Banking Crisis 2023

FDIC Chairman Martin Gruenberg and Federal Reserve Vice Chair for Supervision Michael Barr are scheduled to appear before the House Financial Services Committee later this month to answer questions about the collapse of Silicon Valley Bank and Signature Bank. The hearing will be bipartisan, the committee's Republican chairman and its top Democrat said.

The high-stakes acquisitions of 2008 and subsequent legal liabilities have sapped enthusiasm from many prospective buyers for Silicon Valley and Signature Banks. The Federal Deposit Insurance Corp. may end up having to sell assets piece by piece.

Former Treasury Secretary Lawrence Summers said the Federal Reserve shouldn't be spooked into easing its campaign to contain inflation out of excessive concern about a credit crunch in the wake of the recent banking turmoil.

President Biden asked that Congress pass measures that would expand the Federal Deposit Insurance Corp.'s ability to claw back compensation from the executives of failed banks, among other measures.

The failures of Signature Bank and Silicon Valley Bank have already rocked mortgage rates but aren't expected to rattle lines of credit provided by depositories, home lenders say.

Is the banking sector in crisis? What happened, and what can bankers learn from this turmoil? Two of American Banker's reporters discuss the fallout and what comes next with the magazine's editor-in-chief.

Shadows loomed over Credit Suisse and First Republic early Thursday, but the sector outlook brightened after billions of deposits were pledged to the U.S. bank.

The liquidity facility launched by the central bank over the weekend saw limited uptake compared to other emergency funding options.

Treasury Secretary Janet Yellen took the first step of walking back an implicit guarantee by the U.S. government that other banks would see their depositors fully backstopped should the bank fail.

The system of 11 regional banks issued a combined $137 billion of bonds and discount notes on Tuesday and Wednesday, after selling $112 billion on Monday, the largest single day of issuance in its 90-year history.

Both 30- and 15-year averages dropped for the first time in six weeks, as investors flocked to safety of 10-year Treasuries.

Banks including JPMorgan Chase, Citigroup, Bank of America and Morgan Stanley are part of the discussions, according to people familiar with the situation.

The San Francisco bank is said to be exploring strategic options that include a sale, according to people familiar with the matter. The firm is also weighing options for shoring up liquidity, some of the people said.

There were many red flags before the California bank failed last week. Now the questions are: How did federal and state regulators assess the risks, and what actions did they take in response?

Navigating challenges and what's ahead in banking regulation.

Other mortgage players this week have distanced themselves from the banking chaos with statements disclosing that they had no relationships with the failed companies.

The Arkansas congressman, a leading Republican on the House Financial Services Committee, said while he doesn't believe blanket expanding deposit insurance is warranted, different premium structures for covering deposits would be "worthwhile."

After the failure of two banks between $100 billion and $250 billion of assets, many are asking regulators to change their oversight practices for these banks. The Fed has a wide berth to make a wide array of changes.

Maxine Waters, the top Democrat on the House Financial Services Committee, says she's confident some of the issues surrounding the failures of Silicon Valley Bank and Signature Bank will require legislation.

The Bank Term Funding Program, rolled out by the central bank on Sunday night, offers par value for underwater securities that banks pledge to obtain short-term loans. Industry insiders expressed optimism on Monday that it will buy time for institutions that have been hit by rising interest rates.