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☆ White House preparing call for new bank rules - WaPo
▼ + stars: | 2023-03-29 | by ( ) www.reuters.com time to read: +1 min

WASHINGTON, March 29 (Reuters) - The White House is readying plans to push federal banking regulators to impose new rules on midsize banks after the collapse of Silicon Valley Bank earlier this month, the Washington Post reported on Wednesday, citing two people familiar with the preparations. The planned recommendations for Democratic U.S. President Joe Biden would push for rules to be reinstated for banks with between $100 billion and $250 billion that were deregulated by Congress and the Federal Reserve during former Republican President Donald Trump's administration, the Post said. Representatives for the White House could not be immediately reached for comment on the reported plans. Potential moves include requiring banks to have higher capital requirements, more safe assets relative to riskier loans, and crisis-ready plans for dissolution as well as more frequent so-called stress tests, the Post reported. Writing by Susan Heavey in Washington; additional reporting by Shivani Tanna in Bengaluru; Editing by Jan Harvey and Louise HeavensOur Standards: The Thomson Reuters Trust Principles.

☆ Premarket stocks: Five big takeaways from the Fed's extraordinary meeting
▼ + stars: | 2023-03-23 | by ( Nicole Goodkind | ) edition.cnn.com time to read: +9 min

New York CNN —The Federal Reserve raised interest rates by a quarter percentage point on Wednesday as it attempts to fight stubbornly high inflation while addressing risks to financial stability. Powell said that the central bank anticipates growth will slow and inflation will decline gradually this year and next year. Before the banking crisis, the Fed was fairly certain that more rate hikes would be coming in the future. But markets tend to be fickle after Fed meetings and traders’ opinions of the meeting could change in early trading. Norway and Switzerland hiked rates earlier Thursday, and the Bank of England is expected to do so too at 8a ET.

☆ Treasury will do whatever it takes to ensure 'savings remain safe,' Yellen tells senators
▼ + stars: | 2023-03-22 | by ( Christina Wilkie | ) www.cnbc.com time to read: +2 min

U.S. Secretary of the Treasury testifies before the Senate Appropriations Subcommittee on Financial Services March 22, 2023 in Washington, DC. WASHINGTON — Federal bank regulators are prepared to do whatever is needed to "ensure that depositors' savings remain safe" in U.S. banks, Treasury Secretary Janet Yellen told members of the Senate Appropriations Committee on Wednesday. These actions included guarantees on uninsured deposits at the failed banks, and the creation of new liquidity sources for smaller banks experiencing a rush of withdrawals. Thanks in large part to these actions, "aggregate deposit outflows from regional banks have stabilized," Yellen told a bankers group Tuesday. Yellen and her deputies have so far said any blanket guarantee of uninsured deposits would require extraordinary circumstances, and likely an act of Congress.

☆ Elizabeth Warren demands Fed crackdown on large regional banks
▼ + stars: | 2023-03-22 | by ( Matt Egan | ) edition.cnn.com time to read: +5 min

New York CNN —Senator Elizabeth Warren is cranking up the pressure on the Federal Reserve following the collapse of Silicon Valley Bank. Both Silicon Valley Bank and Signature Bank fit into that asset threshold when they failed earlier this month. The bipartisan 2018 rollback of Dodd-Frank freed large regional banks in that range of assets from the toughest oversight. Notably, the letter was signed by Senator Angus King, the Maine independent who voted in favor of the 2018 rollback. Days after the bank failures, the Federal Reserve launched a review of the regulation and oversight of Silicon Valley Bank.

☆ What credit ratings have to do with the fallout at Silicon Valley Bank and First Republic — and why they matter so much to banks
▼ + stars: | 2023-03-16 | by ( Huileng Tan | ) www.businessinsider.com time to read: +8 min

As panic shoots across the banking sector, US banks' credit ratings have come under the spotlight, and investors are zooming in on how these institutions are graded. Moody's, S&P Global, and Fitch are three big credit ratings agencies that control about 95% of the credit ratings in the financial markets. In fact, during the global financial crisis, credit ratings agencies had been blasted for giving better ratings to risky mortgage-backed securities and collateralized loans. Fears of the crisis spreading have also hit the credit ratings of First Republic Bank. First Republic Bank is now considering various options —including a sale – Bloomberg reported Wednesday, citing people with knowledge of the matter.

☆ Deposit insurance is addiction not medication
▼ + stars: | 2023-03-16 | by ( John Foley | ) www.reuters.com time to read: +7 min

NEW YORK, March 16 (Reuters Breakingviews) - Deposit insurance is as American as apple pie, and twice as unhealthy. Bank deposits in the United States are guaranteed up to $250,000, and over 90% of SVB’s accounts held more than that sum. Alternatively, regulators could invite the market to provide a solution – say, with privately funded insurance for deposits over the guaranteed limit. The trouble is that deposit insurance is like Novocaine – the higher the dose, the more the patient becomes numb. For that reason the best option is probably to do nothing – or better still, lower the deposit insurance limit.

☆ First Republic Bank, which was downgraded to junk by S&P and Fitch, is looking at a possible sale: Bloomberg
▼ + stars: | 2023-03-16 | by ( Huileng Tan | ) www.businessinsider.com time to read: +2 min

Ratings agencies S&P Global and Fitch cut First Republic's credit rating to junk status. The bank is now considering various options, including a sale and boosting liquidity Bloomberg reported. The bank is expected to attract interest from larger lenders if it goes on sale, per Bloomberg. Ratings agencies S&P Global and Fitch had cut First Republic's credit rating to junk status earlier on Wednesday due to concerns that depositors could pull funds from the lender. First Republic Bank did not immediately respond to Insider's request for comment sent outside regular business hours.

☆ How Credit Suisse and SVB are connected: Fear
▼ + stars: | 2023-03-15 | by ( Allison Morrow | ) edition.cnn.com time to read: +2 min

Credit Suisse shares crashed more than 20% in Zurich after the bank’s biggest shareholder chose not to increase its funding, dragging down European bank stocks along with it. Why are traders seeing a connection between the Credit Suisse turmoil and the collapse of two US banks last week? “Credit Suisse has been a slowing-moving car crash for years,” wrote Peter Boockvar, chief investment officer of Bleakley Financial Group. Customers withdrew billions from Credit Suisse last year, contributing to the bank’s biggest annual loss since the financial crisis in 2008. In short, the collapse of Silicon Valley Bank didn’t cause Credit Suisse to stumble, but it did put the embattled bank under even more intense scrutiny.

☆ First Republic Bank downgraded to junk by S&P and Fitch on risk of clients pulling deposits in the wake of SVB failure
▼ + stars: | 2023-03-15 | by ( Carla Mozée | ) www.businessinsider.com time to read: +4 min

First Republic Bank's credit ratings were cut to junk status at S&P Global and Fitch on Wednesday. Fitch said First Republic's deposits hold risks in concentrating on wealthy, coastal clients. The downgrades arrived during a frenzied time of trading in shares of First Republic Bank and other regional banks after last week's seizure of Silicon Valley Bank by regulators. S&P said all of its ratings on First Republic are on "negative" credit watch, signaling further downgrades are possible. Meanwhile, Fitch Ratings downgraded its long-term issuer default rating on First Republic to BB from A- and placed it and other ratings on negative watch.

☆ CFPB: What it does and why its future is in question
▼ + stars: | 2023-03-03 | by ( Jeanne Sahadi | ) edition.cnn.com time to read: +6 min

The CFPB’s missionThe agency was created after the 2008 financial meltdown, as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The broad purpose of the CFPB is to protect consumers from financial abuses and to serve as the central agency for consumer financial protection authorities. It is charged with implementing and enforcing consumer protection laws, making rules and issuing guidance for consumer financial institutions. And it is the place consumers can go to lodge complaints about financial products and services. “It has completely changed the consumer financial marketplace.

☆ Column: Where to park the 401(k) when you switch jobs or retire
▼ + stars: | 2023-02-09 | by ( Mark Miller | ) www.reuters.com time to read: +5 min

When you change jobs or retire, you have three basic choices: leave your retirement account where it is, roll it over to a new employer or move it to a standalone individual retirement account (IRA). When does it make sense to leave a 401(k) plan behind? A rollover can make sense if you are in a 401(k) plan with poor investment choices or high fees. FOCUS ON THE FEESPew analyzed the difference between average institutional and retail share class expense ratios across all mutual funds that offered at least one institutional share class and one retail share class in 2019. There is also a case to be made for staying in your 401(k) plan - especially if you work for a large employer.

☆ Inflation: Fed's Neel Kashkari says prices are still too high
▼ + stars: | 2023-02-07 | by ( Paul R. La Monica | ) edition.cnn.com time to read: +4 min

New York CNN —Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, understands that consumers are still struggling to deal with high prices. Kashkari told CNN’s Poppy Harlow Tuesday that he knows first hand how expensive many consumer goods and services are. Job market strength fueling more inflationKashkari acknowledged that inflation pressures are easing, but said the Fed is still not comfortable with how high prices are, particularly for services. He told Harlow he’s penciling in short-term rates as high as 5.4% before pausing. It’s hard to have a recession when the job market is still so robust, he told Harlow.

☆ U.S. Fed probes Goldman Sachs consumer business - WSJ
▼ + stars: | 2023-01-20 | by ( ) www.reuters.com time to read: +1 min

Jan 20 (Reuters) - The U.S. Federal Reserve is probing the consumer business of Goldman Sachs Group Inc (GS.N) to determine whether the bank had appropriate safeguards in place as it ramped up lending, the Wall Street Journal reported on Friday, citing people familiar with the matter. The central bank is concerned the Wall Street giant did not have proper monitoring and control systems inside Marcus, its consumer unit, as it grew larger, the report said. "The Federal Reserve is our primary federal bank regulator and we do not comment on the accuracy or inaccuracy of matters relating to discussions with them," a Goldman spokesperson told Reuters. Bloomberg News reported in September that the bank's Marcus unit was facing a Fed review. Goldman's credit card business is also being investigated by the Consumer Financial Protection Bureau (CFPB), the bank disclosed last year.

☆ Goldman Sachs slips on report that the Federal Reserve is investigating its Marcus business
▼ + stars: | 2023-01-20 | by ( Carmen Reinicke | ) www.cnbc.com time to read: +1 min

David Solomon, Chairman & CEO of Goldman Sachs, speaking on Squawk Box at the WEF in Davos, Switzerland on Jan. 23rd, 2023. Goldman is now up less than 1% on the year. Goldman Sachs shares came under pressure Friday after a Wall Street Journal report said the Federal Reserve is investigating the bank's consumer business. "As we told the Wall Street Journal, the Federal Reserve is our primary federal bank regulator and we do not comment on the accuracy or inaccuracy of matters relating to discussions with them," a company spokesperson told CNBC. Just days ago, Goldman CEO David Solomon admitted that the bank suffered a disappointing quarter in part because it took on too much in the consumer banking business.

☆ Big Banks Might Face Breakup, Top Regulator Says
▼ + stars: | 2023-01-17 | by ( Andrew Ackerman | ) www.wsj.com time to read: 1 min

WASHINGTON—Big banks may need to be broken into smaller pieces if they become too big to manage and are unable to fix significant regulatory lapses, a top federal banking regulator said in a warning shot across Wall Street on Tuesday. A bank’s failure to resolve longstanding deficiencies despite reprimands from its regulators and onerous restrictions such as caps on its growth are evidence that a firm is unmanageable and needs to be broken up, acting Comptroller of the Currency Michael Hsu said.

☆ Goodbye FTX Arena: Miami Heat Stadium Ditches Crypto Sponsor
▼ + stars: | 2023-01-12 | by ( Joseph De Avila | ) www.wsj.com time to read: 1 min

A federal bankruptcy judge approved the termination of the contract between Miami-Dade County and FTX that gave the cryptocurrency exchange naming rights for the home of the Miami Heat. Judge John Dorsey on Wednesday approved Miami-Dade and FTX’s request to end the deal. Miami-Dade will no longer refer to the venue, the downtown Miami sports facility that is owned by the county, as FTX Arena, according to the agreement, and the county will remove all off-site public references to the former name.

☆ 'Contagion risk': After the FTX collapse, top U.S. regulators warn banks about crypto
▼ + stars: | 2023-01-06 | by ( Mike Winters | ) www.cnbc.com time to read: +2 min

Without mentioning recent implosion of the crypto exchange FTX by name, regulators said that due to poor oversight, crypto-asset companies are a "contagion risk" for banks. They cited other concerns, too, such as frauds or scams, legal uncertainties around custody of crypto assets, and misleading statements by crypto firms. Federal bank regulators warned banks about investing in crypto this week, in what might be a prelude to more aggressive regulations to come. While regulators warned that "risk management and governance practices" in crypto space lack "maturity and robustness," they stopped short of announcing new rules or regulations for banks that invest in crypto assets. Much more needs to happen when it comes to regulation, Schwed adds, but he doesn't expect "anything sweeping" this year.

☆ Special Report: Boy Scouts, Catholic dioceses find haven from sex abuse suits in bankruptcy
▼ + stars: | 2022-12-30 | by ( Kristina Cooke Mike Spector Benjamin Lesser Dan Levine Disha Raychaudhuri | Kristina Cooke | Mike Spector | ) www.reuters.com time to read: +19 min

The Boy Scouts, for instance, said on a website the group set up for restructuring that it launched a “comprehensive noticing campaign” in the media. He sought compensation in the Boy Scouts bankruptcy in June, long after a deadline of November 16, 2020 for filing claims. The Boy Scouts bankruptcy reorganization plan, approved by a judge in September, halts all lawsuits against the Boy Scouts, local councils, churches and other organizations that chartered scouting activities. His case was halted by the Boy Scouts bankruptcy. Later that year, in August, he filed his lawsuit against defendants including a Boy Scouts local council and DeSandre.

☆ JP Morgan 'pulled the levers' of Jeffrey Epstein's sex-trafficking operation, US Virgin Islands says in new lawsuit
▼ + stars: | 2022-12-29 | by ( Jacob Shamsian | ) www.businessinsider.com time to read: +5 min

A new lawsuit alleges JP Morgan facilitated Jeffrey Epstein's sex-trafficking scheme. Earlier this year, the US Virgin islands settled a separate lawsuit, first brought in 2020, with Epstein's estate and its executors. "JP Morgan ignored numerous red flags and failed to comply with federal banking regulations until years later after JP Morgan was no longer benefiting from Epstein's business," the lawsuit says. In addition to the US Virgin Islands, an anonymous "Jane Doe" filed lawsuits against JP Morgan and Deutsche Bank in November, alleging the financial institutions benefitted from Epstein's sex-trafficking operation. That same company, Hyperion Air, is identified by the US Virgin Islands Attorney General as one of Epstein's accounts with JP Morgan.

He voted against the Puerto Rico Status Act on the floor last week, calling for "letting a full and robust legislative process take place." One of the bill’s main negotiators, Rep. Nydia Velázquez, D-N.Y., the first Puerto Rican woman elected to Congress, is confident about more congressional hearings on Puerto Rico's territorial status in the new year. That’s intentional, said Resident Commissioner Jenniffer González-Colón, a Republican nonvoting member of Congress representing Puerto Rico who favors statehood and helped negotiate the Puerto Rico Status Act. What’s next for Puerto Rico’s territorial status? Excluding Puerto Rico’s territorial status also gives Wicker and others pause.

The House voted Thursday in favor of the Puerto Rico Status Act, which seeks to resolve the U.S. territory's status and its relationship to the United States through a binding plebiscite. The Puerto Rico Status Act also lays out terms for a November 2023 binding plebiscite including all three nonterritorial status options. Lawmakers from both sides debated the merits of the Puerto Rico Status Act on the House floor Thursday. While Democrats insisted the legislation is a significant step toward Puerto Rico's decolonization, Republicans worried over the economic implications of changing Puerto Rico's status. Venator- Santiago, who has been tracking Puerto Rico legislation in Congress for years, said this is the first time since 2010 that the House votes in favor of legislation dealing with changes to Puerto Rico’s territorial status.

☆ U.S. lawmakers press federal banking regulators on the industry’s exposure to crypto after Alameda stake in bank comes to light
▼ + stars: | 2022-12-08 | by ( Chelsey Cox | ) www.cnbc.com time to read: +3 min

Top Senate Democrats pressed key banking regulators on possible ties between the industry and digital currency exchanges following the bankruptcy of major cryptocurrency firm, FTX. "Banks' relationships with crypto firms raise questions about the safety and soundness of our banking system and highlight potential loopholes that crypto firms may try to exploit to gain further access." Silvergate Capital Corp., Provident Bancorp Inc., Metropolitan Commercial Bank, Signature Bank, Customers Bancorp Inc. are among several noted banks experiencing heightened volatility after the FTX failure. "Banks' relationships with crypto firms raise questions about the safety and soundness of our banking system and highlight potential loopholes that crypto firms may try to exploit to gain further access to banks," the senators wrote. To better understand the banking industry's exposure to crypto, the senators asked for responses to a roster of questions, including all business relationships between FTX, Alameda and Moonstone, by Dec. 21.

John Ray, chief executive officer of FTX Cryptocurrency Derivatives Exchange, arrives at bankruptcy court in Wilmington, Delaware, US, on Tuesday, Nov. 22, 2022. It could be one way for the DOJ to gather evidence of alleged fraud. In a filing in Delaware federal bankruptcy court, Andrew Vara, a U.S. bankruptcy trustee, told the court that the allegations of corporate misconduct and complete failure merited an immediate and speedy examination of the events leading up to FTX's stunning collapse three weeks ago. It's not unusual to appoint a bankruptcy examiner. There was one to oversee the crypto bankruptcy process of Celsius Network, for example.

FTX suffered a “complete failure of corporate controls” that culminated in an “unprecedented” debacle, its new chief executive said. In a filing to federal bankruptcy court, John J. Ray , who has helped oversee some of the biggest bankruptcies ever, including Enron’s, said he’s never seen anything as bad in 40 years of restructuring firms.

FTX suffered a “complete failure of corporate controls” that culminated in an “unprecedented debacle,” its new chief executive officer said Thursday. John J. Ray , who has helped oversee some of the biggest bankruptcies ever, including Enron’s, said in a filing to federal bankruptcy court that he has never seen anything as bad in 40 years of restructuring firms.

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