megan Davies, Susan Heavey Organizations: WASHINGTON, Federal, JPMorgan Chase's, JPMorgan, U.S, Treasury, Industry, Blackstone, Apollo, JPMorgan Chase, Thomson Locations: Washington, New York

Banks' commercial real estate portfolios performed better than expected, showing $65 billion in losses or 8.8% of average loan losses, slightly down on last year's 9.8%, the Fed said. "Some may ask how all the banks can get a regulatory thumbs-up when the industry just went through a period of turmoil. The test assesses whether banks would stay above the required minimum 4.5% capital ratio. The average capital ratio for the 23 banks was 10.1%, the Fed said. That compares with 9.7% last year, when the central bank tested 34 lenders against a slightly easier scenario.

Persons: Morgan Stanley, Goldman Sachs, Charles Schwab, Michael Barr, ” Barr, Banks, Barr, Lindsey Johnson, Dennis Kelleher, Ian Katz, Pete Schroeder, Caroline Valetkevich, Deepa Babington, Stephen Coates Organizations: Federal, JPMorgan Chase, Bank of America, Citigroup, Charles Schwab Corp, Deutsche Bank's, Financial Corp, U.S . Bancorp, Valley Bank, Wells, JPMorgan, Industry, Consumer Bankers Association, U.S, Treasury, T Bank, PNC Financial, Citizens Financial, Better, Fed, Capital Alpha Partners, Thomson Locations: Big U.S, Wells Fargo, U.S

Under the "stress test" exercise, the Fed tests big banks' balance sheets against a hypothetical severe economic downturn, the elements of which change annually. WHY DOES THE FED 'STRESS TEST' BANKS? It announces the size of each bank's stress capital buffer in the subsequent months. For example, the 2022 stress test envisioned a 5.8 percentage point jump in unemployment under a "severely adverse" scenario. This extra test will not count towards banks' capital requirements but will allow the Fed to explore applying multiple adverse scenarios in future.

Persons: Banks, Wells, Goldman Sachs, Morgan Stanley, Michael Barr, Pete Schroeder, Michelle Price, Andrea Ricci Organizations: U.S . Federal, Big, Fed, Citigroup, Bank of America, JPMorgan Chase &, Goldman Sachs, Deutsche Bank's U.S, JPMorgan Citigroup, Wells Fargo & Co, Bank, U.S, Treasury, Thomson Locations: Big U.S, Silicon

Under the "stress test" exercise, the Fed tests banks' balance sheets against a hypothetical severe economic downturn, the elements of which change annually. WHY DOES THE FED "STRESS TEST" BANKS? It typically publishes aggregate industry losses, and individual bank losses including details on how specific portfolios - like credit cards or mortgages - fared. It announces the size of each bank's stress capital buffer in the subsequent months. For example, the 2022 stress test envisioned a 5.8 percentage point jump in unemployment under a "severely adverse" scenario.

Persons: Banks, Wells, Goldman Sachs, Morgan Stanley, Michael Barr, Pete Schroeder, Michelle Price, Andrea Ricci Organizations: U.S . Federal, Fed, Citigroup, Bank of America, JPMorgan Chase &, Goldman Sachs, Deutsche Bank's U.S, JPMorgan Citigroup, Wells Fargo & Co, Bank, U.S, Treasury, Thomson Locations: Silicon

The central bank on Wednesday will release the results of its bank "stress tests" which assess how much capital banks would need to withstand a severe economic downturn. The annual exercise, introduced following the 2007-2009 financial crisis, is integral to banks' capital planning, dictating how much cash they can return to shareholders via dividends and share buybacks. Despite the turmoil, and the exam being the hardest in years, bank analysts and executives expect the 23 lenders being tested will show capital in excess of regulatory minimums. While that will not affect capital, it will be used to assess potentially employing multiple scenarios in future stress test exercises. "In an environment of ever-changing risks, stress tests can quickly lose their relevance if their assumptions and scenarios remain static," said Barr in December.

Persons: Nick Zieminski WASHINGTON, JPMorgan Chase, Goldman, Morgan Stanley, jitters, Wells, Jefferies, Randal Quarles, Michael Barr, Barr, Pete Schroeder, Michelle Price, Deepa Babington Organizations: Citibank, REUTERS, Big U.S, Bank, U.S, Treasury, Citigroup Inc, Bank of America, JPMorgan, Goldman Sachs, Capital, U.S . Bancorp, Citizens, Fed, Bank Policy Institute, RBC, Thomson Locations: Jackson, Queens, New York City, U.S, Big, Silicon, Wells Fargo, Washington

WASHINGTON, June 22 (Reuters) - The head of the Federal Deposit Insurance Corporation said Thursday that bank regulators are considering applying an upcoming set of stricter capital rules to banks with over $100 billion in assets. "If we had any doubt that the failure of banks in this size category can have financial stability consequences, that has been answered by recent experience," he said in prepared remarks. "The lesson to take away is that banks in this size category can pose genuine financial stability risks." He added agencies will propose new capital rules to implement an international bank rule agreement in the near future, but will likely not complete the rules before the middle of 2024. But Gruenberg argued it was critical, particularly in the wake of the spring bank failures, for regulators to get tougher rules in place.

Persons: Martin Gruenberg, Gruenberg, Pete Schroeder, Nick Zieminski Organizations: Federal Deposit Insurance Corporation, Thomson Locations: Basel, U.S

Bank regulators led by the U.S. Federal Reserve are finalizing the proposal which would implement international capital standards agreed by the Basel Committee on Banking Supervision in the aftermath of the 2007-2009 financial crisis. On Wednesday, Fed Chair Jerome Powell told Congress it was critical banks have strong capital, but regulators must be mindful of the tradeoffs. Republican officials at the agencies have flagged similar concerns, two people said, while Republican lawmakers on Wednesday also raised worries over capital rules with Powell. The Fed is drafting the Basel rules with the Office of the Comptroller of the Currency (OCC) and Federal Deposit Insurance Corp. (FDIC). Speaking to reporters last week, acting Comptroller Michael Hsu said banks had "not been shy about sharing their concerns" which regulators were taking into account.

Persons: Morgan Stanley, Andrew Kelly, Jerome Powell, Michael Barr, Isaac Boltansky, jitters, Powell, “, Kevin Fromer, It's, Michael Hsu, Pete Schroeder, Niket Nishant, Lananh Nguyen, Tatiana Bautzer, Michelle Price, David Gregorio Organizations: New York Stock Exchange, REUTERS, WASHINGTON, Bank, U.S . Federal, Banking, Bankers, Committee, American Express, U.S, UBS, Deutsche Bank, Barclays, Washington, Bank Policy Institute, WALL, Fed, Industry, Republican, Financial Services, Currency, Federal Deposit Insurance Corp, Regulators, FDIC, OCC, Thomson Locations: Manhattan , New York City, U.S, Basel, Silicon

WASHINGTON, June 21 (Reuters) - U.S. Federal Reserve Chair Jerome Powell on Wednesday said it is critical that banks have high levels of capital, but regulators must be mindful of the tradeoffs in ordering large reserves. Powell told the House Financial Services Committee that the Fed is considering multiple proposals on bank oversight, and struck a balanced tone on new capital requirements, saying healthy cushions are of "central importance," particularly for the largest global banks. We want banks to be able to lend in good and bad times," he said. Powell said the Fed has a "significant number of proposals in the works" on bank oversight, but none have been finalized or brought to the board for a vote yet. He also noted that higher capital requirements do come with tradeoffs, and the Fed will have to strike a balance between higher capital and how it could hinder bank lending.

Persons: Jerome Powell, Powell, Pete Schroeder, Mark Porter, Andrea Ricci Organizations: . Federal, Financial Services Committee, Fed, Thomson

[1/2] A U.S. flag flies outside a branch of the Silicon Valley Bank in Wellesley, Massachusetts, U.S., March 13, 2023. REUTERS/Brian SnyderWASHINGTON, June 20 (Reuters) - The U.S. Justice Department antitrust division plans to expand the scope of its bank merger review process, the department's chief said on Tuesday, in a sign the agency may get tougher when scrutinizing such deals. The comments are likely to disappoint the industry, which had been hoping Democratic President Joe Biden's administration would be more open to allowing deals after a spate of bank failures since March. Specifically, Kanter said any merger review for antitrust purposes must go beyond traditional factors like the impact on local depositors and branches, and consider a broader set of issues. "We believe this policy change will not be as negative for bank mergers as it may first appear," he added.

Persons: Brian Snyder WASHINGTON, Jonathan Kanter, Joe Biden's, Kanter, Biden, Isaac Boltansky, Cowen, Jaret Seiberg, Pete Schroeder, Deepa Babington, Michelle Price Organizations: Bank, REUTERS, U.S . Justice Department, Brookings Institution, Democratic, Justice Department, Silicon Valley Bank, DOJ, Thomson Locations: U.S, Wellesley , Massachusetts, Silicon

REUTERS/Brian SnyderWASHINGTON, June 20 (Reuters) - The head of the U.S. Justice Department's antitrust division on Tuesday urged the government to update bank merger guidelines to reflect "current market realities," in a sign authorities are likely to cast a wider net in scrutinizing deals in the sector. “There are good reasons ... to question whether the 1995 guidance sufficiently reflects current market realities," he said in a speech at the Brookings Institution, a think tank. "What we're saying is market realities have shifted, and when we apply the law, we have an obligation to ensure we are addressing the world as it exists today." President Joe Biden signed an executive order in 2021 directing the Justice Department to work with bank regulators to update merger guidelines and heighten scrutiny of deals. In his remarks, Kanter said he was focused on the antitrust implications of any bank mergers, and that broader factors were best left to the primary bank regulators to consider.

Persons: Brian Snyder WASHINGTON, Jonathan Kanter, Biden, Kanter's, Kanter, hasn't, Joe Biden, Pete Schroeder, Deepa Babington Organizations: Bank, REUTERS, U.S . Justice, Brookings Institution, Department, Justice Department, Silicon Valley Bank, Thomson Locations: U.S, Wellesley , Massachusetts, Silicon

WASHINGTON, June 16 (Reuters) - The U.S. Senate Banking Committee will consider a bill Wednesday that would allow regulators to claw back compensation for executives at failed banks. The bill, which also would require banks to include in their bylaws standards around responsible bank management, comes in response to the abrupt failures of Silicon Valley Bank and other banks in recent months, which set off broader turmoil in the banking sector. "Americans have watched executives take their money, run banks into the ground, and get away with it too many times before. It’s time for CEOs to face consequences for their actions, just like everyone else," said Brown in a statement. Reporting by Pete Schroeder, editing by Deepa BabingtonOur Standards: The Thomson Reuters Trust Principles.

Persons: Sherrod Brown, Tim Scott, Brown, Pete Schroeder, Deepa Babington Organizations: U.S . Senate, Republican, Valley Bank, Thomson

WASHINGTON, June 13 (Reuters) - A key House Republican lawmaker said Tuesday that he intends to hold a committee vote on a comprehensive bill to establish a regulatory framework for cryptocurrency products in the coming weeks. Representative Patrick McHenry, chairman of the House Financial Services Committee, said he expects to put a bill forward for the panel to consider after lawmakers return to work on July 11. McHenry has been leading an effort by some Republicans in Congress to pass a bill establishing clear rules for the crypto industry. Democrats on the panel say they are considering the measure but have concerns. And in the Senate, which must also pass any crypto legislation, key lawmakers like Senators Sherrod Brown and Elizabeth Warren have expressed even more skepticism about crypto products.

Persons: Patrick McHenry, McHenry, Maxine Waters, Sherrod Brown, Elizabeth Warren, Pete Schroeder Organizations: Republican, Financial Services, Securities and Exchange Commission, Thomson

WASHINGTON, June 2 (Reuters) - The U.S. Securities and Exchange Commission announced Friday it had dismissed 42 pending enforcement cases after discovering enforcement staff had improper access to materials meant for commission officials ruling on those cases. The enforcement and in-house ruling arms of the SEC are supposed to be kept completely separate from each other regarding such matters. It added that in most cases, the problematic materials were not uploaded to enforcement staff until after a decision had been handed down. An internal SEC review found that there was no evidence that the improper access had any effect on decisions made by either enforcement staff or officials reviewing those cases, according to SEC officials. Nonetheless, the agency decided to dismiss all pending cases, primarily against individuals and smaller firms, who were impacted by the improper access.

Persons: Pete Schroeder, Chizu Nomiyama, Diane Craft Organizations: U.S . Securities, Exchange Commission, SEC, Thomson

WASHINGTON, May 31 (Reuters) - U.S. banks saw total deposits decline by a record 2.5% in the first quarter of 2023, and industry-wide profits were relatively flat after taking into account the effects of two large bank failures, the Federal Deposit Insurance Corporation said Wednesday. The FDIC said the $472 billion in deposit outflows in the first quarter was the largest it had recorded since it began collecting such data in 1984. The decline was primarily from uninsured funds, as insured deposits actually rose $255.1 billion, or 2.5%, amid the failures of Silicon Valley Bank and Signature Bank. The decline in deposits was offset by increased wholesale funding, which rose 14.4% in the first quarter. The results showed banks shrinking the amount of unrealized losses on their books and maintaining strong capital ratios.

Persons: Martin Gruenberg, Gruenberg, Pete Schroeder, Sinead Carew, Nick Zieminski Organizations: Federal Deposit Insurance Corporation, FDIC, Valley Bank, Signature Bank, First Republic Bank, Comerica, Citizens, Thomson

Senator Elizabeth Warren is questioning federal bank regulators on their decision to sell First Republic Bank to the nation's largest bank, JP Morgan Chase. In a letter sent to the Office of the Comptroller of the Currency and Federal Deposit Insurance Corporation Wednesday, Warren said the deal was "deeply troubling," and sought details on how the agencies decided to arrange that particular sale, allowing JPM to grow even larger. This is a troubling outcome, leaving me with numerous questions," she wrote. The FDIC announced this month it had seized First Republic and sold it to JPM in a deal that it estimated would cost its deposit insurance fund $13 billion. Warren also pressed the matter with Michael Hsu, the acting Comptroller of the Currency, at a hearing Thursday.

WASHINGTON, May 15 (Reuters) - Top U.S. banking regulators plan to tell lawmakers the government will be open to future bank mergers, but are committed to establishing tougher rules after recent turmoil. Barr maintained his commitment to overhauling bank rules to ensure firms do not escape stricter oversight because they are smaller or viewed as less risky. "The prudential regulation and supervision of these institutions merits additional attention, particularly with respect to capital, liquidity, and interest rate risk," he said in prepared testimony. While vowing to draft tougher rules, the agencies have also been criticized for not identifying and preventing weaknesses before the lenders failed. In prepared testimony, he said rapid interest rate increases and social media-fueled rumors drove the "unprecedented" bank run that sank his firm.

WASHINGTON, May 15 (Reuters) - A U.S. banking regulator plans to tell lawmakers his agency is "open-minded" when it comes to potential bank mergers and would act on any proposed deal in a timely fashion. Recent turmoil has added "urgency" to the OCC's work on updating bank merger guidelines, Hsu said. Tuesday's hearing will be the first for regulators since the FDIC agreed to sell failed First Republic Bank to JPMorgan Chase & Co (JPM.N) this month. Watchdogs have been under intense scrutiny after the collapses of SVB and Signature set off fears of contagion. In prepared testimony, he said rapid interest rate increases and social media-fueled rumors drove the "unprecedented" bank run that sank his firm.

In prepared testimony published on Monday by the Senate Banking Committee, Becker said he believed the bank was responsive to regulator concerns about managing risk and working to address issues before an "unprecedented" bank run led to its failure. Becker said he did not believe "that any bank could survive a bank run of that velocity and magnitude." The former executives for New York-based Signature Bank, which also failed in March, maintained the bank could have survived had regulators not chosen to close it, according to separate testimony. California banking regulators moved quickly to shut SVB down on March 10 after depositors withdrew $42 billion in 24 hours. Regulators closed Signature on March 12 after it also experienced liquidity issues following SVB’s collapse.

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