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☆ Goldman Sachs cuts GDP forecast because of stress on small banks, which are key to U.S. economy
▼ + stars: | 2023-03-15 | by ( Pia Singh | ) www.cnbc.com time to read: +2 min

Photo illustration, the Silicon Valley Bank logo is visible on a smartphone, with the stock market index in the background on the personal computer on March 14, 2023, in Rome, Italy. Goldman Sachs on Wednesday lowered its 2023 economic growth forecast, citing a pullback in lending from small- and medium-sized banks amid turmoil in the broader financial system. "Small and medium-sized banks play an important role in the US economy," the analysts wrote. "Any lending impact is likely to be concentrated in a subset of small and medium-sized banks." The analysts assume that small banks with a low share of FDIC-covered deposits will reduce new lending by 40% and that other small banks will reduce new lending by 15%, leading to a 2.5% drag on total bank lending.

LONDON, March 15 (Reuters) - Central banks juggling inflation and financial stability mandates are prompting the wildest swings in bedrock government bonds for over a decade and a surge in volatility that may end up causing problems of its own. "The Fed and other central bankers have lost the luxury of focusing singularly on the fight against inflation," said Manulife Investment Management's Frances Donald. If the history of banking crashes and related credit crunches show them to be deflationary anyway, then many argue a central bank pause now may be the wisest choice. "The Fed is now fighting inflation as well as potential financial contagion," Lombard Odier Chief Investment Officer Stéphane Monier said. The first sign of regional bank stock calm on Tuesday, alongside the sticky core inflation readings for February, prompted a build-back of some bets for one last hike from each central bank.

☆ Morning Bid: Deep breaths as banks calm, but only a bit
▼ + stars: | 2023-03-15 | by ( ) www.reuters.com time to read: +5 min

The Federal Reserve is considering tougher rules and oversight for midsize banks similar in size to Silicon Valley Bank, which collapsed suddenly last week. Strengthened rules on banks in the $100 billion to $250 billion range could ape those for larger more systemic banks and involve stringent capital and liquidity requirements or beefed up annual "stress tests". Even though reports abounded of depositor flight from the smaller weaker banks to the larger financial firms, stock prices in the sector at large caught a breath. The VIX equity volatility gauge (.VIX) hugged Tuesday's close at 23. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Regulators need to report SVB executives' potential 'outrageous and indefensible' behavior to Congress to avoid mistakes made after the 2008 financial crisis, 2 top Democrats say
▼ + stars: | 2023-03-15 | by ( Juliana Kaplan | Ayelet Sheffey | ) www.businessinsider.com time to read: +5 min

Elizabeth Warren and Richard Blumenthal are calling on the SEC and DOJ to look into the collapse. "The nation's bank regulators cannot make the same mistake twice," they continued. Warren and Blumenthal wrote in their letter that "SVB officials showed a pattern of risky and questionable decision making" that may have contributed to the bank's collapse. They also noted the lack of stress tests that would have helped regulators determine whether the bank could respond to rising interest rates. But Warren has been persistent in her message, already introducing legislation alongside Rep. Katie Porter to roll back the 2018 changes.

☆ Oil tumbles 6%, heads for worst day since July as banking crisis routs markets
▼ + stars: | 2023-03-15 | by ( Fred Imbert | ) www.cnbc.com time to read: +2 min

Oil prices fell Wednesday, as traders feared a brewing banking crisis could dent global economic growth. "Now near the mid-$60s, WTI crude's plunge is at the mercy of how much worse the macro picture gets." It also raised concern over the state of the global banking system less than a week after two U.S. regional banks failed. Entering this week, traders had priced in at least a 25 basis-point rate hike. Correction: Oil was headed for its worst day since July.

If the market gyrations and Silicon Valley Bank's failure are rattling your faith in stocks, there are places to look for safety. But for cash and bond allocations, T-bills – U.S. Treasurys with maturity of one year or less – might be the ticket. The rates will adjust and correct [at some point], and these short-term rates will go back to normal," he said. When buying bank CDs, investors should be mindful of the Federal Deposit Insurance Corp.'s coverage, he said. Hans Olsen, chief investment officer of Fiduciary Trust Company, highlighted short-duration, high-quality bonds are where it's at for safety.

☆ From using multiple banks to managing VC relationships, these are the 5 lessons every founder should have learned from the Silicon Valley Bank nightmare
▼ + stars: | 2023-03-14 | by ( Julie Bort | ) www.businessinsider.com time to read: +7 min

If something happens to one bank, such as a bank run, your company won't face ruin. Silicon Valley Bank famously required such clauses as CNBC reported, for at least some of its loans. Why Silicon Valley Bank failed: SVB's management surprised the market by unveiling bad news coupled with a planned capital raise that failed, among other factors. How Silicon Valley Bank imploded: There was lots of blame to go around. More of our Silicon Valley Bank coverage can be found here.

☆ What the FDIC takeovers of SVB and Signature mean for the banks’ customers and employees
▼ + stars: | 2023-03-14 | by ( Jeanne Sahadi | ) edition.cnn.com time to read: +4 min

No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.”A similar statement was issued for customers of Signature Bank. Most SVB customers, for instance, are businesses, and they have a lot more than $250,000 on deposit because they used SVB for much of their cash management, including payroll. SVB and Signature customers will have many of the same banking conveniences that they had before their banks were taken over. So far, the FDIC has not established any end dates of services for SVB or Signature customers. Should the FDIC find a buyer for either bank, the acquiring institution will be the one deciding whether the banks’ employees stay on.

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☆ Moody's cuts outlook on U.S. banking system to negative, citing 'rapidly deteriorating operating environment'
▼ + stars: | 2023-03-14 | by ( Jeff Cox | ) www.cnbc.com time to read: +3 min

In a harsh blow to an already-reeling sector, Moody's Investors Service on Monday cut its view on the entire banking system to negative from stable. "We have changed to negative from stable our outlook on the US banking system to reflect the rapid deterioration in the operating environment following deposit runs at Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank (SNY) and the failures of SVB and SNY," Moody's said in a report. But it said other institutions with unrealized losses or uninsured depositors still could be at risk. Moody's on Monday downgraded Signature Bank and said it would remove all ratings. SVB, for instance, found itself with some $16 billion in unrealized losses from long-dated Treasurys it held.

☆ People on Twitter are mocking George Santos for weighing in on the Silicon Valley Bank implosion: 'Tell them how you once ran Switzerland's largest bank, George'
▼ + stars: | 2023-03-14 | by ( Aditi Bharade | ) www.businessinsider.com time to read: +3 min

New York Rep. George Santos tweeted that he was against bailing out Silicon Valley Bank. "Tell them how you once ran Switzerland's largest bank, George," read one tweet. Santos was referring to an announcement from federal regulators assuring the public that depositors of Silicon Valley Bank will be made whole. The Federal Deposit Insurance Corporation took control of Silicon Valley Bank on Friday after a disastrous bank run. "Says financial expert and former Goldman CEO George Santos," read a tweet from Chris Jackson, a former county commissioner in Lawrence County, Tennessee.

☆ The Silicon Valley Bank crisis is 'clearly' a bailout, says former FDIC chairman William Isaac
▼ + stars: | 2023-03-14 | by ( Cheryl Teh | ) www.businessinsider.com time to read: +3 min

William Isaac says the FDIC's handling of Silicon Valley Bank's collapse "clearly" constitutes a bailout. On Monday, Bloomberg anchor Scarlet Fu asked Isaac about his views on the FDIC taking over Silicon Valley Bank — and whether it should be considered a bailout. Isaac added that the Silicon Valley Bank situation is similar to what happened with the Continental Illinois National Bank and Trust Company's collapse in 1984. But Isaac also questioned if the FDIC should go as far with Silicon Valley Bank as it did with Continental Illinois. Isaac separately told Politico on Sunday that Silicon Valley Bank's failure will likely spread to more banks.

☆ Moody's just cut its outlook on the entire US banking system to negative in the wake of SVB's collapse
▼ + stars: | 2023-03-14 | by ( Phil Rosen | ) www.businessinsider.com time to read: +3 min

Moody's downgraded its outlook on the entire US banking system on Tuesday. The revised rating reflects the environment that sparked bank runs at Silicon Valley Bank, Signature Bank, and Silvergate Bank. "Our base case is for the Fed's monetary tightening to continue, which could deepen some banks' challenges." "Our base case is for the Fed's monetary tightening to continue, which could deepen some banks' challenges. Moody's median rating on US banks is now a3, or three notches higher than the global median of baa3.

☆ Stocks making the biggest moves midday: BuzzFeed, First Republic, Meta and more
▼ + stars: | 2023-03-14 | by ( Pia Singh | ) www.cnbc.com time to read: +3 min

(Photo by Justin Sullivan/Getty Images)BuzzFeed — Share of the internet media company lost about 10% on a weak first-quarter revenue outlook. Buzzfeed expects first-quarter revenue of $61-$67 million, compared to expectations of $83.6 million, according to FactSet. Meta Platforms — Meta shares gained 6% after CEO Mark Zuckerberg said Tuesday the social media company plans to cut 10,000 employees. First Republic , PacWest Bancorp, Western Alliance Bancorp , Comerica — Regional banks rallied sharply Tuesday after being hit hard last Friday and Monday. Shares of San Francisco-based First Republic rose about 50%, while PacWest jumped more than 60% and Western Alliance Bancorp gained more than 40%.

NEW YORK, March 14 (Reuters) - U.S. consumers have flooded banking giants, including JPMorgan Chase & Co (JPM.N), Bank of America Corp (BAC.N) and Citigroup Inc (C.N) with deposits after the collapse of Silicon Valley Bank, sources familiar with the matter said. Large banks saw in influx of money from consumers and businesses in the last week as SVB teetered, one of the sources told Reuters. Rating agency Moody's Investors Service on Tuesday changed its outlook on the U.S. banking system to negative from stable to reflect the rapid deterioration in the operating environment following deposit runs at Silicon Valley Bank, Silvergate Bank, and Signature Bank. Shares of U.S. regional banks such as First Republic Bank (FRC.N), Western Alliance Bancorp (WAL.N) and KeyCorp (KEY.N) have slumped on fears of possible bank contagion following the collapse of SVB and Signature Bank (SBNY.O). For example shares of First Republic climbed nearly 40 percent after plunging more than 60% on Monday.

☆ Should you be worried about your money, your bank or the U.S. banking system? Experts weigh in
▼ + stars: | 2023-03-14 | by ( Jessica Dickler | ) www.cnbc.com time to read: +4 min

However, the unexpected shutdowns of Silicon Valley Bank and Signature Bank have many consumers concerned about their deposits, their bank and the U.S. banking system. Here, experts answer what a bank run is, how FDIC insurance works and whether your deposits are still secure. andresr | E+ | Getty ImagesThe short answer is "possibly," according to Stacy Francis, a certified financial planner and president and CEO of Francis Financial in New York. "This is happening, in part, because of the Federal Reserve's sharp rise in interest rates," Francis said. Further, "many banks are seeing large withdrawals from cash depositors who are looking [for higher rates] to make more money," Francis added.

☆ Billionaire Charles Schwab's wealth plunged nearly $3 billion after his brokerage's shares were hammered amid the banking crisis
▼ + stars: | 2023-03-14 | by ( Huileng Tan | ) www.businessinsider.com time to read: +3 min

Shares of Charles Schwab Corp fell sharply amid the collapse of Silicon Valley Bank. Investors are worried as Charles Schwab Corp is sitting on a significant amount of unrealized losses on its bond assets. Charles Schwab Corp — while best known for its discount brokerage business — also provides banking and loan services. Charles Schwab Corp even sought to soothe investor jitters in a statement on Monday, saying it has enough liquidity to weather any volatility. Charles Schwab Corp did not immediately respond to Insider's request for comment sent outside regular business hours.

"HSBC is Europe's largest bank, and SVB UK customers should feel reassured by the strength, safety and security that brings them," Britain's finance minister Jeremy Hunt said. The Bank of England said it had organised the sale to underpin confidence in the financial system and minimise any fallout for British technology firms. "This acquisition makes excellent strategic sense for our business in the UK," HSBC CEO Noel Quinn said in a statement. The Bank of England said SVB UK had a total balance sheet size of around 8.8 billion pounds. Other potential buyers for SVB UK had included Bank of London, which said on Sunday it had submitted a formal proposal.

☆ VIEW US intervenes to shore up SVB deposits, stem financial fallout
▼ + stars: | 2023-03-13 | by ( ) www.reuters.com time to read: +10 min

March 13 (Reuters) - The U.S. government announced actions to shore up deposits and stem any broader financial fallout from the sudden collapse of tech startup-focused lender Silicon Valley Bank (SIVB.O) (SVB), sending U.S. stock futures higher. "The market turbulence sparked by SVB has upended rising market expectations on the Fed rate path. The fact that SVB and Signature Bank depositors will be made whole is critical in maintaining trust in the financial system and should help stem contagion fears this week. But it also means that 50 basis points (a possible Fed interest rate hike) is off the table." Given what's happened in the U.S. financial system, a 25 basis point hike is more likely than a 50 basis point hike."

☆ Here's how 'duration risk' came back to bite Silicon Valley Bank and led to its rapid collapse
▼ + stars: | 2023-03-13 | by ( Zev Fima | ) www.cnbc.com time to read: +11 min

One key term is "duration risk" along the yield curve in the bond market. Duration risk in bonds Those Treasury purchases in and of themselves were not the issue at SVB. The problem occurred when depositors came calling for their money and the bank didn't have the cash on hand. This mismatch, which always exists to some extent, is where "duration risk" comes into play. The risk is that the duration of the investments made by the bank doesn't match up with its potential liquidity needs.

☆ Bernie Sanders says Silicon Valley Bank's failure is the 'direct result' of a Trump-era bank regulation policy
▼ + stars: | 2023-03-13 | by ( Cheryl Teh | ) www.businessinsider.com time to read: +4 min

Sen. Bernie Sanders is blaming a Trump-era policy for the Silicon Valley Bank run. "Now is not the time for US taxpayers to bail out Silicon Valley Bank. The Federal Deposit Insurance Corporation shut down the Silicon Valley Bank on Friday following a catastrophic bank run. The collapse of Silicon Valley Bank has now become the largest bank failure in the US since the 2008 financial crisis. However, startups with money in Silicon Valley Bank exceeding $250,000 are now in danger of not being able to make payroll next week.

☆ KBW gives a slew of safe-haven bank stocks to buy after SVB collapse
▼ + stars: | 2023-03-13 | by ( Sarah Min | ) www.cnbc.com time to read: +2 min

Some bank stocks remain "safe havens" for investors even after the Silicon Valley Bank collapse , according to Keefe, Bruyette & Woods. The firm recommended 11 stocks that investors should buy "right here, right now" following the sell-off in bank stocks in the wake of SVB's failure, as well as the regulatory response over the weekend, according to a Sunday note. That could spell a buying opportunity for some bank stocks. "We see a potentially significant rebound in several bank stocks, as the market is likely to believe that the Fed and FDIC stuck the landing," analyst Christopher McGratty said to clients on Sunday. Old National Bancorp is a buying opportunity that's also a best idea for 2023, according to the note.

☆ What Signature Bank, Silicon Valley Bank failures mean for consumers and investors
▼ + stars: | 2023-03-13 | by ( Kate Dore | Cfp | ) www.cnbc.com time to read: +2 min

A customer stands outside of a shuttered Silicon Valley Bank (SVB) headquarters on March 10, 2023 in Santa Clara, California. Justin Sullivan | Getty ImagesAfter two bank failures and dramatic moves from U.S. regulators to protect depositors, financial advisors have a message for consumers: Don't panic. The U.S. government on Sunday approved plans to safeguard depositors and financial institutions affected by the collapse of Silicon Valley Bank on Friday. watch nowWhile futures initially jumped Sunday evening following the announcement from regulators, bank stocks fell as the market opened Monday. Most consumers don't need to worry about depositsLee Baker, a certified financial planner and owner of Apex Financial Services in Atlanta, said most consumers don't need to worry about their bank deposits.

☆ SVB depositor rescue was a move that even this mother could love
▼ + stars: | 2023-03-13 | by ( Bob Pisani | ) www.cnbc.com time to read: +3 min

In this photo illustration Silicon Valley Bank (SVB) logo seen displayed on a smartphone screen with NYSE (The New York Stock Exchange) logos in the background in Chania, Greece on March 13, 2023. Even my mother is happy with the Silicon Valley Bank rescue plan. Not just for what it will do for Silicon Valley depositors, but for what it will due for holders of bank savings accounts around the country. "The banks are going to have to give all of us savers more interest, and it's about time," she told me. She has been crowing about her newfound love of bond investing and its relationship to the Silicon Valley Bank debacle.

☆ Why Silicon Valley Bank's customers were bailed out
▼ + stars: | 2023-03-13 | by ( Alistair Barr | ) www.businessinsider.com time to read: +6 min

Regulators shut down Silicon Valley Bank on Friday and halted account withdrawals. Why did Silicon Valley Bank collapse? This social media firestorm created a bank run where SVB customers raced against each other to pull money from the bank. Did the government bail out Silicon Valley Bank? Will people get their money back from Silicon Valley Bank?

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