What is going on with Silicon Valley Bank???

[Suranis]

I heard Ari Melber talking on his show about what a catastrophe this all is. BS. Depositors will be made whole. Investors will not. Hey, guys, that's how capitalism works. This is certainly a problem, but calling it a catastrophe is throwing fuel on the fire.

I'm cool with depositors being made whole. The Executives and Investors can marinate in the Eighth Circle of hell for all I care.

[much ado]

First Republic is reported not to be completely out of the woods yet...

NY Times gift... First Republic and Other Banks Seek to Attract Buyers

Just one day after the biggest U.S. banks gave it a $30 billion infusion, First Republic Bank was in talks to sell a piece of itself to other banks or private equity firms, three people with knowledge of the process said, an indication that the imperiled lender is far from conquering its troubles.

The deals under discussion, which would involve selling new shares, represent a fresh level of urgency for a bank that has been under mounting pressure since last week’s collapse of Silicon Valley Bank. First Republic had been working with advisers all week, exploring possible deals, and a transaction could still result in a full sale of the company. All the while, customers have been pulling deposits and the bank’s market value shrank to $4 billion on Friday from around $22 billion at the beginning of March.

[pjhimself]

[Suranis]

chase.jpg (51.44 KiB) Viewed 952 times

[Phoenix520]

The Disruptors hate the laws that protect us from them.

[RTH10260]

Suze Orman Reacts to Ron DeSantis's Claims Diversity Caused SVB Failure
The financial expert calls the claims 'ridiculous.'

TONY OWUSU
MAR 17, 2023 1:00 PM EDT

Both Republicans and Democrats have pounced on the collapse of Silicon Valley Bank to push their own political agendas.

While Democrats have focused on deregulation during the Trump administration -- specifically the dismantling of Dodd-Frank -- Republicans have seized on a different, more esoteric reason for Silicon Valley Bank's demise.

Wokeism.

"This bank, they're so concerned with DEI and politics and all kinds of stuff, I think that really diverted them from focusing on their core mission," Florida Governor Ron DeSantis (R) said this week.

But the Left side of the political spectrum has been pushing back against this notion all week, and famed financial advisor Suze Orman went on CNN to respond to a Wall Street Journal opinion piece that said SVB's "commitment to diversity" -- the company's 12-person board has one black member, one LGBT member, and two veterans -- is what caused it to fail.




https://www.thestreet.com/politics/suze ... vb-failure

[Gregg]

[RTH10260]

Yellen says Trump administration ‘decimated’ financial oversight

BY TOBIAS BURNS -
03/30/23 1:16 PM ET

Treasury Secretary Janet Yellen said Thursday that the capacity of the U.S. government to respond to and prop up failing financial markets was “decimated” by cutbacks enacted during the Trump administration.

Her remarks come in the wake of state interventions to save depositors at failed banks Signature and Silicon Valley Bank (SVB), which catered to a niche clientele of wealthy business people in the cryptocurrency and venture capital sectors.

Depositors were reimbursed for the banks’ losses well above the Federal Deposit Insurance Corporation’s (FDIC) $250,000 standard limit into the billions of dollars.

“When the President and I took office in January 2021, we inherited a financial stability apparatus at Treasury that had been decimated,” Yellen said at a meeting of the National Association for Business Economics.

“For example, I walked in to find an FSOC [Financial Stability Oversight Council] team that was less than one third of the size it was five years prior. In 2016, FSOC’s policy, analysis, and operations teams were fully staffed. By 2021, the analysis team had been eliminated,” she said.




https://thehill.com/homenews/3926027-ye ... oversight/

[much ado]

Serious banking problems continue, this time with First Republic Bank, San Francisco...

San Francisco Chronicle: Regulators rushing to sell S.F.’s First Republic Bank amid fears of collapse, report says

Federal regulators were rushing Saturday to sell San Francisco’s First Republic Bank as fears of a collapse increased, according to a published report.

The Federal Deposit Insurance Corp. has been in confidential talks with banks including JPMorgan Chase, PNC Financial Services and Bank of America, the New York Times reported. A deal could be announced as soon as Sunday, when final bids are due, according to Bloomberg.

The development came days after First Republic Bank’s stock plunged when the bank said its customers withdrew $102 billion in the first quarter of the year, more than half of the $176 billion it held in deposits at the end of 2022. It has been scrambling to shore itself up with $92 billion in loans from the government, as well as a $30 billion temporary infusion from a consortium of big banks, including JPMorgan Chase, PNC and Bank of America. A sale to a larger bank would prevent a government takeover.

The crisis at First Republic follows similar situations at New York’s Signature Bank and Santa Clara’s Silicon Valley Bank, which collapsed suddenly in March after panicked depositors took their money out.

The implosion of Silicon Valley Bank sparked fear and uncertainty throughout the financial and tech industries. The Federal Reserve later blamed the collapse on poor management, watered-down regulations and lax oversight by its own staffers. The FDIC announced last month that First Citizens Bank & Trust of North Carolina will acquire Silicon Valley Bank.

NY Times gift: Regulators Prepare to Seize and Sell First Republic

JPMorgan, PNC and Bank of America are said to be interested in acquiring the troubled lender after it is seized by the Federal Deposit Insurance Corporation.

Federal regulators were racing on Saturday to seize and sell the troubled First Republic Bank before financial markets open on Monday, according to several people with knowledge of the matter, in a bid to put an end to a banking crisis that began last month with the collapse of Silicon Valley Bank.

The effort, led by the Federal Deposit Insurance Corporation, comes after First Republic’s shares tumbled 75 percent since Monday, when the bank disclosed that customers had withdrawn more than half of its deposits. It became clear this past week that nobody was willing to ride to First Republic’s rescue before a government seizure because larger banks were worried that buying the company would saddle them with billions of dollars in losses.

The F.D.I.C. has been talking with banks that include JPMorgan Chase, PNC Financial Services and Bank of America about a potential deal, three of the people said. A deal could be announced as soon as Sunday, these people said, cautioning the situation was rapidly evolving and might still change. Any buyer would most likely assume the deposits of First Republic, eliminating the need for a government guarantee of deposits in excess of $250,000 — the limit for deposit insurance.

It’s possible that an agreement won’t be reached, in which case the F.D.I.C. would need to decide if it would seize First Republic anyway and take ownership itself. In that case, federal officials could invoke a systemic risk exception to protect those bigger deposits, something they did after the failures of Silicon Valley Bank and Signature Bank in March.

[tek]

I think JPMC now owns first republic.

ms.tek has a loan with them, so keeping half an ear to this

[much ado]

CNN: JPMorgan Chase to buy most First Republic assets after bank fails

New York/London CNN — JPMorgan Chase is buying most assets of First Republic Bank after the nation’s second-largest bank failure ever, in a deal announced early Monday that protects the deposits of First Republic’s customers.

JPMorgan Chase said it had acquired “the substantial majority of assets” and assumed the deposits, insured and uninsured, of First Republic from the Federal Deposit Insurance Corporation, the independent government agency that insures deposits for bank customers.

“Our government invited us and others to step up, and we did,” said JPMorgan Chase CEO Jamie Dimon. He said the deal is also a good one for his bank’s shareholders, adding to its expected earnings going forward.

Under the deal, the FDIC will cover 80% of any losses incurred on First Republic’s portfolio of single-family residential mortgage loans and commercial loans over the next five to seven years. JPMorgan Chase also will not assume First Republic’s corporate debt, and it will receive $50 billion in financing from the FDIC to complete the deal.

Under terms disclosed by JPMorgan Chase, it will make a $10.6 billion payment to the FDIC, return $25 billion in funds that other banks deposited with First Republic in March in a lifeline negotiated with Treasury at that time, and will eliminate a $5 billion deposit it had made with First Republic. JPMorgan will record a one-time gain of $2.6 billion on its books from the deal, although it expects to spend $2 billion on restructuring through the end of 2024.

Besides being good news for JPMorgan Chase and First Republic’s worried customers, it was also cheered by Treasury Department officlals, who are worried about a loss of confidence in the banking system causing damage to the US economy.

“Treasury is encouraged that this institution was resolved with the least cost to the Deposit Insurance Fund, and in a manner that protected all depositors,” said a Treasury Department spokesperson. “The banking system remains sound and resilient, and Americans should feel confident in the safety of their deposits and the ability of the banking system to fulfill its essential function of providing credit to businesses and families.”

The FDIC took control of the embattled First Republic and then immediately announced the sale. The failure will cost the FDIC about $13 billion. That money will be paid by the nation’s banks, which pay premiums to support the agency. It is less than the $20 billion cost of the failure in March at Silicon Valley Bank, which was a bit smaller than First Republic.

The FDIC conducted an auction among several banks to see which would end up with First Republic’s assets. Those bids were submitted late Sunday afternoon, a source told CNN. Then came hours of waiting for news about which bid was successful.

ETA:

How much money does the FDIC have in assets?

The Reserve Ratio for the Deposit Insurance Fund Rose One Basis Point to 1.27 Percent: The Deposit Insurance Fund (DIF) balance was $128.2 billion on December 31, 2022, up $2.8 billion from the end of the third quarter. Feb 28, 2023

[Dave from down under]

Greed is Good!


https://www.abc.net.au/news/2023-05-05/ ... /102309854

US authorities are now looking into whether big investment firms are targeting, or attacking, otherwise healthy banks to make a profit.

Key points:
Officials are reportedly assessing if market manipulation, such as short-selling, has caused volatility in banking shares
The rise in short-selling has coincided with a huge fall in the share price of several US banks
Meanwhile, the White House says it is closely monitoring the situation

Federal and state officials are assessing whether "market manipulation" caused the recent volatility in banking shares, Reuters is exclusively reporting.

The White House had vowed to monitor "short-selling pressures on healthy banks".

Short-selling is a complex trading strategy but, in short, it is one way investors — including hedge funds — can profit from a fall in the value of a stock.

There has recently been a sharp increase in short-shelling.

It has coincided with extraordinary falls in the share price of several regional US banks — including First Republic, PacWest and Western Alliance – by as much as 50 per cent in one day.

[Phoenix520]

If true, look at Bannon and of course tfg but he’ll have left no prints.

[RTH10260]

Trading halted in shares of two more US lenders as fears of banking crisis mount
Regulators step in after PacWest and Western Alliance shares plunge as investors fear repeat of First Republic, SVB and Signature failures

Dominic Rushe, Julia Kollewe and Lois Beckett in Los Angeles
Thu 4 May 2023 22.23 BST

Trading in the shares of two more regional US lenders was temporarily suspended on Thursday amid a widening crisis for the country’s mid-sized banks.

Regulators stepped in to halt trading in the Los Angeles-based PacWest and Arizona’s Western Alliance following dramatic drops in their share prices.

It came after another mid-sized bank, First Republic, was sold to JP Morgan earlier this week. Depositors had pulled $100bn from First Republic, fearing their money was no longer safe.

PacWest had sought to calm markets on Wednesday and said it was in talks with several potential investors after its shares fell by as much as 60%. But the sell-off continued on Thursday and affected other regional banks.

Shares in PacWest fell 50% on Thursday after Bloomberg News reported that the lender was considering strategic options, including a sale or a fundraising round.

The bank sought to reassure investors by saying it had not experienced unusual deposit flows. “Recently, the company has been approached by several potential partners and investors – discussions are ongoing,” it added.

Western Alliance’s share price plummeted 45% after the Financial Times reported it was exploring strategic options, including a potential sale, which the bank strongly denied. It called the story “absolutely false” and said it had not experienced unusual deposit flows after the sale of First Republic. Its shares ended Thursday down 38%




https://www.theguardian.com/business/20 ... ing-crisis

[RTH10260]

Bill Ackman, chief executive of the New York hedge fund Pershing Square, warned that the entire US regional banking system was at risk. In a tweet before PacWest’s statement, he wrote: “Confidence in a financial institution is built over decades and destroyed in days. As each domino falls, the next weakest bank begins to wobble.

“We are running out of time to fix this problem. How many more unnecessary bank failures do we need to watch before the FDIC [Federal Deposit Insurance corporation], and our government wake up? We need a systemwide deposit guarantee regime now.”

in above article

https://twitter.com/BillAckman/status/1 ... 0282570754

Bill Ackman @BillAckman

The regional banking system is at risk. SVB's depositors' bad weekend woke up uninsured depositors everywhere. The rapid rise in rates impaired assets and drained deposits. Zeroing out shareholders and bondholders massively increased the banks’ cost of capital. CRE losses loom. Meanwhile, higher-yield, more user- friendly alternatives beckon
@Apple
.

The @FDICgov failure to update and expand its insurance regime has hammered more nails in the coffin. FRB would not have failed if the FDIC temporarily guaranteed deposits while a new guarantee regime were created. Instead, we watch the dominoes fall at great systemic and economic cost.

Banking is a confidence game. At this rate, no regional bank can survive bad news or bad data as a stock price plunge inevitably follows, insured and uninsured deposits are withdrawn and 'pursuing strategic alternatives' means an FDIC shutdown over the coming weekend. And there is no incentive to bid until Sunday after the failure.

The GSIBs have an unfair competitive advantage as too big to fail means only their uninsured depositors can sleep soundly. Until the playing field is leveled, the regional banks are at grave risk.

Confidence in a financial institution is built over decades and destroyed in days. As each domino falls, the next weakest bank begins to wobble. Until investors are rewarded for betting on a wobbling bank, there will be no bid, and the best sale is the last price.

We are running out of time to fix this problem. How many more unnecessary bank failures do we need to watch before the FDIC, @USTreasury and our government wake up? We need a systemwide deposit guarantee regime now.
1:30 AM · May 4, 2023

[tek]

Waitaminit...

So you are telling me none of this is any fault of the banks themselves?

Well, that's good to know! /s