• JPMorgan Chase & Co. Chief Executive Jamie Dimon is leading discussions with the CEOs of other large U.S. banks to formulate a new plan to stabilize First Republic Bank, according to people familiar with the matter, as the company’s stock price tumbles and customers have withdrawn roughly $70 billion. The executives are looking at arrangements for another infusion of funds, which could come from converting the big banks’ recent $30 billion deposit into capital, but a sale of the bank is also on the table, people familiar with the matter said, and JPMorgan has been hired to serve as an adviser. (The Wall Street Journal)
• Treasury Department officials are looking into whether federal regulators have the authority to allow the Federal Deposit Insurance Corp. to temporarily insure bank deposits that exceed the current $250,000 cap, according to people with knowledge of the talks. (Bloomberg) Treasury Secretary Janet Yellen said in prepared remarks for an American Bankers Association event that the U.S. government could back all deposits as it did for Silicon Valley Bank, noting that “similar actions could be warranted” if smaller banks begin to see deposit runs, adding that the U.S. banking system is stabilizing and is currently sound. (Financial Times)
• After failing to find a buyer last week for Silicon Valley Bank, the FDIC will break up SVB into two pieces — the private banking business and the traditional deposit business — and will accept bids on the units until March 22 and March 24, respectively. The FDIC will allow traditional banks and nonbanks to bid, and First Citizens BancShares Inc., which is said to have submitted a bid for all of SVB, is expected to bid again. (Reuters)
• Banks tapped the Federal Home Loan Bank System for more than $304 billion last week, according to a person familiar with the non-public data, nearly double the $165 billion banks procured from the Federal Reserve and a likely record of $1.1 trillion in total FHLB lending. As banks sought to shore up their liquidity, FHLBs issued $112 billion in debt in one single day last week, one of the biggest-ever days for the system, according to the source. (Bloomberg)

Worth watching: 

• The Federal Open Market Committee begins its policy meeting. The Fed will be weighing a quarter-point rate increase, but officials are likely to be torn as continued inflation competes with the market’s reaction to the unfolding banking drama. The central bank also has its own bookkeeping to attend to, as its QT strategy may come under consideration.
• Sheila Bair, former chair of the FDIC, will join Washington Post Live to discuss the path forward for the global banking system.

Many Americans are still earning rock-bottom rates on their savings

Axios

Biden issues first veto, knocks Marjorie Taylor Greene

Eleanor Mueller, Politico

President Joe Biden on Monday vetoed his first bill, blocking the repeal of a Labor Department rule that permitted retirement investing tied to environmental and social goals. The veto was expected, after the Biden administration fought Republican-led efforts to pass the rollback three weeks ago.

Hardline US Republicans oppose bank deposit guarantees beyond $250,000 limit

David Lawder, Reuters

Hardline Republicans in the House of Representatives on Monday vowed to oppose any universal federal guarantee on bank deposits above the current $250,000 limit, throwing a major roadblock to a key tool regulators could deploy if bank runs re-emerge as financial confidence wobbles.

Republicans request Fed and FDIC oversight records for failed Silicon Valley Bank and Signature Bank

Christina Wilkie, CNBC

The top Republicans on committees that oversee the U.S. financial system sent letters Monday to Federal Reserve Chair Jay Powell and FDIC Chair Martin Gruenberg formally requesting documents and personnel records related to the oversight of two banks that failed over the last 11 days.

‘The Fed has mishandled this about 7 different ways’: SVB rescue sparks backlash

Victoria Guida, Politico

When Congress rewrote the rules for Wall Street following the 2008 financial crisis, it put the Federal Reserve at the center of oversight for the nation’s wounded banks.

Senior care is crushingly expensive. Boomers aren’t ready.

Christopher Rowland, The New York Times

Beth Roper had already sold her husband Doug’s boat and his pickup truck. Her daughter sends $500 a month or more. But it was nowhere near enough to pay the $5,950-a-month bill at Doug’s assisted-living facility. So last year, Roper, 65, abandoned her own plans to retire.

Biden Warns That Climate Change Could Upend Federal Spending Programs

Jim Tankersley and Christopher Flavelle, The New York Times

A chapter in the new Economic Report of the President focuses on the growing risks to people and businesses from rising temperatures, and the government’s role in adapting to them.

The canary is alive and chirping a year into Fed’s rate hiking cycle

Howard Schneider, Reuters

Utah homebuilder Ivory Homes still has a pipeline of several hundred houses under construction, but CEO Clark Ivory isn’t pulling permits for any more at this point, and in a year of retrenchment for the single-family home industry, he has laid off just under 10% of his workers.

Signature Bank Threw a Fundraiser for the Congressman Now Probing How It Failed

Max Abelson et al., Bloomberg

Ten days before Signature Bank collapsed, the House Republican overseeing an inquiry into the bank’s failure was inside its boardroom on New York’s Fifth Avenue.

Credit Suisse Bankers Flood Headhunters With Calls After Rescue

Bloomberg

Recruiters across the world are getting an unprecedented flood of calls from Credit Suisse Group AG bankers seeking new jobs as the embattled Swiss lender is set to be taken over by UBS Group AG.

SVB Collapse Shows Smaller Banks Can Pose Risk in Numbers

Andrew Ackerman, The Wall Street Journal

Former regulators say Washington has been too focused on ‘too big to fail’ banks.

JPMorgan Chase can be sued by Virgin Islands over Jeffrey Epstein sex-trafficking claims

Dan Mangan, CNBC

A New York federal judge ruled that the U.S. Virgin Islands and women who accuse the late investor Jeffrey Epstein of sexual abuse can proceed with lawsuits claiming that JPMorgan Chase knowingly benefited from participating in Epstein’s sex-trafficking scheme.

Credit Suisse Bond-Wipeout Threatens $250 Billion Market

Matt Wirz et al., The Wall Street Journal

Credit Suisse Group AG’s emergency merger with UBS Group AG will wipe out the bank’s riskiest bonds, rattling investors in the quarter-trillion-dollar market for similar bank debt.

PIMCO lost $340 mln with Credit Suisse AT1 bonds write-off – source

Davide Barbuscia, Reuters

Bond giant PIMCO lost about $340 million on a category of Credit Suisse bonds that were wiped out by the takeover by UBS, with the American investment manager’s overall exposure to the Swiss lender running into billions, a source familiar with the situation said.

Goldman Sachs sees risk of ‘permanent destruction’ in demand for AT1 bonds

Davide Barbuscia and Saeed Azhar, Reuters

The decision by Swiss authorities to wipe out Credit Suisse’s Additional Tier 1 (AT1) bonds could reduce demand for this type of bonds in the long term, a Goldman Sachs strategist said, but risk of contagion across credit markets was limited due to the relative niche nature of the asset class.

Vanguard to exit China funds JV with Ant, close Shanghai office – sources

Selena Li, Reuters

U.S. fund giant Vanguard Group is shutting its main Shanghai office and exiting from a joint venture with Ant Group, five sources with knowledge of the matter said, moves that will end its six-year presence in the world’s second largest economy.

After an 8.7% Social Security cost-of-living adjustment for 2023, next year’s increase may not be as large

Lorie Konish, CNBC

Older generations are spending more, thanks to a record Social Security cost-of-living adjustment for 2023, according to Bank of America Institute.

Bank of America halts trading with Credit Suisse electronic stocks desk -email

Nell Mackenzie and Lananh Nguyen, Reuters

Bank of America (BAC.N) said it would no longer send trades to Credit Suisse’s “ATS Crossfinder”. That trading platform anonymously matches buy and sell orders for the same kinds of securities, according to the Credit Suisse (CSGN.S) website. The U.S. Securities and Exchange Commission website calls the ATS Crossfinder a “dark pool.”

Why $17 billion in Credit Suisse bonds became worthless

Julian Mark, The Washington Post

Credit Suisse’s ‘CoCo’ bonds did exactly what they were designed to do: Transfer all the risk of debt from the bank to bondholders.

UBS to assume $6 billion in U.S. retirement assets from Credit Suisse merger

Palash Ghosh, Pensions & Investments

UBS Group’s acquisition of Credit Suisse Group will add about $6 billion to UBS’ U.S. retirement plan assets, according to data compiled by Pensions & Investments.

Anxiety Strikes $8 Trillion Mortgage-Debt Market After SVB Collapse

Matt Wirz, The Wall Street Journal

Strains in the banking sector are roiling a roughly $8 trillion bond market considered almost as safe as U.S. government bonds.

Mortgage giant Fannie Mae tackles climate risk, but changes to underwriting may take several years

Diana Olick, CNBC

Global warming has already caused irreversible damage to the earth’s ecosystems and communities, according to a critical report just issued from the United Nations Intergovernmental Panel on Climate Change. The damage is extending to the U.S. housing market, which just saw unprecedented snow and flooding in California, as well as unusual winter tornados in the south. All that came after one of the worst hurricanes on record in Florida last year.

Newly built homes too pricey for most Americans: report

Spencer Lee, National Mortgage News

While the current housing market is considered more favorable to buyers than sellers by some mortgage industry leaders, plenty of obstacles remain for aspiring homeowners, especially those looking to buy new properties.

How far the Fed’s facility is likely to go in stopping bank MBS woes

Bonnie Sinnock, National Mortgage News

The effectiveness of the borrowing facility now available to address the mortgage-backed securities risk that contributed to Silicon Valley Bank’s failure remains to be seen, as it has been tapped for at least $12 billion but institutions are leaning more heavily on other funding sources. But experts are hopeful about its usage.

Coinbase offered $3B backstop to Circle in bid to stabilize USDC

Jeff John Roberts, Fortune

Details keep emerging about the chaotic weekend that followed the collapse of Silicon Valley Bank—including a plan by Coinbase to ride to the rescue of Circle after the USDC stablecoin broke its peg with the dollar following news that $3.3 billion of Circle’s deposits were stranded at the failed bank.

U.S. Supreme Court to Hear First Crypto Case Tuesday

Cheyenne Ligon, CoinDesk

Coinbase is asking the high court to pause a pair of class-action lawsuits as the exchange attempts to force the plaintiffs into arbitration.

FTX sues liquidators of its Bahamian affiliate over crypto exchange ownership

Dietrich Knauth, Reuters

Bankrupt crypto exchange FTX has sued the liquidators overseeing the wind-down of its Bahamian affiliate FTX Digital Markets, accusing them of wrongly claiming ownership of the exchange’s assets.

Microsoft’s browser update includes a crypto wallet prototype. A researcher is ‘pretty confident’ of a wider release

Ben Weiss, Fortune

While Microsoft has recently grabbed headlines for investments in AI chatbots, the tech giant has been quietly exploring another technological frontier, according to a software researcher in central Europe.

Crypto Wants Its Shine Back

David Yaffe-Bellany and Erin Griffith, The New York Times

After a miserable year, cryptocurrency companies are looking for ways to rebrand products that many consumers no longer trust.

Paytechs emerged mostly unscathed from the SVB fallout

Adriana Nunez, Insider Intelligence

Major payments firms and fintechs noted that their businesses were mostly uninterrupted despite some close ties with now-collapsed Silicon Valley Bank, per Payments Dive.