REUTERS
"U.S. regional bank stocks dive after hours as PacWest weighs options"
By Noel Randewich and Medha Singh
May 3, 2023
May 3 (Reuters) - Shares of U.S. regional lenders collapsed in extended trade on Wednesday, with PacWest Bancorp losing over half its value after reports the California bank is exploring strategic options, including a sale.
PacWest sank 60% and Western Alliance Bancorp tumbled 33% as the U.S. regional banking crisis that started two months ago reverberated across the U.S. financial system.
Zion Bancorporation, Comerica and First Horizon each slumped more than 11%, and the SPDR S&P Regional Banking ETF dropped 5%.
After a liquidity boost last month failed to inspire investor confidence, PacWest is now considering alternatives that may include a sale or capital raise, a person familiar with the matter said.
The late-day drop in regional bank shares added to losses in Wednesday's regular trading session, despite reassurances by U.S. Federal Reserve Chair Jerome Powell that the country's banking system remains resilient.
In a press conference after the Fed announced a much anticipated 25-basis hike in interest rates, Powell said the U.S. banking sector remained sound and resilient despite "strains" in March that led to tighter economic conditions.
The cost of insuring against further losses in regional U.S. bank stocks stood on Wednesday near a one-month high in options markets, Reuters reported.
The recent regional bank selloff indicates investor unease over their outlook, Brown Brothers Harriman analysts wrote in a note.
"Because that outlook is still unknown, markets did what they always do in these situations and assumed the worst," the analysts said.
The exposure of regional banks to the commercial real estate sector, particularly office buildings, has also sparked investor worries, given rising interest rates.
Reporting by Medha Singh in Bengaluru; Editing by Dhanya Ann Thoppil
https://www.reuters.com/business/financ ... 023-05-03/
LEST WE FORGET THE LOOTERS
Re: LEST WE FORGET THE LOOTERS
REUTERS
"PacWest stock plunges as US regional banking woes worsen"
By Medha Singh, Chibuike Oguh
MAY 4, 2023
(Reuters) -Shares of PacWest Bancorp plunged on Thursday, dragging other regional lenders down after the Los Angeles-based bank’s plan to explore strategic options sparked investor worries of a widening financial crisis.
PacWest’s stock slumped more than 40% in afternoon trading, dropping to a record low.
The bank had confirmed an earlier Reuters report on Wednesday that it was exploring strategic options, including a potential sale or capital raising.
Western Alliance shares pared losses after plummeting by nearly 60% following a Financial Times report that the lender was exploring strategic options, including a potential sale of all or part of its business.
Western Alliance denied the FT report, calling it “categorically false in all respects,” and said it was weighing legal options against the newspaper.
The bank’s stock was down nearly 35% in afternoon trading.
Western Alliance has been seeking to reassure investors about its financial stability.
On Wednesday it said it had not seen unusual deposit outflows following the sale of collapsed lender First Republic Bank to JPMorgan Chase & Co on Monday.
First Republic’s collapse, the third major casualty of the biggest crisis to hit the U.S. banking sector since 2008, rekindled a slide in shares of regional lenders this week despite regulatory efforts to staunch the turmoil that began with the collapse of Silicon Valley Bank in March.
U.S. officials at the federal and state levels are assessing the possibility of “market manipulation” behind big moves in banking share prices in recent days, a source familiar with the matter told Reuters on Thursday.
“Nobody knows where these banks should be trading at because what we saw with Silicon Valley Bank is that the fundamentals can change so quickly,” said Tom Plumb, portfolio manager at Plumb Balanced Fund in Madison, Wisconsin.
“This normally would have been a great opportunity to buy banks with premier regional presence and it may be, but the real concern is nobody knows what the rules are and what they are valued at,” Plumb added.
Zion Bancorp shed 12% and Comerica fell nearly 11%.
KeyCorp and Valley National Bancorp were down 7% and 4%, respectively.
The KBW Regional Banking index dropped 3.3%.
Major U.S. banks were also losing ground on Thursday, with the S&P 500 Banks index falling nearly 3%.
JPMorgan’s shares fell 1.4%, while Bank of America declined 3%.
The common theme among the banking stocks that have sold off sharply is that they reported large deposit declines in the first quarter, said Truist Securities analyst Brandon King, while calling the selloff “overdone.”
PacWest Bancorp reported a loss of $1.1 billion attributed to shareholders for the first quarter of the year.
Its shares have lost 72% of their value this year, making it one of the worst performers on the small-cap S&P 600 regional banks index, which has lost a third of its value in the same period.
In another sign of stress within the regional banking sector, First Horizon Corp and Toronto-Dominion Bank Group announced on Thursday that they agreed to terminate their $13.4 billion merger owing to uncertainty over securing regulatory approvals for the deal.
First Horizon shares plunged 32% after the news, while U.S.-listed shares of Toronto-Dominion Bank gained nearly 0.5%.
U.S. Federal Reserve Chair Jerome Powell on Wednesday reiterated the banking system remains resilient despite “strains” in March, after the central bank delivered a 25-basis- point rate hike and signaled a pause in its tightening cycle.
Powell also said bank deposits had stabilized.
“The Fed of course would react if a chaotic outflow of deposits from regional banks resumes,” Citigroup analysts wrote in a note to investors.
“That risk is more elevated after recent banking developments and can never be fully taken off the table.”
Reporting by Medha Singh in Bengaluru and Chibuike Oguh in New York; additional reporting by Amruta Khandekar; Editing by Lance Tupper, Devika Syamnath, Rosalba O’Brien and Deepa Babington
https://www.reuters.com/article/usa-ban ... SL1N3710UR
"PacWest stock plunges as US regional banking woes worsen"
By Medha Singh, Chibuike Oguh
MAY 4, 2023
(Reuters) -Shares of PacWest Bancorp plunged on Thursday, dragging other regional lenders down after the Los Angeles-based bank’s plan to explore strategic options sparked investor worries of a widening financial crisis.
PacWest’s stock slumped more than 40% in afternoon trading, dropping to a record low.
The bank had confirmed an earlier Reuters report on Wednesday that it was exploring strategic options, including a potential sale or capital raising.
Western Alliance shares pared losses after plummeting by nearly 60% following a Financial Times report that the lender was exploring strategic options, including a potential sale of all or part of its business.
Western Alliance denied the FT report, calling it “categorically false in all respects,” and said it was weighing legal options against the newspaper.
The bank’s stock was down nearly 35% in afternoon trading.
Western Alliance has been seeking to reassure investors about its financial stability.
On Wednesday it said it had not seen unusual deposit outflows following the sale of collapsed lender First Republic Bank to JPMorgan Chase & Co on Monday.
First Republic’s collapse, the third major casualty of the biggest crisis to hit the U.S. banking sector since 2008, rekindled a slide in shares of regional lenders this week despite regulatory efforts to staunch the turmoil that began with the collapse of Silicon Valley Bank in March.
U.S. officials at the federal and state levels are assessing the possibility of “market manipulation” behind big moves in banking share prices in recent days, a source familiar with the matter told Reuters on Thursday.
“Nobody knows where these banks should be trading at because what we saw with Silicon Valley Bank is that the fundamentals can change so quickly,” said Tom Plumb, portfolio manager at Plumb Balanced Fund in Madison, Wisconsin.
“This normally would have been a great opportunity to buy banks with premier regional presence and it may be, but the real concern is nobody knows what the rules are and what they are valued at,” Plumb added.
Zion Bancorp shed 12% and Comerica fell nearly 11%.
KeyCorp and Valley National Bancorp were down 7% and 4%, respectively.
The KBW Regional Banking index dropped 3.3%.
Major U.S. banks were also losing ground on Thursday, with the S&P 500 Banks index falling nearly 3%.
JPMorgan’s shares fell 1.4%, while Bank of America declined 3%.
The common theme among the banking stocks that have sold off sharply is that they reported large deposit declines in the first quarter, said Truist Securities analyst Brandon King, while calling the selloff “overdone.”
PacWest Bancorp reported a loss of $1.1 billion attributed to shareholders for the first quarter of the year.
Its shares have lost 72% of their value this year, making it one of the worst performers on the small-cap S&P 600 regional banks index, which has lost a third of its value in the same period.
In another sign of stress within the regional banking sector, First Horizon Corp and Toronto-Dominion Bank Group announced on Thursday that they agreed to terminate their $13.4 billion merger owing to uncertainty over securing regulatory approvals for the deal.
First Horizon shares plunged 32% after the news, while U.S.-listed shares of Toronto-Dominion Bank gained nearly 0.5%.
U.S. Federal Reserve Chair Jerome Powell on Wednesday reiterated the banking system remains resilient despite “strains” in March, after the central bank delivered a 25-basis- point rate hike and signaled a pause in its tightening cycle.
Powell also said bank deposits had stabilized.
“The Fed of course would react if a chaotic outflow of deposits from regional banks resumes,” Citigroup analysts wrote in a note to investors.
“That risk is more elevated after recent banking developments and can never be fully taken off the table.”
Reporting by Medha Singh in Bengaluru and Chibuike Oguh in New York; additional reporting by Amruta Khandekar; Editing by Lance Tupper, Devika Syamnath, Rosalba O’Brien and Deepa Babington
https://www.reuters.com/article/usa-ban ... SL1N3710UR
Re: LEST WE FORGET THE LOOTERS
REUTERS
"Pressure grows for regulatory intervention as US bank rout deepens"
Reuters
May 4, 2023
WASHINGTON, May 4 (Reuters) - Pressure is growing on U.S. regulators to take more steps to shore up the country's banking sector as a renewed rout in regional lenders' shares forced PacWest Bancorp to explore options to bolster its balance sheet.
Wall Street executives and bank analysts called for regulators to quickly provide more protection for bank deposits and consider other backstops, arguing only an intervention could stop the crisis -- which saw several regional lenders' shares plunge more than 10% on Thursday -- from spiraling.
It was unclear, however, if the authorities would immediately step in.
"Investors are clearly continuing to focus on remaining players that are deemed the weakest," wrote UBS banking analyst Erika Najarian on Thursday.
"To stop the cascade before the market literally drives more bank failures, we wonder if it's time for the Treasury and the Fed to step up and potentially create some sort of backstop," wrote Najarian.
Shares of Los Angeles-based PacWest slumped more than 40% in Thursday afternoon trading -- a record low -- after the lender confirmed a Reuters report that it was exploring strategic options, including a potential sale or capital raising.
Western Alliance's shares pared losses after plummeting by nearly 60% on a Financial Times report, which it categorically denied, that the lender was exploring strategic options.
On Wednesday evening, the bank said it had not seen unusual deposit outflows and had adequate liquidity.
Meanwhile, Canada's Toronto-Dominion Bank Group on Thursday called off its $13.4 billion takeover of First Horizon Corp, citing uncertainty over when the deal would be approved by regulators, triggering a near 40% fall in the U.S. bank's shares.
Major U.S. banks also lost ground on Thursday, with the S&P 500 Banks index falling nearly 3%.
Activist investor Nelson Peltz told the Financial Times that deposit insurance should be extended, echoing billionaire investor Bill Ackman who on Wednesday tweeted that regulators' failure to expand the insurance regime "hammered more nails in the coffin."
Peter Orszag, CEO of financial advisory at Lazard Ltd, on Wednesday called on officials to at least signal their intention to guarantee uninsured deposits for a six-month period.
Some regulatory experts, including former FDIC chair Jelena McWilliams, warned that increasing deposit insurance could encourage risk-taking, while others noted regulators have fewer tools to support banks following the 2008 financial crisis.
The U.S. Treasury Department on Thursday said it was continuing to "closely monitor" market developments, but "the banking system has substantial liquidity and deposit flows are stable."
The Federal Deposit Insurance Corp. (FDIC) did not respond to a request for comment.
The rout had also thrown the practice of short-selling, in which investors profit by betting against shares, back into the spotlight, with prominent law firm Wachtell, Lipton, Rosen & Katz calling on Thursday for securities regulators to restrict short sales in financial institutions.
While the U.S. Securities and Exchange Commission (SEC) is not contemplating such a ban, Reuters reported Wednesday, its chair Gary Gensler said on Thursday the agency is focused on identifying any form of market misconduct.
His comments followed a Reuters report that federal and state regulators were analyzing the possibility of market manipulation behind recent bank share moves.
CONTAGION
The latest crisis began in March when runs on Silicon Valley Bank (SVB) and Signature Bank led to their abrupt closures, leading depositors to move their cash to bigger banks.
To stem the contagion, regulators took emergency steps to reimburse all customers at the two banks, while the Fed offered lenders additional liquidity.
Government agencies are investigating the collapse of SVB.
Goldman Sachs Group Inc, which was involved in key transactions that preceded SVB's downfall, disclosed on Thursday that it was cooperating with those probes.
The markets appeared to calm late last month.
But over the weekend, California-based First Republic became the third bank to fail.
Regulators hoped its sale to JPMorgan would draw a line under the crisis, but the deal revived investor fears.
On Monday, the FDIC floated possible reforms, including potentially raising the current insurance cap of $250,000 per-person per-bank, but such a permanent change would require congressional approval.
"Congress does not appear ready to exercise this option at this juncture."
"So if a change to FDIC coverage limits is not happening, then the risk is that we may be stuck with a structural headwind," said Carl Riccadonna, chief economist at BNP Paribas.
Major banks and private equity firms have balked at offering lenders capital infusions without a government backstop because of concerns about booking losses.
Raymond James analyst Ed Mills said regulators may also consider other options, including sending a signal that bank equity holders may be protected, or additional Fed funding, but added they were unlikely to move "unless things significantly deteriorate."
Writing by Michelle Price; reporting by Saeed Azhar, Matt Tracey, Andrea Shalal, Hannah Lang, Peter Schroeder and Svea Herbst-Bayliss; Editing by Andrea Ricci
https://www.reuters.com/markets/us/pres ... 023-05-04/
"Pressure grows for regulatory intervention as US bank rout deepens"
Reuters
May 4, 2023
WASHINGTON, May 4 (Reuters) - Pressure is growing on U.S. regulators to take more steps to shore up the country's banking sector as a renewed rout in regional lenders' shares forced PacWest Bancorp to explore options to bolster its balance sheet.
Wall Street executives and bank analysts called for regulators to quickly provide more protection for bank deposits and consider other backstops, arguing only an intervention could stop the crisis -- which saw several regional lenders' shares plunge more than 10% on Thursday -- from spiraling.
It was unclear, however, if the authorities would immediately step in.
"Investors are clearly continuing to focus on remaining players that are deemed the weakest," wrote UBS banking analyst Erika Najarian on Thursday.
"To stop the cascade before the market literally drives more bank failures, we wonder if it's time for the Treasury and the Fed to step up and potentially create some sort of backstop," wrote Najarian.
Shares of Los Angeles-based PacWest slumped more than 40% in Thursday afternoon trading -- a record low -- after the lender confirmed a Reuters report that it was exploring strategic options, including a potential sale or capital raising.
Western Alliance's shares pared losses after plummeting by nearly 60% on a Financial Times report, which it categorically denied, that the lender was exploring strategic options.
On Wednesday evening, the bank said it had not seen unusual deposit outflows and had adequate liquidity.
Meanwhile, Canada's Toronto-Dominion Bank Group on Thursday called off its $13.4 billion takeover of First Horizon Corp, citing uncertainty over when the deal would be approved by regulators, triggering a near 40% fall in the U.S. bank's shares.
Major U.S. banks also lost ground on Thursday, with the S&P 500 Banks index falling nearly 3%.
Activist investor Nelson Peltz told the Financial Times that deposit insurance should be extended, echoing billionaire investor Bill Ackman who on Wednesday tweeted that regulators' failure to expand the insurance regime "hammered more nails in the coffin."
Peter Orszag, CEO of financial advisory at Lazard Ltd, on Wednesday called on officials to at least signal their intention to guarantee uninsured deposits for a six-month period.
Some regulatory experts, including former FDIC chair Jelena McWilliams, warned that increasing deposit insurance could encourage risk-taking, while others noted regulators have fewer tools to support banks following the 2008 financial crisis.
The U.S. Treasury Department on Thursday said it was continuing to "closely monitor" market developments, but "the banking system has substantial liquidity and deposit flows are stable."
The Federal Deposit Insurance Corp. (FDIC) did not respond to a request for comment.
The rout had also thrown the practice of short-selling, in which investors profit by betting against shares, back into the spotlight, with prominent law firm Wachtell, Lipton, Rosen & Katz calling on Thursday for securities regulators to restrict short sales in financial institutions.
While the U.S. Securities and Exchange Commission (SEC) is not contemplating such a ban, Reuters reported Wednesday, its chair Gary Gensler said on Thursday the agency is focused on identifying any form of market misconduct.
His comments followed a Reuters report that federal and state regulators were analyzing the possibility of market manipulation behind recent bank share moves.
CONTAGION
The latest crisis began in March when runs on Silicon Valley Bank (SVB) and Signature Bank led to their abrupt closures, leading depositors to move their cash to bigger banks.
To stem the contagion, regulators took emergency steps to reimburse all customers at the two banks, while the Fed offered lenders additional liquidity.
Government agencies are investigating the collapse of SVB.
Goldman Sachs Group Inc, which was involved in key transactions that preceded SVB's downfall, disclosed on Thursday that it was cooperating with those probes.
The markets appeared to calm late last month.
But over the weekend, California-based First Republic became the third bank to fail.
Regulators hoped its sale to JPMorgan would draw a line under the crisis, but the deal revived investor fears.
On Monday, the FDIC floated possible reforms, including potentially raising the current insurance cap of $250,000 per-person per-bank, but such a permanent change would require congressional approval.
"Congress does not appear ready to exercise this option at this juncture."
"So if a change to FDIC coverage limits is not happening, then the risk is that we may be stuck with a structural headwind," said Carl Riccadonna, chief economist at BNP Paribas.
Major banks and private equity firms have balked at offering lenders capital infusions without a government backstop because of concerns about booking losses.
Raymond James analyst Ed Mills said regulators may also consider other options, including sending a signal that bank equity holders may be protected, or additional Fed funding, but added they were unlikely to move "unless things significantly deteriorate."
Writing by Michelle Price; reporting by Saeed Azhar, Matt Tracey, Andrea Shalal, Hannah Lang, Peter Schroeder and Svea Herbst-Bayliss; Editing by Andrea Ricci
https://www.reuters.com/markets/us/pres ... 023-05-04/
Re: LEST WE FORGET THE LOOTERS
REUTERS
"US regional banks rally, capping whipsaw week"
By Manya Saini and Chibuike Oguh
May 5, 2023
May 5 (Reuters) - Shares in PacWest Bancorp jumped nearly 82% amid a broader rebound in U.S. regional banks on Friday after analysts upgraded a number of lenders they said were oversold, though some investors fretted the surge may be short-lived.
Investor worries about the health of mid-sized lenders deepened in recent days following the collapse of First Republic Bank and PacWest's announcement that it was exploring strategic options to bolster its finances, which triggered a brutal sell-off.
The whiplash in regional banks' shares underscores ongoing investor uncertainty over the health of the sector as market sentiment has started to over-run balance sheet fundamentals.
Friday's jump, buoyed by a stronger-than-expected jobs report that lifted Wall Street's main indexes, could be painful for some investors that have bet heavily against regional banks.
"The regional bank group has completely disconnected from the fundamentals during this week’s sell-off," Art Hogan, B. Riley Wealth chief market strategist, wrote in a note to investors.
JPMorgan analysts, led by Steven Alexopoulos, upgraded their ratings of several regional banks on Friday, including Western Alliance, Comerica and Zion Bancorp, saying that the stocks appear "substantially mispriced" after seeing "intense shorting/selling pressure."
"With sentiment very negative and a potential sector re-rating on the horizon, we now move to the middle of the boat and adopt a neutral sector stance," the analysts wrote in a note to investors.
Western Alliance and Zion Bancorp gained 49% and 19%, respectively.
Comerica Inc rose 17%, Keycorp was up nearly 10%, First Horizon Corp added 9%, and Truist Financial Corp jumped about 10%.
The KBW Regional Banking Index, which has plunged about 30% this year, closed nearly 5% higher.
RELIEF RALLY
But some investors said the rebound may not signal a long-term shift in sentiment.
"It's more of relief rally just after the dramatic sell-off," said Sandy Villere, portfolio manager at Villere & Co in New Orleans, adding the market may also be anticipating some kind of government support for the sector in coming days.
Wall Street executives have urged regulators to provide greater protection for bank deposits, arguing only a strong intervention could stop the contagion, although some analysts have said such a move is not immediately likely.
"The most recent movements in bank equity prices are more about general confidence than deposits."
"That would be a more difficult issue for regulators to address," said Citigroup analysts.
On Friday, St. Louis Fed President James Bullard reiterated the position of regulators that the banking sector is fundamentally in good shape, telling the Economic Club of Minnesota that regional banks had a "couple of issues" but represented a small share of U.S. financial intermediation.
Deposits at small U.S. bank fell slightly to $5.32 trillion in the week ending on April 26th compared with $5.34 trillion in the prior week, Fed data showed on Friday, indicating that customers retained confidence in mid-sized lenders.
U.S. Treasury Secretary Janet Yellen will also tell her Group of Seven counterparts next week that the banking system remains sound, Reuters reported on Friday.
As many as 16 midsized banks have shed more than $57 billion in market capitalization since last Friday, Reuters calculations showed.
Short-sellers reaped a combined $430.47 million in paper profits betting against PacWest, Western Alliance, Zion and First Horizon on Thursday, according to data from analytics firm Ortex.
"A shift in momentum could cause a massive short squeeze," said Hogan.
Regional banks have hit back at short sellers, writing in a letter to Securities and Exchange Commission chair Gary Gensler on Thursday that many such bets did "not appear to reflect the issuers’ financial status."
Gensler said on Thursday the agency would probe any manipulative behavior.
Reporting by Manya Saini in Bengaluru; additional reporting by Amruta Khandekar; Editing by Vinay Dwivedi
https://www.reuters.com/business/financ ... 023-05-05/
"US regional banks rally, capping whipsaw week"
By Manya Saini and Chibuike Oguh
May 5, 2023
May 5 (Reuters) - Shares in PacWest Bancorp jumped nearly 82% amid a broader rebound in U.S. regional banks on Friday after analysts upgraded a number of lenders they said were oversold, though some investors fretted the surge may be short-lived.
Investor worries about the health of mid-sized lenders deepened in recent days following the collapse of First Republic Bank and PacWest's announcement that it was exploring strategic options to bolster its finances, which triggered a brutal sell-off.
The whiplash in regional banks' shares underscores ongoing investor uncertainty over the health of the sector as market sentiment has started to over-run balance sheet fundamentals.
Friday's jump, buoyed by a stronger-than-expected jobs report that lifted Wall Street's main indexes, could be painful for some investors that have bet heavily against regional banks.
"The regional bank group has completely disconnected from the fundamentals during this week’s sell-off," Art Hogan, B. Riley Wealth chief market strategist, wrote in a note to investors.
JPMorgan analysts, led by Steven Alexopoulos, upgraded their ratings of several regional banks on Friday, including Western Alliance, Comerica and Zion Bancorp, saying that the stocks appear "substantially mispriced" after seeing "intense shorting/selling pressure."
"With sentiment very negative and a potential sector re-rating on the horizon, we now move to the middle of the boat and adopt a neutral sector stance," the analysts wrote in a note to investors.
Western Alliance and Zion Bancorp gained 49% and 19%, respectively.
Comerica Inc rose 17%, Keycorp was up nearly 10%, First Horizon Corp added 9%, and Truist Financial Corp jumped about 10%.
The KBW Regional Banking Index, which has plunged about 30% this year, closed nearly 5% higher.
RELIEF RALLY
But some investors said the rebound may not signal a long-term shift in sentiment.
"It's more of relief rally just after the dramatic sell-off," said Sandy Villere, portfolio manager at Villere & Co in New Orleans, adding the market may also be anticipating some kind of government support for the sector in coming days.
Wall Street executives have urged regulators to provide greater protection for bank deposits, arguing only a strong intervention could stop the contagion, although some analysts have said such a move is not immediately likely.
"The most recent movements in bank equity prices are more about general confidence than deposits."
"That would be a more difficult issue for regulators to address," said Citigroup analysts.
On Friday, St. Louis Fed President James Bullard reiterated the position of regulators that the banking sector is fundamentally in good shape, telling the Economic Club of Minnesota that regional banks had a "couple of issues" but represented a small share of U.S. financial intermediation.
Deposits at small U.S. bank fell slightly to $5.32 trillion in the week ending on April 26th compared with $5.34 trillion in the prior week, Fed data showed on Friday, indicating that customers retained confidence in mid-sized lenders.
U.S. Treasury Secretary Janet Yellen will also tell her Group of Seven counterparts next week that the banking system remains sound, Reuters reported on Friday.
As many as 16 midsized banks have shed more than $57 billion in market capitalization since last Friday, Reuters calculations showed.
Short-sellers reaped a combined $430.47 million in paper profits betting against PacWest, Western Alliance, Zion and First Horizon on Thursday, according to data from analytics firm Ortex.
"A shift in momentum could cause a massive short squeeze," said Hogan.
Regional banks have hit back at short sellers, writing in a letter to Securities and Exchange Commission chair Gary Gensler on Thursday that many such bets did "not appear to reflect the issuers’ financial status."
Gensler said on Thursday the agency would probe any manipulative behavior.
Reporting by Manya Saini in Bengaluru; additional reporting by Amruta Khandekar; Editing by Vinay Dwivedi
https://www.reuters.com/business/financ ... 023-05-05/
Re: LEST WE FORGET THE LOOTERS
REUTERS
"PacWest shares pare gains after dividend cut fails to stem market fears"
By Niket Nishant and Chibuike Oguh
May 8, 2023
May 8 (Reuters) - PacWest Bancorp shares pared early gains on Monday, dragging down other U.S. regional banking stocks, as the Los Angeles-based lender's decision to slash its quarterly dividend failed to stem worries about its financial stability.
PacWest announced on Friday it would pay a dividend of just 1 cent per common share, instead of its regular 25 cents, citing economic uncertainty and banking volatility.
"The dividend cut is not a good sign," said Jamie Cox, managing partner at Harris Financial Group.
"We're going to be having this back and forth with regional banks until the FDIC explicitly guarantees bank deposits and the Fed helps them repair their balance sheet."
The Federal Deposit Insurance Corp, which insures $250,000 in deposits per person per bank, said last week it saw merits in increasing that backstop for business accounts.
Treasury Secretary Janet Yellen said on Monday the U.S. banking system had adequate capital and liquidity and that regulators are prepared to step in with tools used in the past if current pressures led to a contagion.
Yellen also said the Treasury Department is reviewing the FDIC's report on increasing its deposit insurance coverage and is ready to work with Congress to make changes to the current limits, if needed.
PacWest shares soared on Friday, rebounding from a record low last week, after the bank also said it was exploring strategic options, including a potential sale or capital raise.
Its stock jumped more than 30% on Monday before closing 3.7% higher.
Other U.S. regional banks also retreated.
Western Alliance Bancorp, which had surged 11%, edged up 0.59% while Comerica Inc lost 0.8% after gaining 7%.
Valley National Bancorp shed 5.39% and KeyCorp fell 1.53%.
The KBW Regional Banking index fell 2.82% after gaining nearly 4.7%.
The index is still down more than 26% since worries about a banking crisis emerged in March.
First Horizon Corp shares fell 2.19%, extending a sell-off sparked by last week's termination of the Memphis, Tennessee-based bank's proposed $13.4 billion merger with Canada's Toronto-Dominion Bank.
"Friday was a bit of a reprieve, but we continue to believe that equity manipulation, if unabated, presents a risk to the confidence needed for the U.S. banking system to function," Piper Sandler analyst Mark Fitzgibbon wrote in a note.
Short sellers have so far reaped $455.9 million in paper profits betting against regional banks, with First Horizon topping the list of gainers on Monday, data from analytics firm Ortex showed.
Regional lenders had urged U.S. Securities and Exchange Commission Chair Gary Gensler last week to probe short sellers, whose trades were causing bank stocks to be "disconnected from the underlying financial realities."
But hedge funds, which often engage in short selling, pushed back on Monday, saying in a letter to Gensler that a ban would be counterproductive.
"Banning short selling will only increase market volatility, hurt price discovery, and delay a recovery in regional banks' prices," wrote Bryan Corbett, chief executive of the Managed Funds Association trade group.
Yellen said it is in the SEC's purview to regulate short selling although there is a high bar for any controls if evidence of market manipulation was found.
The regional bank crisis stems from the Federal Reserve's steep interest rate hikes over the past year, and the situation could worsen for lenders, the main funders of small businesses, said Sean Kouplen, chairman and chief executive of Oklahoma-based Regent Bank, in an interview.
"I have a general fear that smaller banks are going to disappear, and we're going to end up with just a few large banks," Kouplen said.
Reporting by Niket Nishant in Bengaluru; Editing by Anil D'Silva
https://www.reuters.com/business/financ ... 023-05-08/
"PacWest shares pare gains after dividend cut fails to stem market fears"
By Niket Nishant and Chibuike Oguh
May 8, 2023
May 8 (Reuters) - PacWest Bancorp shares pared early gains on Monday, dragging down other U.S. regional banking stocks, as the Los Angeles-based lender's decision to slash its quarterly dividend failed to stem worries about its financial stability.
PacWest announced on Friday it would pay a dividend of just 1 cent per common share, instead of its regular 25 cents, citing economic uncertainty and banking volatility.
"The dividend cut is not a good sign," said Jamie Cox, managing partner at Harris Financial Group.
"We're going to be having this back and forth with regional banks until the FDIC explicitly guarantees bank deposits and the Fed helps them repair their balance sheet."
The Federal Deposit Insurance Corp, which insures $250,000 in deposits per person per bank, said last week it saw merits in increasing that backstop for business accounts.
Treasury Secretary Janet Yellen said on Monday the U.S. banking system had adequate capital and liquidity and that regulators are prepared to step in with tools used in the past if current pressures led to a contagion.
Yellen also said the Treasury Department is reviewing the FDIC's report on increasing its deposit insurance coverage and is ready to work with Congress to make changes to the current limits, if needed.
PacWest shares soared on Friday, rebounding from a record low last week, after the bank also said it was exploring strategic options, including a potential sale or capital raise.
Its stock jumped more than 30% on Monday before closing 3.7% higher.
Other U.S. regional banks also retreated.
Western Alliance Bancorp, which had surged 11%, edged up 0.59% while Comerica Inc lost 0.8% after gaining 7%.
Valley National Bancorp shed 5.39% and KeyCorp fell 1.53%.
The KBW Regional Banking index fell 2.82% after gaining nearly 4.7%.
The index is still down more than 26% since worries about a banking crisis emerged in March.
First Horizon Corp shares fell 2.19%, extending a sell-off sparked by last week's termination of the Memphis, Tennessee-based bank's proposed $13.4 billion merger with Canada's Toronto-Dominion Bank.
"Friday was a bit of a reprieve, but we continue to believe that equity manipulation, if unabated, presents a risk to the confidence needed for the U.S. banking system to function," Piper Sandler analyst Mark Fitzgibbon wrote in a note.
Short sellers have so far reaped $455.9 million in paper profits betting against regional banks, with First Horizon topping the list of gainers on Monday, data from analytics firm Ortex showed.
Regional lenders had urged U.S. Securities and Exchange Commission Chair Gary Gensler last week to probe short sellers, whose trades were causing bank stocks to be "disconnected from the underlying financial realities."
But hedge funds, which often engage in short selling, pushed back on Monday, saying in a letter to Gensler that a ban would be counterproductive.
"Banning short selling will only increase market volatility, hurt price discovery, and delay a recovery in regional banks' prices," wrote Bryan Corbett, chief executive of the Managed Funds Association trade group.
Yellen said it is in the SEC's purview to regulate short selling although there is a high bar for any controls if evidence of market manipulation was found.
The regional bank crisis stems from the Federal Reserve's steep interest rate hikes over the past year, and the situation could worsen for lenders, the main funders of small businesses, said Sean Kouplen, chairman and chief executive of Oklahoma-based Regent Bank, in an interview.
"I have a general fear that smaller banks are going to disappear, and we're going to end up with just a few large banks," Kouplen said.
Reporting by Niket Nishant in Bengaluru; Editing by Anil D'Silva
https://www.reuters.com/business/financ ... 023-05-08/
Re: LEST WE FORGET THE LOOTERS
REUTERS
"PacWest gains ground in choppy trading for U.S. regional banks"
By Chibuike Oguh and Medha Singh
May 9, 2023
May 9 (Reuters) - PacWest Bancorp shares regained earlier session losses on Tuesday as investor uncertainty about the financial health of U.S. regional banks underpinned skittish trading in their stocks.
PacWest rose 2.3% after losing as much as 10% earlier in the day following a decision by the Los Angeles-based lender to cut its quarterly dividend in an effort to bolster its liquidity.
The bank's stock has rallied by more than 92% in the last three sessions after a bruising sell-off sent it to a record low last week.
"We believe that PacWest and other banks have not been trading in line with their fundamentals," said Piper Sandler analyst Matthew Clark, who currently has an "overweight" rating on PacWest shares.
The shares of other regional banks were also choppy.
Western Alliance fell 1.4%, Valley National Bancorp lost 1.5%, First Horizon Corp shed 1.3%, and Synovus Financial Corp dropped nearly 1%.
But Comerica Inc and Zion Bancorp were up 0.39% and 0.66%, respectively.
The KBW Regional Banking Index dropped 0.72% on Tuesday and was hovering near its 30-month low hit last week after the collapse of First Republic Bank and PacWest's decision to explore strategic options.
"Volatility is back."
"We had hoped that a resolution of (First Republic) would bring some calm and cooler heads back to the market."
"Instead, it seemed only to re-intensify wild price swings," Piper Sandler analysts, led by Scott Siefers, wrote in a note to investors.
New York Federal Reserve President John Williams on Tuesday said the U.S. banking system remained sound and resilient, and that the acute phase of the ongoing crisis was likely over, with problems limited only to a few banks.
Williams also said Fed was eyeing an end to the rate-hike cycle as inflation pressures have eased a bit and tighter financial conditions tied to banking sector troubles were expected to help further cool the economy.
PacWest and Western Alliance, which have been at the heart of the recent sell-off in regional banks, saw the steepest drop in deposits in the first quarter after First Republic Bank, according to S&P Global Market Intelligence data.
Analysts have called on the Federal Deposit Insurance Corp (FDIC), which currently insures $250,000 in deposits per person per bank, to raise its deposit coverage to end the current crisis with regional banks.
The FDIC released a report last week, saying it saw merits in increasing the backstop for business accounts.
"The FDIC needs to raise its limits because that's what will going to instill confidence in people and stop them from moving their money to larger banks," said Michael Ashley Schulman, chief investment officer at Running Point Capital in California.
"Otherwise smaller banks will be destroyed."
Reporting by Medha Singh in Bengaluru, additional reporting by Bansari Mayur Kamdar; Editing by Arun Koyyur
https://www.reuters.com/markets/us/pacw ... 023-05-09/
"PacWest gains ground in choppy trading for U.S. regional banks"
By Chibuike Oguh and Medha Singh
May 9, 2023
May 9 (Reuters) - PacWest Bancorp shares regained earlier session losses on Tuesday as investor uncertainty about the financial health of U.S. regional banks underpinned skittish trading in their stocks.
PacWest rose 2.3% after losing as much as 10% earlier in the day following a decision by the Los Angeles-based lender to cut its quarterly dividend in an effort to bolster its liquidity.
The bank's stock has rallied by more than 92% in the last three sessions after a bruising sell-off sent it to a record low last week.
"We believe that PacWest and other banks have not been trading in line with their fundamentals," said Piper Sandler analyst Matthew Clark, who currently has an "overweight" rating on PacWest shares.
The shares of other regional banks were also choppy.
Western Alliance fell 1.4%, Valley National Bancorp lost 1.5%, First Horizon Corp shed 1.3%, and Synovus Financial Corp dropped nearly 1%.
But Comerica Inc and Zion Bancorp were up 0.39% and 0.66%, respectively.
The KBW Regional Banking Index dropped 0.72% on Tuesday and was hovering near its 30-month low hit last week after the collapse of First Republic Bank and PacWest's decision to explore strategic options.
"Volatility is back."
"We had hoped that a resolution of (First Republic) would bring some calm and cooler heads back to the market."
"Instead, it seemed only to re-intensify wild price swings," Piper Sandler analysts, led by Scott Siefers, wrote in a note to investors.
New York Federal Reserve President John Williams on Tuesday said the U.S. banking system remained sound and resilient, and that the acute phase of the ongoing crisis was likely over, with problems limited only to a few banks.
Williams also said Fed was eyeing an end to the rate-hike cycle as inflation pressures have eased a bit and tighter financial conditions tied to banking sector troubles were expected to help further cool the economy.
PacWest and Western Alliance, which have been at the heart of the recent sell-off in regional banks, saw the steepest drop in deposits in the first quarter after First Republic Bank, according to S&P Global Market Intelligence data.
Analysts have called on the Federal Deposit Insurance Corp (FDIC), which currently insures $250,000 in deposits per person per bank, to raise its deposit coverage to end the current crisis with regional banks.
The FDIC released a report last week, saying it saw merits in increasing the backstop for business accounts.
"The FDIC needs to raise its limits because that's what will going to instill confidence in people and stop them from moving their money to larger banks," said Michael Ashley Schulman, chief investment officer at Running Point Capital in California.
"Otherwise smaller banks will be destroyed."
Reporting by Medha Singh in Bengaluru, additional reporting by Bansari Mayur Kamdar; Editing by Arun Koyyur
https://www.reuters.com/markets/us/pacw ... 023-05-09/
Re: LEST WE FORGET THE LOOTERS
REUTERS
"PacWest shares plunge after it reports drop in deposits"
By Niket Nishant and Chibuike Oguh
May 11, 2023
May 11 (Reuters) - Shares of PacWest Bancorp plunged 23% on Thursday after the Los-Angeles-based lender said its deposits declined and that it had posted more collateral to the U.S. Federal Reserve to boost its liquidity.
PacWest deposits fell 9.5% or $1.5 billion last week, with the majority of those outflows occurring on May 4 and May 5 following news reports that the bank was exploring options to bolster its finances, including a sale.
PacWest is one of several U.S. regional lenders whose shares have been hit this month by investor concerns over the health of the sector following the collapse of three banks since March.
"The news headlines increased our customers' fears of the safety of their deposits," the bank said.
Shares of PacWest and other regional lenders fell sharply on Thursday after the Federal Deposit Insurance Corporation said that around 113 of the country's largest lenders will bear the cost of replenishing the $16 billion hit to its deposit insurance fund caused by recent bank failures.
A new "special assessment" fee of 0.125% would be applied to the uninsured deposits of banks in excess of $5 billion, based on the amount of uninsured deposits a bank held at the end of 2022, the FDIC said.
KeyCorp and Zions Bancorp shed 2.5% and 4.5%, respectively.
Valley National Bancorp fell 2.8% and Comerica Inc lost 6.8%.
The KBW Regional Banking Index dropped 2.4%.
PacWest said it had funded the shortfall in its deposits with cash from its balance sheet and then pledged $5.1 billion of its assets to the Fed to secure additional liquidity of $3.9 billion.
As a result, the bank said it had $15 billion of immediate liquidity, which is 288% higher than its $5.2 billion of total uninsured deposits.
"The deposit fall seems to have overshadowed things but overall it was a positive update," said Wells Fargo analyst Jared Shaw, who has assigned an "equal weight" to PacWest shares.
"It showed that they had liquidity and that they were still able to sell their loans."
PacWest shares, which have lost nearly 40% so far this month and plunged to a record low last week, dropped a further 23% on Thursday.
Short sellers have made $123.76 million by betting against PacWest, according to data from analytics firm Ortex.
Western Alliance, meanwhile, reported that its total deposits rose by nearly $600 million to $49.4 billion and that its immediate liquidity was almost double its uninsured deposits.
The bank's shares, which also slumped last week on investor worries over its health, lost 0.77%.
"It feels as if things are more stable at Western Alliance and they have been able to deal with the challenges," Shaw said.
A PacWest spokesperson did not immediately respond to a request for comment, while Western Alliance declined to comment.
BE PREPARED
JPMorgan Chase & CO CEO Jamie Dimon said on Thursday that regional banks are "quite strong" after reporting good earnings, and that the industry and regulators should "just be prepared for problems."
Dimon said he anticipated more bank regulation stemming from the crisis, adding that authorities, including the U.S. Securities and Exchange Commission (SEC), should investigate short selling on bank stocks and potential collusion via social media posts.
JPMorgan had agreed last week to acquire First Republic Bank in a $10.6 billion deal engineered by regulators.
A study by New York Fed researchers also released on Thursday showed that shuffling of bank deposits following the collapse of Silicon Valley Bank, which triggered concerns about a broader crisis, was largely confined to "super regional" institutions in the $50 billion to $250 billion range.
Deposits among "community and smaller regional banks ... were relatively stable by comparison," the researchers found, with the largest banks receiving inflows as money left the super-regional group.
Reporting by Niket Nishant in Bengaluru; Editing by Krishna Chandra Eluri
https://www.reuters.com/business/financ ... 023-05-11/
"PacWest shares plunge after it reports drop in deposits"
By Niket Nishant and Chibuike Oguh
May 11, 2023
May 11 (Reuters) - Shares of PacWest Bancorp plunged 23% on Thursday after the Los-Angeles-based lender said its deposits declined and that it had posted more collateral to the U.S. Federal Reserve to boost its liquidity.
PacWest deposits fell 9.5% or $1.5 billion last week, with the majority of those outflows occurring on May 4 and May 5 following news reports that the bank was exploring options to bolster its finances, including a sale.
PacWest is one of several U.S. regional lenders whose shares have been hit this month by investor concerns over the health of the sector following the collapse of three banks since March.
"The news headlines increased our customers' fears of the safety of their deposits," the bank said.
Shares of PacWest and other regional lenders fell sharply on Thursday after the Federal Deposit Insurance Corporation said that around 113 of the country's largest lenders will bear the cost of replenishing the $16 billion hit to its deposit insurance fund caused by recent bank failures.
A new "special assessment" fee of 0.125% would be applied to the uninsured deposits of banks in excess of $5 billion, based on the amount of uninsured deposits a bank held at the end of 2022, the FDIC said.
KeyCorp and Zions Bancorp shed 2.5% and 4.5%, respectively.
Valley National Bancorp fell 2.8% and Comerica Inc lost 6.8%.
The KBW Regional Banking Index dropped 2.4%.
PacWest said it had funded the shortfall in its deposits with cash from its balance sheet and then pledged $5.1 billion of its assets to the Fed to secure additional liquidity of $3.9 billion.
As a result, the bank said it had $15 billion of immediate liquidity, which is 288% higher than its $5.2 billion of total uninsured deposits.
"The deposit fall seems to have overshadowed things but overall it was a positive update," said Wells Fargo analyst Jared Shaw, who has assigned an "equal weight" to PacWest shares.
"It showed that they had liquidity and that they were still able to sell their loans."
PacWest shares, which have lost nearly 40% so far this month and plunged to a record low last week, dropped a further 23% on Thursday.
Short sellers have made $123.76 million by betting against PacWest, according to data from analytics firm Ortex.
Western Alliance, meanwhile, reported that its total deposits rose by nearly $600 million to $49.4 billion and that its immediate liquidity was almost double its uninsured deposits.
The bank's shares, which also slumped last week on investor worries over its health, lost 0.77%.
"It feels as if things are more stable at Western Alliance and they have been able to deal with the challenges," Shaw said.
A PacWest spokesperson did not immediately respond to a request for comment, while Western Alliance declined to comment.
BE PREPARED
JPMorgan Chase & CO CEO Jamie Dimon said on Thursday that regional banks are "quite strong" after reporting good earnings, and that the industry and regulators should "just be prepared for problems."
Dimon said he anticipated more bank regulation stemming from the crisis, adding that authorities, including the U.S. Securities and Exchange Commission (SEC), should investigate short selling on bank stocks and potential collusion via social media posts.
JPMorgan had agreed last week to acquire First Republic Bank in a $10.6 billion deal engineered by regulators.
A study by New York Fed researchers also released on Thursday showed that shuffling of bank deposits following the collapse of Silicon Valley Bank, which triggered concerns about a broader crisis, was largely confined to "super regional" institutions in the $50 billion to $250 billion range.
Deposits among "community and smaller regional banks ... were relatively stable by comparison," the researchers found, with the largest banks receiving inflows as money left the super-regional group.
Reporting by Niket Nishant in Bengaluru; Editing by Krishna Chandra Eluri
https://www.reuters.com/business/financ ... 023-05-11/
Re: LEST WE FORGET THE LOOTERS
REUTERS
"U.S. regional bank stocks creep higher in skittish trading"
Reuters
May 12, 2023
May 12 (Reuters) - Shares of major U.S. regional lenders edged higher on Friday, reversing early losses in skittish trading as investors bought some battered stocks but remained uncertain about the financial stability of mid-sized banks.
Western Alliance rose 2.1%, Synovus Financial gained 2.2%, and Truist Financial added 1.8%.
The KBW Regional Banking index, which has fallen nearly 14% so far this month, was up 0.39%.
But PacWest Bancorp, which lost 23% on Thursday after reporting a decline in deposits, dropped nearly 3%.
Comerica Inc, Valley National Bancorp and KeyCorp fell 2.14%, 1.1% and 1.1%%, respectively.
"More U.S. banks have been in the market crosshairs ... despite many of the pressured banks having generally solid credit fundamentals," DBRS Morningstar analysts said, adding that investor fears would likely persist until regulators extended deposit insurance or barred investors from betting against stocks, a practice known as short selling.
Markets are eyeing negotiations over the U.S. debt ceiling, with President Joe Biden's Democrats and Republicans, who control the House of Representatives, at odds over raising the country's borrowing cap.
The U.S. faces a "significant risk" of defaulting on payment obligations within the first two weeks of June without a debt ceiling increase, the Congressional Budget Office said.
U.S. Treasury Secretary Janet Yellen will discuss the impasse next week with board members of the Bank Policy Institute - which includes JPMorgan Chase CEO Jamie Dimon and Citigroup CEO Jane Fraser - a Treasury official told Reuters.
All three major Wall Street indexes, including the S&P 500, closed lower after data showed U.S. consumer sentiment slumped to a six-month low.
"Markets will focus on banking fears, debt ceiling concerns," among other economic indicators, TD Securities analysts wrote in an investor note.
On Thursday, the Federal Deposit Insurance Corporation said it will replenish its deposit insurance fund by imposing a special assessment fee of 0.125% on uninsured deposits of lenders in excess of $5 billion, although analysts said the levy should not be a worry for banks.
"While the special assessment is meaningful in terms of dollars overall to the industry, it is not as meaningful on a per-bank basis," Raymond James analysts wrote in a note.
Shares of Charles Schwab rose 2.5% after the brokerage firm said that so far in May, it had seen fewer clients move funds away from its accounts to other high-yield products.
The pace of such "cash realignment" has slowed for three straight months and will abate during 2023, it said.
Reporting by Niket Nishant in Bengaluru; Editing by Devika Syamnath
https://www.reuters.com/business/financ ... 023-05-12/
"U.S. regional bank stocks creep higher in skittish trading"
Reuters
May 12, 2023
May 12 (Reuters) - Shares of major U.S. regional lenders edged higher on Friday, reversing early losses in skittish trading as investors bought some battered stocks but remained uncertain about the financial stability of mid-sized banks.
Western Alliance rose 2.1%, Synovus Financial gained 2.2%, and Truist Financial added 1.8%.
The KBW Regional Banking index, which has fallen nearly 14% so far this month, was up 0.39%.
But PacWest Bancorp, which lost 23% on Thursday after reporting a decline in deposits, dropped nearly 3%.
Comerica Inc, Valley National Bancorp and KeyCorp fell 2.14%, 1.1% and 1.1%%, respectively.
"More U.S. banks have been in the market crosshairs ... despite many of the pressured banks having generally solid credit fundamentals," DBRS Morningstar analysts said, adding that investor fears would likely persist until regulators extended deposit insurance or barred investors from betting against stocks, a practice known as short selling.
Markets are eyeing negotiations over the U.S. debt ceiling, with President Joe Biden's Democrats and Republicans, who control the House of Representatives, at odds over raising the country's borrowing cap.
The U.S. faces a "significant risk" of defaulting on payment obligations within the first two weeks of June without a debt ceiling increase, the Congressional Budget Office said.
U.S. Treasury Secretary Janet Yellen will discuss the impasse next week with board members of the Bank Policy Institute - which includes JPMorgan Chase CEO Jamie Dimon and Citigroup CEO Jane Fraser - a Treasury official told Reuters.
All three major Wall Street indexes, including the S&P 500, closed lower after data showed U.S. consumer sentiment slumped to a six-month low.
"Markets will focus on banking fears, debt ceiling concerns," among other economic indicators, TD Securities analysts wrote in an investor note.
On Thursday, the Federal Deposit Insurance Corporation said it will replenish its deposit insurance fund by imposing a special assessment fee of 0.125% on uninsured deposits of lenders in excess of $5 billion, although analysts said the levy should not be a worry for banks.
"While the special assessment is meaningful in terms of dollars overall to the industry, it is not as meaningful on a per-bank basis," Raymond James analysts wrote in a note.
Shares of Charles Schwab rose 2.5% after the brokerage firm said that so far in May, it had seen fewer clients move funds away from its accounts to other high-yield products.
The pace of such "cash realignment" has slowed for three straight months and will abate during 2023, it said.
Reporting by Niket Nishant in Bengaluru; Editing by Devika Syamnath
https://www.reuters.com/business/financ ... 023-05-12/
Re: LEST WE FORGET THE LOOTERS
REUTERS
"Ex-Silicon Valley Bank CEO defends record, regulators vow tougher supervision"
By Hannah Lang, Tatiana Bautzer, Pete Schroeder and Ann Saphir
May 16, 2023
Summary
* Ex-SVB CEO says unaware of bank's troubles when he sold stock
* Former Signature Bank executives deny firm was mismanaged
* Fed investigating SVB bonuses paid out day bank failed
NEW YORK, May 16 (Reuters) - The former chief executive of Silicon Valley Bank defended the U.S. lender's efforts to manage risk in his first public comments after the bank's shock collapse, as regulators promised better supervision to prevent more such failures.
The top executives at SVB and another failed lender, Signature Bank, as well regulators overseeing them appeared at separate congressional hearings on Tuesday to be grilled by senators demanding an account of why the banks collapsed.
California banking regulators shut down Silicon Valley Bank on March 10 after depositors withdrew $42 billion in 24 hours, sparking a rout in bank shares globally and investor fears of contagion spreading to other banks.
Two other U.S. regional lenders - including Signature - have since failed, marking the biggest turmoil to grip banks since the 2008 financial crisis.
In his comments, former SVB CEO Greg Becker painted a picture of an unprecedented, unforeseeable crisis that unfolded at lightning speed despite the bank taking risk management seriously and having liquidity of around $80 billion at the end of last year.
"I believe it was a series of unprecedented events that all came together in the fastest bank run in history," Becker told the Senate Banking Committee.
In a separate House of Representatives hearing, top banking regulators vowed to ensure supervisors more aggressively police lenders.
RISK ON?
Tuesday's hearing for the first time offered lawmakers the opportunity to grill Becker, who has been criticized for failing to address risk-management issues that had been flagged by regulators.
Some lawmakers have also rebuked Becker for dishing out bonuses and have questioned whether he and other executives profited from stock sales ahead of the bank's collapse.
Becker sold SVB stock in the first quarter with the largest sales on Feb 27, public records show.
He said he was unaware the bank was in trouble at the time.
"I was the CEO of Silicon Valley Bank, I take responsibility for what ultimately happened," Becker said.
Lawmakers on both sides of the partisan divide, though, were unimpressed.
"Why did you ignore admonitions from regulators?" Senator Sherrod Brown, a Democrat, said in his opening statement.
"There is a simple answer, the same answer we find for most big bank failures -- because the executives were getting rich."
Executives from Signature Bank also testified alongside Becker on Tuesday, pushing back on assertions from lawmakers that the bank had weak corporate governance.
"I don't believe that there was mismanagement at the bank," said Eric Howell, the former president of Signature Bank.
Responding to criticism about SVB lacking a chief risk officer in the months leading up to its collapse, Becker said he had been told by regulators to look for a more experienced executive for the position.
He also said he would cooperate with regulators as they reviewed SVB's executive compensation.
SVB's downfall was triggered by holdings of long-term Treasuries losing value as interest rates rose quickly - a risk the bank had not hedged.
It was instead forced to borrow in the short term at higher rates while maintaining long-term loans on its books that were made when rates were low.
The bank tried to cover the loss by raising capital, but in announcing the transaction helped fuel a bank run.
"Mr. Becker you made a really stupid bet that went bad, didn't you," said Senator John Kennedy, a Republican.
"And the taxpayers of America had to pick up the tab for your stupidity."
Becker rebuffed regulators' assertions that SVB failed to manage interest rate risks in his prepared testimony, saying that up until late 2021, the Federal Reserve had indicated that interest rates would remain low and that rising inflation was merely transitory.
TOUGHER RULES COMING
At a separate hearing, the Federal Reserve's top regulatory official told House members the central bank was investigating a payout of executive bonuses at SVB hours before it was closed by regulators, calling it "outrageous."
SVB employees received annual bonuses March 10 just hours before the bank was shuttered, according to media reports.
At the other hearing, Becker told lawmakers that the bonuses were for employees' performances in 2022 and that the bank's human resources department had scheduled the payment date in advance without his knowledge.
Fed Vice Chair for Supervision Michael Barr also said the Federal Reserve will unveil a plan for overhauling bank capital and liquidity rules this summer, which could include tougher rules on banks similar in size to SVB and Signature.
Such lenders had previously had rules relaxed under the Trump administration, but Barr said the Fed was "carefully considering" rule changes for larger regional banks of over $100 billion in assets.
Reporting by Tatiana Bautzer and Saeed Azhar in New York
https://www.reuters.com/business/financ ... 023-05-16/
"Ex-Silicon Valley Bank CEO defends record, regulators vow tougher supervision"
By Hannah Lang, Tatiana Bautzer, Pete Schroeder and Ann Saphir
May 16, 2023
Summary
* Ex-SVB CEO says unaware of bank's troubles when he sold stock
* Former Signature Bank executives deny firm was mismanaged
* Fed investigating SVB bonuses paid out day bank failed
NEW YORK, May 16 (Reuters) - The former chief executive of Silicon Valley Bank defended the U.S. lender's efforts to manage risk in his first public comments after the bank's shock collapse, as regulators promised better supervision to prevent more such failures.
The top executives at SVB and another failed lender, Signature Bank, as well regulators overseeing them appeared at separate congressional hearings on Tuesday to be grilled by senators demanding an account of why the banks collapsed.
California banking regulators shut down Silicon Valley Bank on March 10 after depositors withdrew $42 billion in 24 hours, sparking a rout in bank shares globally and investor fears of contagion spreading to other banks.
Two other U.S. regional lenders - including Signature - have since failed, marking the biggest turmoil to grip banks since the 2008 financial crisis.
In his comments, former SVB CEO Greg Becker painted a picture of an unprecedented, unforeseeable crisis that unfolded at lightning speed despite the bank taking risk management seriously and having liquidity of around $80 billion at the end of last year.
"I believe it was a series of unprecedented events that all came together in the fastest bank run in history," Becker told the Senate Banking Committee.
In a separate House of Representatives hearing, top banking regulators vowed to ensure supervisors more aggressively police lenders.
RISK ON?
Tuesday's hearing for the first time offered lawmakers the opportunity to grill Becker, who has been criticized for failing to address risk-management issues that had been flagged by regulators.
Some lawmakers have also rebuked Becker for dishing out bonuses and have questioned whether he and other executives profited from stock sales ahead of the bank's collapse.
Becker sold SVB stock in the first quarter with the largest sales on Feb 27, public records show.
He said he was unaware the bank was in trouble at the time.
"I was the CEO of Silicon Valley Bank, I take responsibility for what ultimately happened," Becker said.
Lawmakers on both sides of the partisan divide, though, were unimpressed.
"Why did you ignore admonitions from regulators?" Senator Sherrod Brown, a Democrat, said in his opening statement.
"There is a simple answer, the same answer we find for most big bank failures -- because the executives were getting rich."
Executives from Signature Bank also testified alongside Becker on Tuesday, pushing back on assertions from lawmakers that the bank had weak corporate governance.
"I don't believe that there was mismanagement at the bank," said Eric Howell, the former president of Signature Bank.
Responding to criticism about SVB lacking a chief risk officer in the months leading up to its collapse, Becker said he had been told by regulators to look for a more experienced executive for the position.
He also said he would cooperate with regulators as they reviewed SVB's executive compensation.
SVB's downfall was triggered by holdings of long-term Treasuries losing value as interest rates rose quickly - a risk the bank had not hedged.
It was instead forced to borrow in the short term at higher rates while maintaining long-term loans on its books that were made when rates were low.
The bank tried to cover the loss by raising capital, but in announcing the transaction helped fuel a bank run.
"Mr. Becker you made a really stupid bet that went bad, didn't you," said Senator John Kennedy, a Republican.
"And the taxpayers of America had to pick up the tab for your stupidity."
Becker rebuffed regulators' assertions that SVB failed to manage interest rate risks in his prepared testimony, saying that up until late 2021, the Federal Reserve had indicated that interest rates would remain low and that rising inflation was merely transitory.
TOUGHER RULES COMING
At a separate hearing, the Federal Reserve's top regulatory official told House members the central bank was investigating a payout of executive bonuses at SVB hours before it was closed by regulators, calling it "outrageous."
SVB employees received annual bonuses March 10 just hours before the bank was shuttered, according to media reports.
At the other hearing, Becker told lawmakers that the bonuses were for employees' performances in 2022 and that the bank's human resources department had scheduled the payment date in advance without his knowledge.
Fed Vice Chair for Supervision Michael Barr also said the Federal Reserve will unveil a plan for overhauling bank capital and liquidity rules this summer, which could include tougher rules on banks similar in size to SVB and Signature.
Such lenders had previously had rules relaxed under the Trump administration, but Barr said the Fed was "carefully considering" rule changes for larger regional banks of over $100 billion in assets.
Reporting by Tatiana Bautzer and Saeed Azhar in New York
https://www.reuters.com/business/financ ... 023-05-16/
Re: LEST WE FORGET THE LOOTERS
REUTERS
"Fed emergency lending to banks little changed in latest week"
By Reuters Staff
MAY 18, 2023
NEW YORK, May 18 (Reuters) - Banks’ emergency borrowing from the Federal Reserve was little changed in the latest week, central bank data released on Thursday showed.
The Fed reported discount window borrowing moved to $9 billion on Wednesday from $9.3 billion the week before, while Bank Term Funding Program lending hit $87 billion, from $83.1 billion on May 10.
Meanwhile, Fed “other credit” tied to winding down failed banks stood at $208.5 billion on Wednesday, from $212.5 billion the prior week.
Altogether, emergency lending from the three programs stood at $304.5 billion, from $304.9 billion on May 10.
(Reporting by Michael S. Derby; Editing by Chris Reese)
https://www.reuters.com/article/usa-fed ... SS0N37F02T
"Fed emergency lending to banks little changed in latest week"
By Reuters Staff
MAY 18, 2023
NEW YORK, May 18 (Reuters) - Banks’ emergency borrowing from the Federal Reserve was little changed in the latest week, central bank data released on Thursday showed.
The Fed reported discount window borrowing moved to $9 billion on Wednesday from $9.3 billion the week before, while Bank Term Funding Program lending hit $87 billion, from $83.1 billion on May 10.
Meanwhile, Fed “other credit” tied to winding down failed banks stood at $208.5 billion on Wednesday, from $212.5 billion the prior week.
Altogether, emergency lending from the three programs stood at $304.5 billion, from $304.9 billion on May 10.
(Reporting by Michael S. Derby; Editing by Chris Reese)
https://www.reuters.com/article/usa-fed ... SS0N37F02T