Reuters (March 11)
“Nearly three years with no U.S. bank failures just came to an unseemly end.” The FDIC took Silicon Valley Bank into receivership “after a slide in deposits and a hasty capital raising failed to restore confidence. By acting quickly, regulators have stopped one crisis, but may have laid the groundwork for more.”
Tags: Bank, Capital raising, Confidence, Deposits, Failures, FDIC, Hasty, Receivership, Regulators, Silicon Valley Bank, Slide, U.S., Unseemly
American Banker (June 21)
“The Federal Deposit Insurance Corp. plans to hike deposit insurance assessment rates next year — a move that would increase costs for banks as they continue to see high deposit growth more than a year after the last round of pandemic stimulus.” On Tuesday, “the FDIC voted to issue a notice of proposed rulemaking that would raise deposit insurance assessment rates by 2 basis points for all insured depository institutions.”
Tags: Assessment rates, Banks, Costs, Deposit growth, Depository institutions, FDIC, Increase, Insurance, Pandemic, Rulemaking, Stimulus
Chicago Tribune (July 19)
“The Chicago-based futures industry needs to better protect its clients.” Unlike banks (backed by the FDIC) or brokers (backed by the SIPC), the futures industry lacks a backstop to protect customer accounts. Last year MF Global went bankrupt, with customers losing up to $1.6 billion of their own supposedly safely segregated funds. More recently, Peregrine Financial Group went bankrupt. Customer funds are again missing. “There is no substitute for a well-capitalized insurance fund covering customer accounts…. The industry’s version of the FDIC and SIPC needs to be put in place soon — before the next firm goes belly up and takes its customers’ money with it.”
Forbes (March 30)
Derivatives contributed to the last financial crisis and “may still endanger the financial system.” Based on FDIC records, U.S. banks hold derivative instruments with “a nominal value of $250 trillion – or about 150 times the aggregate balance sheet equity of these same banks.”
Tags: Banks, Derivatives, FDIC, Financial Crisis, U.S.
