Financial News

WCC Hosts Community Job Fair on March 30
March 17, 2023
AP Sports
March 17, 2023
Financial News

Biden calls for tougher penalties for execs of failed banks

WASHINGTON (AP) — President Joe Biden is calling on Congress to allow regulators to impose tougher penalties on the executives of failed banks, including clawing back compensation and making it easier to bar them from working in the industry. Biden wants the Federal Deposit Insurance Corporation to be able to force the return of compensation paid to executives at a broader range of banks should they fail, and to lower the threshold for the regulator to impose fines and bar executives from working at another bank. He called on Congress to grant the FDIC those powers after the failures of Silicon Valley Bank and Signature Bank sent shockwaves through the global banking industry.

Will Americans end up footing the bill for bank failures?

WASHINGTON (AP) — The government’s response to the failure of two large banks has already involved hundreds of billions of dollars. So will ordinary Americans end up paying for it, one way or another? And what will the price tag be? It could be months before the answers are fully known. The Biden administration said it will guarantee uninsured deposits at both banks. The Federal Reserve announced a new lending program for all banks that need to borrow money to pay for withdrawals. The goal is to prevent a broadening panic in which customers rush to pull out so much money that even healthy banks buckle.

Parent company of Silicon Valley Bank files for bankruptcy

The parent company of Silicon Valley Bank has filed for Chapter 11 bankruptcy protection. The move comes a week after the tech-focused bank failed in a sudden collapse that set off fears of wider problems in the global banking system. The filing on Friday from SVB Financial Group was widely expected. Much of the company is now under the control of banking regulators. The bank was seized last week by the federal government. In other developments, the bank and two of its executives were targeted in a class action lawsuit that claims the company did not disclose the risks that future interest rate increases would have on its business.

Near ‘cliff’s edge,’ Credit Suisse not seen as systemic risk

GENEVA (AP) — Longtime troubles at Credit Suisse have come to a head this week with a record stock plunge that spread fears of a banking crisis jumping from the U.S. to Europe. But the problems have been building for years at Switzerland’s second-largest bank, ranging from bad bets on hedge funds to a spying scandal involving rival bank UBS. Experts say the upheaval is largely a byproduct of Credit Suisse’s troubles in recent years — making it look relatively vulnerable — and investor worries about the health of Western banks in general following the collapse of Silicon Valley Bank in the United States.

Experts, banks look for ideas to stop next bank failure

WASHINGTON (AP) — The warning signs were all there. Silicon Valley Bank was expanding at a breakneck pace and pursuing wildly risky investments in the bond market. The vast majority of its deposits were uninsured by the federal government, leaving its customers exposed to a crisis. None of this was a secret. Yet bank supervisors at the Federal Reserve Bank of San Francisco and the state of California did nothing as the bank rolled over the cliff. The search for causes and culprits – and solutions — is refocusing attention on a 2018 federal law that rolled back tough bank regulations put in place after the 2008-2009 financial crisis and, perhaps even more, on the way regulators wrote the rules that put that law in place.

Fed lent $300B in emergency funds to banks in the past week

WASHINGTON (AP) — The Federal Reserves says cash-short banks have borrowed about $300 billion in emergency funding from the central bank in the past week. Nearly half the money — $143 billion — went to holding companies for the two major banks that failed over the past week, Silicon Valley Bank and Signature Bank, triggering widespread alarm in financial markets. An additional $148 billion in lending was provided through a longstanding program called the “discount window,” and amounted to a record level for that program.

Stocks fall as worries about banks, possible recession flare

NEW YORK (AP) — Wall Street’s week of turmoil is closing with sharp drops for stocks. The S&P 500 was 1.3% lower Friday. The Dow Jones Industrial Average and Nasdaq composite were also lower. This week has been a whipsaw for global markets as concerns worsen about banks following the second- and third-largest U.S. bank failures in history. The fear is that the trouble for banks caused by fast-rising interest rates could drag the rest of the economy into a recession. Treasury yields sank again Friday in part on such fears, along with easing inflation expectations and falling confidence among U.S. households.

North Carolina student in good condition after hit by Tesla

RALEIGH, N.C. (AP) — A North Carolina teenager is in good condition after sustaining life-threatening injuries when he was struck by a Tesla. Tillman Mitchell had just exited a school bus and was walking across the street to his house when he was hit by a 2022 Tesla Model Y, according to the State Highway Patrol. The 17-year-old student at Haliwa-Saponi Tribal School was flown to WakeMed with life-threatening injuries Wednesday and was listed in good condition Friday morning. Authorities say the driver was Roanoke Rapids dentist Dr. Howard Gene Yee. Investigators are looking into whether the Tesla was in autopilot mode at the time of the crash.

Big banks create $30B rescue package for First Republic

NEW YORK (AP) — Eleven of the biggest banks in the country have announced a $30 billion rescue package for First Republic Bank. It’s an effort to stop the California-based bank from becoming the third to fail in less than a week. Shares of First Republic had fallen sharply this week, dropping 60% on Monday alone. For the package, JPMorgan Chase, Bank of America, Citigroup and Wells Fargo would each put $5 billion in uninsured deposits into First Republic. Meanwhile Morgan Stanley and Goldman Sachs would deposit $2.5 billion each. The remaining $5 billion would come from five other banks.

After last year’s stunning failure, bonds show up for safety

NEW YORK (AP) — Suddenly, bonds are again living up to their reputation as the safe part of an investor’s portfolio. As stocks sank worldwide over the last week on worries about the banking system, bonds shot up in price. That offered some protection to any investor with a mixed set of stocks and bonds in their portfolio, as most advisers suggest. It’s a sharp turnaround from last year. That’s when bonds plunged in tandem with stocks on fears about the highest inflation in generations and what the Federal Reserve was doing about it.