REUTERS
"Fed lending to banks ticks slightly lower in latest week"
By Michael S. Derby
MARCH 30, 2023
WASHINGTON (Reuters) - Federal Reserve emergency lending to banks ebbed slightly in the latest week, causing the size of the central bank balance sheet to move down modestly.
As of Wednesday, banks tapped $88.2 billion from the central bank’s discount window lending facility, versus $110.2 billion on March 22.
Lending via the Fed’s new Bank Term Funding Program moved to $64.4 billion on Wednesday, from $53.7 billion the week before, while Fed “other credit” lending stood at $180.1 billion, from March 22’s $179.8 billion.
The three facilities extended a total of $332.7 billion to eligible firms on Wednesday, versus $343.7 billion the prior Wednesday.
The overall size of the Fed’s balance sheet fell to $8.756 trillion, from $8.784 trillion on March 22.
Reporting by Michael S. Derby; Editing by Chris Reese
https://www.reuters.com/article/usa-fed ... SN9N30X01L
LEST WE FORGET THE LOOTERS
Re: LEST WE FORGET THE LOOTERS
REUTERS
"White House pushes new rules for mid-sized banks without Congress"
By Andrea Shalal and Pete Schroeder
March 30, 2023
WASHINGTON, March 30 (Reuters) - The Biden administration urged banking authorities to tighten regulation of mid-sized banks, which it said could be pushed through without support from a split Congress.
Banks with between $100 billion and $250 billion in assets should hold more liquid assets, increase their capital, submit to regular stress tests and write "living wills" that detail how they can be wound down, the White House said.
"These are all actions that can be taken under existing law and as a result, there's no need for congressional action in order to authorize the agencies to take any of these steps," said a senior White House official.
The White House's push for more regulation comes three weeks after the collapse of U.S. lenders Silicon Valley Bank and Signature Bank triggered market turmoil.
Banking stocks reeled globally and the tumult prompted a government-orchestrated rescue takeover for Switzerland's Credit Suisse.
The White House proposals add momentum to the efforts of the Federal Reserve and other bank regulators to tighten oversight.
Regulators told lawmakers this week that they are already looking to strengthen rules, particularly for mid-size lenders with between $100 billion and $250 billion in assets.
"Today, the president is urging the federal banking agencies to consider a set of reforms that will reduce the risk of future banking crises," the official said, underscoring the need to protect "the resilience and stability of the banking system going forward."
A 2018 law that eased requirements from the post-financial crisis Dodd-Frank Act, pushed by Republicans and some moderate Democrats, raised the threshold at which banks are considered systemically risky and subject to stricter oversight to $250 billion from $50 billion.
Silicon Valley Bank had $209 billion in assets at the end of last year.
President Joe Biden's administration also called on regulators to require mid-sized institutions to undergo annual stress tests that bigger banks already face, and to submit so-called "living wills," or resolution plans.
Oppenheimer bank analyst Chris Kotowski said evening out the regulatory playing field for big and small banks was welcome but that there should be a "reasonable" period to phase in the changes.
'READY, FIRE, AIM'
The proposals were immediately criticized by bank lobbyists.
Bank Policy Institute head Greg Baer said imposing more regulation on all banks would drive costs higher in the economy.
"It would be unfortunate if the response to bad management and delinquent supervision at SVB were additional regulation on all banks," he said in a statement.
"The Fed has barely begun its promised review."
"This has a strong feeling of 'ready, fire, aim.'"
Partially reinstating the rules rolled back under former President Donald Trump's administration would affect fewer than two dozen firms out of a total of more than 4,000 FDIC-insured U.S. banks.
The banks which would qualify, according to Fed data, include Citizens Financial Group, First Republic Corp, Fifth Third, Huntington and Regions.
The banks did not immediately respond to requests for comment.
According to Federal Reserve data, about 30 banks had assets of more than $100 billion at the end of last year, a list that included Silicon Valley Bank and Signature Bank.
Nearly half of those were already subject to tougher scrutiny because they had more than $250 billion in assets, and a handful of banks were on the cusp of crossing that threshold.
The Federal Reserve's top regulator told Congress this week that Silicon Valley did a "terrible" job at risk management, but Republicans and Democrats have also criticized regulators and the agency for lax oversight.
Some Democrats, including Senator Elizabeth Warren, have called for the repeal of the 2018 changes entirely.
But the prospects of legislation are unlikely given Republican control of the House of Representatives, according to analysts.
Warren welcomed Biden's push for stronger bank rules and said bank executives had "loaded up on risk to boost profits" after rules were weakened under Trump and Federal Reserve Chair Jerome Powell.
"Earlier this week, financial regulators committed in the Senate Banking Committee to do exactly what President Biden is calling for: strengthen our banking rules going forward to ensure the safety of our economy," she said on Twitter.
The White House official said senior administration officials had been in close touch with regulators about the proposed changes, but said the timing of any action would be up to the agencies, which are independent.
Reporting by Andrea Shalal and Pete Schroeder; additional reporting by Nandita Bose, Dan Burns, Tatiana Bautzer, Saeed Azhar, Lananh Nguyen; Editing by Rami Ayyub, Heather Timmons, Andrea Ricci and Deepa Babington
https://www.reuters.com/markets/us/whit ... 023-03-30/
"White House pushes new rules for mid-sized banks without Congress"
By Andrea Shalal and Pete Schroeder
March 30, 2023
WASHINGTON, March 30 (Reuters) - The Biden administration urged banking authorities to tighten regulation of mid-sized banks, which it said could be pushed through without support from a split Congress.
Banks with between $100 billion and $250 billion in assets should hold more liquid assets, increase their capital, submit to regular stress tests and write "living wills" that detail how they can be wound down, the White House said.
"These are all actions that can be taken under existing law and as a result, there's no need for congressional action in order to authorize the agencies to take any of these steps," said a senior White House official.
The White House's push for more regulation comes three weeks after the collapse of U.S. lenders Silicon Valley Bank and Signature Bank triggered market turmoil.
Banking stocks reeled globally and the tumult prompted a government-orchestrated rescue takeover for Switzerland's Credit Suisse.
The White House proposals add momentum to the efforts of the Federal Reserve and other bank regulators to tighten oversight.
Regulators told lawmakers this week that they are already looking to strengthen rules, particularly for mid-size lenders with between $100 billion and $250 billion in assets.
"Today, the president is urging the federal banking agencies to consider a set of reforms that will reduce the risk of future banking crises," the official said, underscoring the need to protect "the resilience and stability of the banking system going forward."
A 2018 law that eased requirements from the post-financial crisis Dodd-Frank Act, pushed by Republicans and some moderate Democrats, raised the threshold at which banks are considered systemically risky and subject to stricter oversight to $250 billion from $50 billion.
Silicon Valley Bank had $209 billion in assets at the end of last year.
President Joe Biden's administration also called on regulators to require mid-sized institutions to undergo annual stress tests that bigger banks already face, and to submit so-called "living wills," or resolution plans.
Oppenheimer bank analyst Chris Kotowski said evening out the regulatory playing field for big and small banks was welcome but that there should be a "reasonable" period to phase in the changes.
'READY, FIRE, AIM'
The proposals were immediately criticized by bank lobbyists.
Bank Policy Institute head Greg Baer said imposing more regulation on all banks would drive costs higher in the economy.
"It would be unfortunate if the response to bad management and delinquent supervision at SVB were additional regulation on all banks," he said in a statement.
"The Fed has barely begun its promised review."
"This has a strong feeling of 'ready, fire, aim.'"
Partially reinstating the rules rolled back under former President Donald Trump's administration would affect fewer than two dozen firms out of a total of more than 4,000 FDIC-insured U.S. banks.
The banks which would qualify, according to Fed data, include Citizens Financial Group, First Republic Corp, Fifth Third, Huntington and Regions.
The banks did not immediately respond to requests for comment.
According to Federal Reserve data, about 30 banks had assets of more than $100 billion at the end of last year, a list that included Silicon Valley Bank and Signature Bank.
Nearly half of those were already subject to tougher scrutiny because they had more than $250 billion in assets, and a handful of banks were on the cusp of crossing that threshold.
The Federal Reserve's top regulator told Congress this week that Silicon Valley did a "terrible" job at risk management, but Republicans and Democrats have also criticized regulators and the agency for lax oversight.
Some Democrats, including Senator Elizabeth Warren, have called for the repeal of the 2018 changes entirely.
But the prospects of legislation are unlikely given Republican control of the House of Representatives, according to analysts.
Warren welcomed Biden's push for stronger bank rules and said bank executives had "loaded up on risk to boost profits" after rules were weakened under Trump and Federal Reserve Chair Jerome Powell.
"Earlier this week, financial regulators committed in the Senate Banking Committee to do exactly what President Biden is calling for: strengthen our banking rules going forward to ensure the safety of our economy," she said on Twitter.
The White House official said senior administration officials had been in close touch with regulators about the proposed changes, but said the timing of any action would be up to the agencies, which are independent.
Reporting by Andrea Shalal and Pete Schroeder; additional reporting by Nandita Bose, Dan Burns, Tatiana Bautzer, Saeed Azhar, Lananh Nguyen; Editing by Rami Ayyub, Heather Timmons, Andrea Ricci and Deepa Babington
https://www.reuters.com/markets/us/whit ... 023-03-30/
Re: LEST WE FORGET THE LOOTERS
REUTERS
"White House: Monitoring situation at First Republic, could step in if needed"
By Andrea Shalal
April 27, 2023
WASHINGTON, April 27 (Reuters) - The White House is continuing to monitor the situation at First Republic Bank, which has continued to lose deposits this week, spokesperson Karine Jean-Pierre said on Thursday, vowing that the Biden administration stood ready to take action if needed.
Deposits at regional banks have stabilized and the Biden administration can use the same tools it used in recent weeks to address financial stress if needed, she said.
Jean-Pierre said financial regulators and Treasury Secretary Janet Yellen agreed that the U.S. banking system remained sound after "decisive and forceful" actions were taken last month to protect depositors at two regional banks, Silicon Valley Bank and Signature Bank, and provide liquidity to the market.
"We have used important tools to quickly stabilize the banking system."
"We could use those tools again, if needed."
"Certainly we are monitoring this situation," she told reporters when asked about growing market worries about First Republic.
First Republic's shares were trading higher on Thursday after a bruising sell-off that wiped out 60% of the stock's value this week following the San Francisco-based bank's disclosure on Monday that it had lost more than $100 billion of deposits in the first quarter of the year.
Pressed to explain the administration's views on whether to protect depositors in First Republic, as it did in the cases of SVB and Signature, Jean-Pierre said, "We have proven how we have moved really quickly in ... taking decisive and forceful actions in the past, and I can assure you that you'll see that again from this administration."
Reporting by Andrea Shalal; Writing by Moira Warburton; Editing by Tim ahmann
https://www.reuters.com/markets/us/whit ... 023-04-27/
"White House: Monitoring situation at First Republic, could step in if needed"
By Andrea Shalal
April 27, 2023
WASHINGTON, April 27 (Reuters) - The White House is continuing to monitor the situation at First Republic Bank, which has continued to lose deposits this week, spokesperson Karine Jean-Pierre said on Thursday, vowing that the Biden administration stood ready to take action if needed.
Deposits at regional banks have stabilized and the Biden administration can use the same tools it used in recent weeks to address financial stress if needed, she said.
Jean-Pierre said financial regulators and Treasury Secretary Janet Yellen agreed that the U.S. banking system remained sound after "decisive and forceful" actions were taken last month to protect depositors at two regional banks, Silicon Valley Bank and Signature Bank, and provide liquidity to the market.
"We have used important tools to quickly stabilize the banking system."
"We could use those tools again, if needed."
"Certainly we are monitoring this situation," she told reporters when asked about growing market worries about First Republic.
First Republic's shares were trading higher on Thursday after a bruising sell-off that wiped out 60% of the stock's value this week following the San Francisco-based bank's disclosure on Monday that it had lost more than $100 billion of deposits in the first quarter of the year.
Pressed to explain the administration's views on whether to protect depositors in First Republic, as it did in the cases of SVB and Signature, Jean-Pierre said, "We have proven how we have moved really quickly in ... taking decisive and forceful actions in the past, and I can assure you that you'll see that again from this administration."
Reporting by Andrea Shalal; Writing by Moira Warburton; Editing by Tim ahmann
https://www.reuters.com/markets/us/whit ... 023-04-27/
Re: LEST WE FORGET THE LOOTERS
REUTERS
"US regulators vow to sharpen oversight as SVB, Signature aftershocks reverberate"
By Ann Saphir, Hannah Lang and Chris Prentice
April 28, 2023
April 28 (Reuters) - U.S. regulators on Friday put large banks on notice that tougher oversight is coming, after the Federal Reserve and Federal Deposit Insurance Corporation detailed their supervisory lapses before deposit runs caused the collapse of Silicon Valley Bank and Signature Bank in March.
Though the banking sector broadly has since stabilized, the far-reaching impact of the failures of those two large regional banks was felt on Friday as an even larger lender, First Republic Bank, teetered on the brink of collapse.
Regulators were preparing to shut San Francisco-based First Republic, a person familiar with the matter told Reuters.
Depositors had pulled $100 billion from accounts at the bank in the panic triggered by the SVB and Signature failures, imperiling its survival.
The Fed's assessment of its inadequacies in identifying problems and pushing for fixes at Santa Clara, California-based SVB came with promises for tougher supervision and stricter rules for banks.
"Our first area of focus will be to improve the speed, force, and agility of supervision," Fed Vice Chair of Supervision Michael Barr said in a letter accompanying a 114-page report supplemented by confidential materials that are typically not made public and which documented rising concern - but little action - over lax risk management.
Barr also signaled plans to subject banks with more than $100 billion in assets to rules currently reserved for bigger rivals, given that increased capital and liquidity requirements would have bolstered SVB's resilience.
"Our experience following SVB's failure demonstrated that it is appropriate to have stronger standards apply to a broader set of firms."
Separately, the FDIC delivered a 63-page account of its failings in the collapse of Signature, and those of the New York-based lender's management, to fix persistent weaknesses in liquidity risk management and over-reliance on uninsured deposits.
Both SVB and Signature failed last month.
"In retrospect, the FDIC could have acted sooner and more forcefully to compel the bank's management and its board to address these deficiencies more quickly and more thoroughly," it said.
Both reports said the banks' managers were primarily to blame for prioritizing growth and ignoring basic risks that set the stage for the failures.
And while they both identified supervisory misjudgments - the Fed's report was particularly scathing - both stopped short of laying the responsibility for the failures at the feet of any specific senior leaders inside their oversight ranks.
The FDIC did point to Signature's ex-CEO Joseph DePaolo, though not by name, as having personally "rejected" examiner concerns about uninsured depositors on March 10, the day of the bank's crippling run.
Former SVB CEO Greg Becker was mentioned only once in the Fed's report - in reference to his having also been on the board of directors at the San Francisco Fed.
REACTION
Before the twin failures in March, banking regulators had focused most of their firepower on the very biggest U.S. banks that were seen as critical to financial stability.
At the Fed that was in part due to new central bank "tailoring" regulations written in 2018 under Barr's predecessor, Randal Quarles, the report said, and to a shift in expectations for supervisors to accumulate more evidence before considering taking action.
Fed staff said they felt pressure during this period to reduce burdens on firms and demonstrate due process, according to the report.
Quarles did not immediately respond to a request for comment.
The lack of forceful examiner action was a "clear failure of supervisory culture," said Senator Tim Scott, the top Republican on the Senate Banking Committee. Scott, a potential U.S. presidential candidate in 2024, pushed back on re-imposing stricter rules that he said would punish well-run banks for the "unique" problems of their failed competitors.
Industry did as well.
"The Federal Reserve's report lays blame at changes to regulation and supervision made in recent years, when its own examination materials make plain the fundamental misjudgments made by its examination teams over that same period," Greg Baer, the president and CEO of the Bank Policy Institute, said in a statement.
Still, any changes would give banks plenty of time to adjust, noted Eric Compton, a banking analyst at Morningstar.
"I think many investors were worried about the regulators dropping the hammer on the whole banking industry, quickly."
'POOR MANAGEMENT'
At SVB, the Fed said, supervisors did not fully appreciate the problems and failed to appropriately escalate certain deficiencies even after they were identified.
At the time of its failure, SVB had 31 unaddressed citations on its safety and soundness, triple what its peers in the banking sector had, the U.S. central bank's report said, including problems with interest-rate-risk modeling that examiners directed be addressed by June 2023.
Regulators shut SVB on March 10, a day after customers withdrew $42 billion and queued requests for another $100 billion the following morning.
The Fed is considering forcing better compliance from management by tying prompt fixes to executive compensation, a senior Fed official indicated on Friday.
Both SVB and Signature grew quickly in recent years, outpacing the ability of regulators to keep up, especially with shrinking resources.
Between 2016 and 2022, as assets in the banking sector grew 37%, the Fed's supervision headcount declined by 3%, according to the report.
In regards to Signature since 2020, an average of 40% of positions in the FDIC's large bank supervisory staff in the New York region were vacant or filled by temporary employees, the FDIC report said.
Signature's failure, the FDIC said in its report, was caused by "poor management" and a pursuit of "rapid, unrestrained growth" with little regard for risk management.
Regulators closed Signature two days after SVB was shuttered.
Signature lost 20% of its total deposits in a matter of hours on the day that SVB failed, FDIC Chair Martin Gruenberg has said.
Reporting by Ann Saphir; Editing by Chris Reese
https://www.reuters.com/business/financ ... 023-04-28/
"US regulators vow to sharpen oversight as SVB, Signature aftershocks reverberate"
By Ann Saphir, Hannah Lang and Chris Prentice
April 28, 2023
April 28 (Reuters) - U.S. regulators on Friday put large banks on notice that tougher oversight is coming, after the Federal Reserve and Federal Deposit Insurance Corporation detailed their supervisory lapses before deposit runs caused the collapse of Silicon Valley Bank and Signature Bank in March.
Though the banking sector broadly has since stabilized, the far-reaching impact of the failures of those two large regional banks was felt on Friday as an even larger lender, First Republic Bank, teetered on the brink of collapse.
Regulators were preparing to shut San Francisco-based First Republic, a person familiar with the matter told Reuters.
Depositors had pulled $100 billion from accounts at the bank in the panic triggered by the SVB and Signature failures, imperiling its survival.
The Fed's assessment of its inadequacies in identifying problems and pushing for fixes at Santa Clara, California-based SVB came with promises for tougher supervision and stricter rules for banks.
"Our first area of focus will be to improve the speed, force, and agility of supervision," Fed Vice Chair of Supervision Michael Barr said in a letter accompanying a 114-page report supplemented by confidential materials that are typically not made public and which documented rising concern - but little action - over lax risk management.
Barr also signaled plans to subject banks with more than $100 billion in assets to rules currently reserved for bigger rivals, given that increased capital and liquidity requirements would have bolstered SVB's resilience.
"Our experience following SVB's failure demonstrated that it is appropriate to have stronger standards apply to a broader set of firms."
Separately, the FDIC delivered a 63-page account of its failings in the collapse of Signature, and those of the New York-based lender's management, to fix persistent weaknesses in liquidity risk management and over-reliance on uninsured deposits.
Both SVB and Signature failed last month.
"In retrospect, the FDIC could have acted sooner and more forcefully to compel the bank's management and its board to address these deficiencies more quickly and more thoroughly," it said.
Both reports said the banks' managers were primarily to blame for prioritizing growth and ignoring basic risks that set the stage for the failures.
And while they both identified supervisory misjudgments - the Fed's report was particularly scathing - both stopped short of laying the responsibility for the failures at the feet of any specific senior leaders inside their oversight ranks.
The FDIC did point to Signature's ex-CEO Joseph DePaolo, though not by name, as having personally "rejected" examiner concerns about uninsured depositors on March 10, the day of the bank's crippling run.
Former SVB CEO Greg Becker was mentioned only once in the Fed's report - in reference to his having also been on the board of directors at the San Francisco Fed.
REACTION
Before the twin failures in March, banking regulators had focused most of their firepower on the very biggest U.S. banks that were seen as critical to financial stability.
At the Fed that was in part due to new central bank "tailoring" regulations written in 2018 under Barr's predecessor, Randal Quarles, the report said, and to a shift in expectations for supervisors to accumulate more evidence before considering taking action.
Fed staff said they felt pressure during this period to reduce burdens on firms and demonstrate due process, according to the report.
Quarles did not immediately respond to a request for comment.
The lack of forceful examiner action was a "clear failure of supervisory culture," said Senator Tim Scott, the top Republican on the Senate Banking Committee. Scott, a potential U.S. presidential candidate in 2024, pushed back on re-imposing stricter rules that he said would punish well-run banks for the "unique" problems of their failed competitors.
Industry did as well.
"The Federal Reserve's report lays blame at changes to regulation and supervision made in recent years, when its own examination materials make plain the fundamental misjudgments made by its examination teams over that same period," Greg Baer, the president and CEO of the Bank Policy Institute, said in a statement.
Still, any changes would give banks plenty of time to adjust, noted Eric Compton, a banking analyst at Morningstar.
"I think many investors were worried about the regulators dropping the hammer on the whole banking industry, quickly."
'POOR MANAGEMENT'
At SVB, the Fed said, supervisors did not fully appreciate the problems and failed to appropriately escalate certain deficiencies even after they were identified.
At the time of its failure, SVB had 31 unaddressed citations on its safety and soundness, triple what its peers in the banking sector had, the U.S. central bank's report said, including problems with interest-rate-risk modeling that examiners directed be addressed by June 2023.
Regulators shut SVB on March 10, a day after customers withdrew $42 billion and queued requests for another $100 billion the following morning.
The Fed is considering forcing better compliance from management by tying prompt fixes to executive compensation, a senior Fed official indicated on Friday.
Both SVB and Signature grew quickly in recent years, outpacing the ability of regulators to keep up, especially with shrinking resources.
Between 2016 and 2022, as assets in the banking sector grew 37%, the Fed's supervision headcount declined by 3%, according to the report.
In regards to Signature since 2020, an average of 40% of positions in the FDIC's large bank supervisory staff in the New York region were vacant or filled by temporary employees, the FDIC report said.
Signature's failure, the FDIC said in its report, was caused by "poor management" and a pursuit of "rapid, unrestrained growth" with little regard for risk management.
Regulators closed Signature two days after SVB was shuttered.
Signature lost 20% of its total deposits in a matter of hours on the day that SVB failed, FDIC Chair Martin Gruenberg has said.
Reporting by Ann Saphir; Editing by Chris Reese
https://www.reuters.com/business/financ ... 023-04-28/
Re: LEST WE FORGET THE LOOTERS
REUTERS
"FDIC prepares to place First Republic under receivership"
By Greg Roumeliotis
April 28, 2023
April 28 (Reuters) - The U.S. Federal Deposit Insurance Corporation is preparing to place First Republic Bank under receivership imminently, a person familiar with the matter said on Friday, sending shares of the lender down nearly 50% in extended trading.
The U.S. banking regulator decided the troubled regional lender's position has deteriorated and there is no more time to pursue a rescue through the private sector, the source told Reuters, requesting anonymity because the matter is confidential.
Big banks including JPMorgan Chase & Co and PNC Financial Services Group are vying to buy First Republic following its seizure by the government, which could come as soon as this weekend, the Wall Street Journal reported on Friday.
PNC, JPMorgan and First Republic declined to comment on the report, while the FDIC did not immediately respond to a request for comment.
If the San Francisco-based lender falls into receivership, it would be the third U.S. bank to collapse since March.
First Republic said this week its deposits had slumped by more than $100 billion in the first quarter.
Shares of the bank closed down 43%, worsening a stock rout that has wiped out 75% of its value this week.
The stock lost more than half of its value on Friday and touched a record low of $2.99.
At its lowest, the bank had a market capitalization of nearly $557 million, a far cry from its peak valuation of more than $40 billion in Nov. 2021.
Shares of some other regional banks also fell, with PacWest Bancorp down 2% after the bell while Western Alliance was down 0.7%.
The FDIC, the Treasury Department and the Federal Reserve were among the government bodies that orchestrated meetings with financial companies about a lifeline for the bank, Reuters reported earlier on Friday.
News of the imminent move to put First Republic in receivership comes the same day the Federal Reserve and FDIC detailed their supervisory lapses before deposit runs caused the collapse of Silicon Valley Bank and Signature Bank in March.
The Fed's assessment of its inadequacies in identifying problems and pushing for fixes at Santa Clara, California-based SVB came with promises for tougher supervision and stricter rules for banks.
Large banks had orchestrated an earlier lifeline for First Republic, placing $30 billion in combined deposits from U.S. banking heavyweights, including Bank of America Corp., Citigroup Inc., JPMorgan and Wells Fargo & Co.
But First Republic struggled to find support from larger banks or private equity firms on its proposed move to create a so called "bad bank" or sell assets such as securities and mortgage book.
The large banks who placed the deposits either declined to comment or were not available to comment.
First Republic, which reported its first-quarter earnings on Monday, had said it plans to shrink its balance sheet and slash expenses by cutting executive compensation, paring back office space and laying off 20% to 25% of employees in the second quarter.
John Guarnera, senior corporate analyst at RBC Bluebay Asset Management, said First Republic case is an "evolving situation."
"The rest of the regional bank system feels like it's in a different place than where FRC is," he said.
Reporting by Medha Singh in Bengaluru; Editing by Saumyadeb Chakrabarty
https://www.reuters.com/business/financ ... 023-04-28/
"FDIC prepares to place First Republic under receivership"
By Greg Roumeliotis
April 28, 2023
April 28 (Reuters) - The U.S. Federal Deposit Insurance Corporation is preparing to place First Republic Bank under receivership imminently, a person familiar with the matter said on Friday, sending shares of the lender down nearly 50% in extended trading.
The U.S. banking regulator decided the troubled regional lender's position has deteriorated and there is no more time to pursue a rescue through the private sector, the source told Reuters, requesting anonymity because the matter is confidential.
Big banks including JPMorgan Chase & Co and PNC Financial Services Group are vying to buy First Republic following its seizure by the government, which could come as soon as this weekend, the Wall Street Journal reported on Friday.
PNC, JPMorgan and First Republic declined to comment on the report, while the FDIC did not immediately respond to a request for comment.
If the San Francisco-based lender falls into receivership, it would be the third U.S. bank to collapse since March.
First Republic said this week its deposits had slumped by more than $100 billion in the first quarter.
Shares of the bank closed down 43%, worsening a stock rout that has wiped out 75% of its value this week.
The stock lost more than half of its value on Friday and touched a record low of $2.99.
At its lowest, the bank had a market capitalization of nearly $557 million, a far cry from its peak valuation of more than $40 billion in Nov. 2021.
Shares of some other regional banks also fell, with PacWest Bancorp down 2% after the bell while Western Alliance was down 0.7%.
The FDIC, the Treasury Department and the Federal Reserve were among the government bodies that orchestrated meetings with financial companies about a lifeline for the bank, Reuters reported earlier on Friday.
News of the imminent move to put First Republic in receivership comes the same day the Federal Reserve and FDIC detailed their supervisory lapses before deposit runs caused the collapse of Silicon Valley Bank and Signature Bank in March.
The Fed's assessment of its inadequacies in identifying problems and pushing for fixes at Santa Clara, California-based SVB came with promises for tougher supervision and stricter rules for banks.
Large banks had orchestrated an earlier lifeline for First Republic, placing $30 billion in combined deposits from U.S. banking heavyweights, including Bank of America Corp., Citigroup Inc., JPMorgan and Wells Fargo & Co.
But First Republic struggled to find support from larger banks or private equity firms on its proposed move to create a so called "bad bank" or sell assets such as securities and mortgage book.
The large banks who placed the deposits either declined to comment or were not available to comment.
First Republic, which reported its first-quarter earnings on Monday, had said it plans to shrink its balance sheet and slash expenses by cutting executive compensation, paring back office space and laying off 20% to 25% of employees in the second quarter.
John Guarnera, senior corporate analyst at RBC Bluebay Asset Management, said First Republic case is an "evolving situation."
"The rest of the regional bank system feels like it's in a different place than where FRC is," he said.
Reporting by Medha Singh in Bengaluru; Editing by Saumyadeb Chakrabarty
https://www.reuters.com/business/financ ... 023-04-28/
Re: LEST WE FORGET THE LOOTERS
REUTERS
"White House: First Republic was 'severely mismanaged'"
By Reuters Staff
MAY 1, 2023
WASHINGTON, May 1 (Reuters) - Decisive actions taken by U.S. regulators to seize First Republic Bank and facilitate its takeover by JPMorgan Chase & Co will protect depositors and ensure the banking system stays stable, White House press secretary Karine Jean-Pierre said on Monday.
Jean-Pierre told reporters that the actions taken by U.S. regulators would also ensure that First Republic, which she said was “severely mismanaged,” would be held accountable.
Reporting by Jeff Mason and Andrea Shalal; Editing by Leslie Adler
https://www.reuters.com/article/first-r ... SS0N36305Z
"White House: First Republic was 'severely mismanaged'"
By Reuters Staff
MAY 1, 2023
WASHINGTON, May 1 (Reuters) - Decisive actions taken by U.S. regulators to seize First Republic Bank and facilitate its takeover by JPMorgan Chase & Co will protect depositors and ensure the banking system stays stable, White House press secretary Karine Jean-Pierre said on Monday.
Jean-Pierre told reporters that the actions taken by U.S. regulators would also ensure that First Republic, which she said was “severely mismanaged,” would be held accountable.
Reporting by Jeff Mason and Andrea Shalal; Editing by Leslie Adler
https://www.reuters.com/article/first-r ... SS0N36305Z
Re: LEST WE FORGET THE LOOTERS
REUTERS
"U.S. Treasury: 'Decisive actions' taken in response to bank failures"
By David Lawder
MAY 1, 2023
WASHINGTON (Reuters) - The U.S. Treasury Department said on Monday that authorities took “decisive actions” in response to the failures of First Republic Bank, Silicon Valley Bank and Signature Bank to strengthen public confidence in the banking system and would continue to do so.
In a statement to the Treasury Borrowing Advisory Committee, Treasury acting assistant secretary for economic policy Eric Van Nostrand said there were positive indications that present credit concerns “are not systemic, persistent, or worsening,” but financial instability and financial sector contagion were important risks to monitor.
Treasury has said little so far about the Federal Deposit Insurance Corp’s auction of First Republic’s assets to JPMorgan Chase & Co to resolve the largest U.S. bank failure since the 2008 financial crisis.
“Today, the banking system remains sound and well capitalized, and we have even seen important signs of strength and stabilization across regional banks,” Van Nostrand said in the statement as the Treasury issued new borrowing estimates.
“The U.S. government is committed to taking action to ensure the system is safe, depositors can feel secure, and institutions can provide credit to families and businesses,” he added.
Reporting by David Lawder; Editing by Leslie Adler and David Gregorio
https://www.reuters.com/article/firstre ... SL1N36Y1KW
"U.S. Treasury: 'Decisive actions' taken in response to bank failures"
By David Lawder
MAY 1, 2023
WASHINGTON (Reuters) - The U.S. Treasury Department said on Monday that authorities took “decisive actions” in response to the failures of First Republic Bank, Silicon Valley Bank and Signature Bank to strengthen public confidence in the banking system and would continue to do so.
In a statement to the Treasury Borrowing Advisory Committee, Treasury acting assistant secretary for economic policy Eric Van Nostrand said there were positive indications that present credit concerns “are not systemic, persistent, or worsening,” but financial instability and financial sector contagion were important risks to monitor.
Treasury has said little so far about the Federal Deposit Insurance Corp’s auction of First Republic’s assets to JPMorgan Chase & Co to resolve the largest U.S. bank failure since the 2008 financial crisis.
“Today, the banking system remains sound and well capitalized, and we have even seen important signs of strength and stabilization across regional banks,” Van Nostrand said in the statement as the Treasury issued new borrowing estimates.
“The U.S. government is committed to taking action to ensure the system is safe, depositors can feel secure, and institutions can provide credit to families and businesses,” he added.
Reporting by David Lawder; Editing by Leslie Adler and David Gregorio
https://www.reuters.com/article/firstre ... SL1N36Y1KW
Re: LEST WE FORGET THE LOOTERS
REUTERS
"First Republic collapse sparks regional bank shares sell-off"
By Manya Saini
May 1, 2023
May 1 (Reuters) - Shares of several regional lenders fell on Monday after the collapse of First Republic Bank, the third major casualty of the biggest crisis to hit the U.S. banking sector since 2008.
The banking turmoil erupted from the closure of Silicon Valley Bank and Signature Bank in March, causing depositors to flee regional lenders and fueling fears that the crisis could engulf other midsized banks.
The KBW Regional Banking Index shed 2.7% on Monday, hitting a session low, while shares of Citizens Financial Group, PNC Financial Services Group, Truist Financial Corp and U.S. Bancorp fell between 3% and 7%.
Valley National Bankcorp, which owns Valley National Bank, lost more than 20%.
A deal was announced earlier on Monday that allows for an orderly failure of First Republic.
Under the terms, JPMorgan Chase & Co will pay $10.6 billion to the U.S. Federal Deposit Insurance Corp (FDIC), which took FRC into receivership, for most of the failed bank's assets.
Shares of JPMorgan Chase rose 2.14%, making the largest U.S. bank the top gainer on the Dow Jones.
In the options market, traders were still being cautious on most regional banks, with the 30-day implied volatility on the SPDR S&P Regional Banking ETF - a measure of expected near-term price swings - dropping about 2 points on Monday from the previous week.
"This deal does not change the rates, recession, and regulatory headwinds that regional banks are facing," said UBS analyst Erika Najarian, but added it is an elegant solution that should lay to rest outstanding investor concerns over liquidity.
Mid-cap banks, which have client deposits parked in interest rate-sensitive investment portfolios such as mortgage bonds, are also facing a massive challenge due to aggressive monetary policy tightening by the U.S. Federal Reserve.
Their portfolios are now worth far less than what they valued them at in their books.
While investors digested the rescue engineered over the weekend by regulators for First Republic's assets with a pinch of salt, Wall Street analysts were largely sanguine about the deal.
"This marks (the) second largest failure on record."
"Still, unlike Silicon Valley Bank and Signature Bank, the FDIC had a buy waiting in the wings," said analysts at Barclays.
Reporting by Manya Saini in Bengaluru; Editing by Shinjini Ganguli
https://www.reuters.com/business/financ ... 023-05-01/
"First Republic collapse sparks regional bank shares sell-off"
By Manya Saini
May 1, 2023
May 1 (Reuters) - Shares of several regional lenders fell on Monday after the collapse of First Republic Bank, the third major casualty of the biggest crisis to hit the U.S. banking sector since 2008.
The banking turmoil erupted from the closure of Silicon Valley Bank and Signature Bank in March, causing depositors to flee regional lenders and fueling fears that the crisis could engulf other midsized banks.
The KBW Regional Banking Index shed 2.7% on Monday, hitting a session low, while shares of Citizens Financial Group, PNC Financial Services Group, Truist Financial Corp and U.S. Bancorp fell between 3% and 7%.
Valley National Bankcorp, which owns Valley National Bank, lost more than 20%.
A deal was announced earlier on Monday that allows for an orderly failure of First Republic.
Under the terms, JPMorgan Chase & Co will pay $10.6 billion to the U.S. Federal Deposit Insurance Corp (FDIC), which took FRC into receivership, for most of the failed bank's assets.
Shares of JPMorgan Chase rose 2.14%, making the largest U.S. bank the top gainer on the Dow Jones.
In the options market, traders were still being cautious on most regional banks, with the 30-day implied volatility on the SPDR S&P Regional Banking ETF - a measure of expected near-term price swings - dropping about 2 points on Monday from the previous week.
"This deal does not change the rates, recession, and regulatory headwinds that regional banks are facing," said UBS analyst Erika Najarian, but added it is an elegant solution that should lay to rest outstanding investor concerns over liquidity.
Mid-cap banks, which have client deposits parked in interest rate-sensitive investment portfolios such as mortgage bonds, are also facing a massive challenge due to aggressive monetary policy tightening by the U.S. Federal Reserve.
Their portfolios are now worth far less than what they valued them at in their books.
While investors digested the rescue engineered over the weekend by regulators for First Republic's assets with a pinch of salt, Wall Street analysts were largely sanguine about the deal.
"This marks (the) second largest failure on record."
"Still, unlike Silicon Valley Bank and Signature Bank, the FDIC had a buy waiting in the wings," said analysts at Barclays.
Reporting by Manya Saini in Bengaluru; Editing by Shinjini Ganguli
https://www.reuters.com/business/financ ... 023-05-01/
Re: LEST WE FORGET THE LOOTERS
REUTERS
"PacWest, Western Alliance shares tumble as US regional bank fears persist"
By Niket Nishant and Chibuike Oguh
May 2, 2023
May 2 (Reuters) - Shares of U.S. regional banks PacWest Bancorp and Western Alliance Bank plunged on Tuesday as the demise of First Republic Bank triggered investor concerns about the financial health of other mid-sized lenders.
JPMorgan Chase agreed on Monday to acquire a majority of First Republic's assets in a $10.6 billion deal after regulators seized the lender, which became the largest U.S. bank failure since the 2008 financial crisis.
Investors fear the latest turmoil, which began with the failures of Silicon Valley Bank and Signature Bank in March, could spread to other regional banks.
The KBW Regional Banking Index fell 5.52%, hitting its lowest since December 2020.
"If a 'confidence crisis' can happen to First Republic, it can happen to any bank in this country," said Jake Dollarhide, CEO of Longbow Asset Management.
"This is potentially a big deal, which hopefully won't materialize to anything significant," he added.
Los Angeles-based PacWest tumbled by more than 27%.
It is ranked 53rd among U.S. lenders with $41.2 billion in assets as of the end of last year, according to Federal Reserve data.
Phoenix, Arizona-based lender Western Alliance, the No. 40 U.S. bank with $68 billion in assets, sank 15% while Cleveland, Ohio-based KeyCorp, the 20th largest bank with $188 billion in assets, fell 9%.
Comerica, a Dallas, Texas-based bank ranked 37th among U.S. lenders with $86 billion in assets, shed 12%.
Columbus, Georgia-based Synovus Financial Corp, with $60 billion in assets and ranked the 42nd U.S. biggest bank, lost nearly 7%.
Valley National Bankcorp, which owns Valley National Bank based in Passaic, New Jersey and is the 43rd largest lender with $57 billion in assets, closed 3% lower after shedding more than 20% on Monday.
"Historically, once you see a resolution of one institution, the market tends to go after who they view as the next weakest link," said Goldman Sachs regional banks analyst Ryan Nash.
The exposure of regional banks to the commercial real estate sector, particularly office buildings that currently have high vacancy rates, has further heightened investor concerns that loan losses could pile up and exacerbate the current crisis amid rising interest rates.
Regional banks with up to $250 billion in assets held about $1.1 trillion of commercial real estate loans with maturities through 2027 as of the end of last year, according to real estate data analytics firm Trepp Inc.
"There could be some haircuts on office loans and that's a market where regional banks have a lot of exposure," Nash said.
JPMorgan Chase's deal for First Republic's assets has ended risks of a contagion, some analysts said.
But others noted the deal makes the biggest U.S. bank even bigger, raising the risk of a heightened "too-big-to-fail" problem that regulators have been trying to solve for years.
"While we think this deal underscores all of JPM's key strengths, we can't help but try to read into what it means if our biggest bank is the government's first line of defense," analysts at Evercore ISI wrote in a note.
The U.S. Federal Reserve is expected to comment on the regional bank crisis at the end of its Federal Open Markets Committee meeting on Wednesday, with markets expecting a 25 basis point hike.
The selloff was driven by the threat of higher interest rates making the situation worse, said Phil Blancato, CEO of Ladenburg Thalmann Asset Management.
Reporting by Niket Nishant and Jaiveer Singh Shekhawat in Bengaluru; Editing by Subhranshu Sahu
https://www.reuters.com/business/financ ... 023-05-02/
"PacWest, Western Alliance shares tumble as US regional bank fears persist"
By Niket Nishant and Chibuike Oguh
May 2, 2023
May 2 (Reuters) - Shares of U.S. regional banks PacWest Bancorp and Western Alliance Bank plunged on Tuesday as the demise of First Republic Bank triggered investor concerns about the financial health of other mid-sized lenders.
JPMorgan Chase agreed on Monday to acquire a majority of First Republic's assets in a $10.6 billion deal after regulators seized the lender, which became the largest U.S. bank failure since the 2008 financial crisis.
Investors fear the latest turmoil, which began with the failures of Silicon Valley Bank and Signature Bank in March, could spread to other regional banks.
The KBW Regional Banking Index fell 5.52%, hitting its lowest since December 2020.
"If a 'confidence crisis' can happen to First Republic, it can happen to any bank in this country," said Jake Dollarhide, CEO of Longbow Asset Management.
"This is potentially a big deal, which hopefully won't materialize to anything significant," he added.
Los Angeles-based PacWest tumbled by more than 27%.
It is ranked 53rd among U.S. lenders with $41.2 billion in assets as of the end of last year, according to Federal Reserve data.
Phoenix, Arizona-based lender Western Alliance, the No. 40 U.S. bank with $68 billion in assets, sank 15% while Cleveland, Ohio-based KeyCorp, the 20th largest bank with $188 billion in assets, fell 9%.
Comerica, a Dallas, Texas-based bank ranked 37th among U.S. lenders with $86 billion in assets, shed 12%.
Columbus, Georgia-based Synovus Financial Corp, with $60 billion in assets and ranked the 42nd U.S. biggest bank, lost nearly 7%.
Valley National Bankcorp, which owns Valley National Bank based in Passaic, New Jersey and is the 43rd largest lender with $57 billion in assets, closed 3% lower after shedding more than 20% on Monday.
"Historically, once you see a resolution of one institution, the market tends to go after who they view as the next weakest link," said Goldman Sachs regional banks analyst Ryan Nash.
The exposure of regional banks to the commercial real estate sector, particularly office buildings that currently have high vacancy rates, has further heightened investor concerns that loan losses could pile up and exacerbate the current crisis amid rising interest rates.
Regional banks with up to $250 billion in assets held about $1.1 trillion of commercial real estate loans with maturities through 2027 as of the end of last year, according to real estate data analytics firm Trepp Inc.
"There could be some haircuts on office loans and that's a market where regional banks have a lot of exposure," Nash said.
JPMorgan Chase's deal for First Republic's assets has ended risks of a contagion, some analysts said.
But others noted the deal makes the biggest U.S. bank even bigger, raising the risk of a heightened "too-big-to-fail" problem that regulators have been trying to solve for years.
"While we think this deal underscores all of JPM's key strengths, we can't help but try to read into what it means if our biggest bank is the government's first line of defense," analysts at Evercore ISI wrote in a note.
The U.S. Federal Reserve is expected to comment on the regional bank crisis at the end of its Federal Open Markets Committee meeting on Wednesday, with markets expecting a 25 basis point hike.
The selloff was driven by the threat of higher interest rates making the situation worse, said Phil Blancato, CEO of Ladenburg Thalmann Asset Management.
Reporting by Niket Nishant and Jaiveer Singh Shekhawat in Bengaluru; Editing by Subhranshu Sahu
https://www.reuters.com/business/financ ... 023-05-02/
Re: LEST WE FORGET THE LOOTERS
CNBC
"PacWest falls 40% after hours on report bank is weighing sale"
Sarah Min @_SARAHMIN
PUBLISHED WED, MAY 3 2023
PacWest Bancorp shares tumbled 56% in extended trading on Wednesday following a report that the bank is weighing a sale.
The regional bank has been assessing options, including a breakup or a capital raise, according to a Bloomberg report citing sources familiar.
The shares of many West Coast regional banks have been hit particularly hard since the collapse of Silicon Valley Bank in March, in part because of concerns that their customer bases are similar.
PacWest is based in Los Angeles.
The stock is down 72% this year.
PacWest reported that total deposits declined more than $5 billion in the first quarter to $28.2 billion as of March 31.
However, the company said that it saw a net gain of $1.1 billion in deposits from March 20 until quarter end.
PacWest also said that deposits grew by another $700 million from March 31 through April 24.
Other regional banks declined in extended trading following the report.
The SPDR S&P Regional Banking ETF shed 4.4%, while shares of Western Alliance Bancorp dropped 24%.
A PacWest spokesperson did not immediately respond to a request for comment.
This is breaking news. Please check back for updates.
https://www.cnbc.com/2023/05/03/pacwest ... -sale.html
"PacWest falls 40% after hours on report bank is weighing sale"
Sarah Min @_SARAHMIN
PUBLISHED WED, MAY 3 2023
PacWest Bancorp shares tumbled 56% in extended trading on Wednesday following a report that the bank is weighing a sale.
The regional bank has been assessing options, including a breakup or a capital raise, according to a Bloomberg report citing sources familiar.
The shares of many West Coast regional banks have been hit particularly hard since the collapse of Silicon Valley Bank in March, in part because of concerns that their customer bases are similar.
PacWest is based in Los Angeles.
The stock is down 72% this year.
PacWest reported that total deposits declined more than $5 billion in the first quarter to $28.2 billion as of March 31.
However, the company said that it saw a net gain of $1.1 billion in deposits from March 20 until quarter end.
PacWest also said that deposits grew by another $700 million from March 31 through April 24.
Other regional banks declined in extended trading following the report.
The SPDR S&P Regional Banking ETF shed 4.4%, while shares of Western Alliance Bancorp dropped 24%.
A PacWest spokesperson did not immediately respond to a request for comment.
This is breaking news. Please check back for updates.
https://www.cnbc.com/2023/05/03/pacwest ... -sale.html