• In the first merger of systemically important banks since the financial crisis of 2008, UBS Group AG agreed to acquire Credit Suisse Group AG for more than $3 billion, paid in UBS shares, with the Swiss government agreeing to provide $100 million in liquidity to UBS for the purchase and $9 billion to backstop any losses that it may incur from the acquisition. The deal came together after Swiss regulators rejected a last-ditch effort by Credit Suisse shareholder Saudi National Bank to keep the foundering bank afloat with a $5 billion injection, according to people familiar with the offer, which would have protected bondholders, who are now facing losses of $17 billion in now-worthless “additional tier 1” (AT1) bonds, the dissolving of which was required to make the deal financially palatable for UBS shareholders, according to people close to the deal. (The Wall Street Journal)
• The Federal Deposit Insurance Corp. said the Flagstar Bank subsidiary of New York Community Bancorp has agreed to acquire nearly all of Signature Bank’s deposits, its 40 branches and some of its loan portfolios. The FDIC said around $60 billion of loans and $4 billion of deposits would remain in receivership, and it estimated that the deal would cost its Deposit Insurance Fund about $2.5 billion. (Reuters)
• Amid growing concerns about the global availability of the U.S. dollar following the announcement of the UBS/Credit Suisse deal, six global central banks jointly announced a plan to make dollar swap lines more readily available. The Federal Reserve, the European Central Bank, the Bank of England, Bank of Canada, Bank of Japan, and Swiss National Bank said the standing liquidity arrangement would make the swap lines, used broadly in the 2008 global financial crisis and during the COVID-19 pandemic, available daily instead of weekly. (Axios)
• President Joe Biden has asked Congress to pass legislation that would give the FDIC increased authority to impose penalties on the executives of failed banks, including clawing back compensation, collecting civil penalties and banning executives from working in the banking industry again. The FDIC’s punitive authority is currently limited to the nation’s largest banks, and the Biden proposal would expand its powers to include banks the size of Silicon Valley Bank, whose CEO reportedly sold $3 million in shares while the company was enduring a bank run and shortly before it was put into FDIC receivership. (The New York Times)

Economists think Fed will keep raising rates despite bank turmoil

Financial Times

Warren Buffett in Contact With Biden Team on Banking Crisis
Saleha Mohsin et al., Bloomberg

Berkshire Hathaway Inc.’s Warren Buffett has been in touch with senior officials in President Joe Biden’s administration in recent days as the regional banking crisis unfolds. There have been multiple conversations between Biden’s team and Buffett in the past week, according to people familiar with the matter.

House committee calls Fed, FDIC officials to testify in its first hearing on bank failures
Chelsey Cox, CNBC

The House Financial Services Committee has announced that its first hearing on the failures of SVB and Signature Bank will be March 29. Martin J. Gruenberg, FDIC board of directors chairman, and Michael S. Barr, vice chair for supervision for the Federal Reserve board of governors, are scheduled to testify.

Elizabeth Warren Calls for Investigation of SVB and Signature Bank Collapses

Bryan Mena, The Wall Street Journal

Sen. Elizabeth Warren (D., Mass.) called for an independent investigation into the recent failures of two U.S. regional banks, Silicon Valley Bank and Signature Bank. In a letter Sunday to the inspectors general of the Treasury Department, the Federal Deposit Insurance Corp. and the Federal Reserve, Ms. Warren called for the probe to examine the management and oversight of the banks ahead of their collapses this month. She said preliminary results from the investigation should be provided within 30 days.

Sen. Warren calls for lifting deposit insurance cap, blasts Fed

Jeanna Smialek, The New York Times

Sen. Elizabeth Warren (D-Mass.) on Sunday called on Congress to lift the federal insurance levels for bank deposits above $250,000, a week after the Biden administration announced it would protect all depositors at Silicon Valley Bank, regardless of how much money they had in the failing institution.

Republicans take aim at Biden student loan forgiveness

Daniela Altimari, Roll Call

Republican Sens. Bill Cassidy of Louisiana, John Cornyn of Texas and Joni Ernst of Iowa said Friday they will introduce a resolution under the Congressional Review Act to overturn Biden’s proposal, which would eliminate up to $20,000 in student loan debt per borrower.

Latest bank bailouts rile student loan borrowers

Sylvan Lane et al., The Hill

Recent moves by the Biden administration and financial regulators to bail out Silicon Valley Bank (SVB) and Signature Bank are hitting a sore spot with some student loan borrowers, as anticipation builds over a long-awaited decision in the Supreme Court’s loans forgiveness case.

‘Enough — it’s hurting our business’: SoFi’s campaign to stop the student-loan payment pause that helps its own customers

Jillian Berman, MarketWatch

The financial technology company is suing the government and lobbying lawmakers to force its customers to resume making student-debt payments.

U.S. House Speaker McCarthy says he told Biden lack of debt talks jeopardizes economy

David Morgan, Reuters

U.S. House Speaker Kevin McCarthy said on Sunday that he confronted President Joe Biden about a lack of negotiations on the $31.4 trillion U.S. debt ceiling last week and told the president he is putting the economy at risk.

GOP-led ‘debt prioritization’ push to help prevent default draws mixed reviews

Aris Folley, The Hill

A GOP-backed push to lay out a plan for the government to prioritize certain payments if the Treasury runs out of emergency measures to prevent a default is picking up some traction as both parties dig in their heels on the debt ceiling battle.

Smaller Banks’ Critical Role in Economy Means Distress Raises Recession Risks
Gwynn Guilford, The Wall Street Journal

Main Street businesses and American families are likely to find it harder to get a loan because of turmoil in the banking industry, denting economic growth and raising the risk of a recession.

Pricey Child Care Is Keeping Many Parents Out of the Workforce

Harriet Torry, The Wall Street Journal

Roughly 380,000 workers aged 25 to 54 left jobs since pandemic began, study finds.

Midsize US Banks Ask FDIC to Insure Deposits for Two Years
Gillian Tan, Bloomberg

A coalition of midsize US banks asked federal regulators to extend FDIC insurance to all deposits for the next two years, arguing the guarantee is needed to avoid a wider run on the banks.

US Bank Deposits Fell $54 Billion In Week Before SVB Collapse
Alexandre Tanzi, Bloomberg

Deposits at US lenders continued to slide in the week before three bank failures triggered a bout of global financial turmoil. Bank deposits fell by $54.4 billion to $17.6 trillion in the week ended March 8, according to Federal Reserve data released Friday.

U.S. sees deposits stabilizing as some regional banks reel

David Lawder et al, Reuters

A U.S. official said on Sunday that the deposit outflows that left many regional banks reeling in the wake of Silicon Valley Bank’s failure had slowed and in some cases reversed, as investors tried to ascertain whether the crisis was contained.

First Republic Bank Looms Large for U.S. Regulators After Credit Suisse Sale

David Benoit and Andrew Ackerman, The Wall Street Journal

As jittery markets prepare to open Monday, U.S. officials’ main concern is First Republic Bank, which required rescue funding last week from a group of the nation’s biggest banks.

S&P cuts First Republic deeper into junk, says $30 billion infusion may not solve problems

Jonathan Stempel and Anirudh Saligrama, Reuters

First Republic Bank saw its credit ratings downgraded deeper into junk status by S&P Global, which said the lender’s recent $30 billion deposit infusion from 11 big banks may not solve its liquidity problems.

First Republic says it is ‘well positioned’ to weather deposit activity
Joshua Franklin, Financial Times

Embattled US lender First Republic Bank said on Sunday it was “well positioned” to cover any short-term deposit activity, after it was rocked by client withdrawals in the wake of Silicon Valley Bank’s collapse.

Close to 190 banks could face Silicon Valley Bank’s fate, according to a new study

Swapna Venugopal Ramaswamy, USA TODAY

On the heels of Silicon Valley Bank’s collapse earlier this month, 186 more banks are at risk of failure even if only half of their depositors decide to withdraw their funds, a new study has found.

Asset concerns weigh on U.S. regional bank deal talks

David French, Reuters

First Republic Bank and PacWest Bancorp are among the banks that have been speaking to peers and investment firms about potential deals in the wake of U.S. regulators taking over Silicon Valley Bank and Signature Bank this month amid a flight of depositors, sources have said.

FDIC to relaunch sale of Silicon Valley Bank, moves toward break-up plan

Reuters

The U.S. Federal Deposit Insurance Corp (FDIC) is planning to relaunch the sale process for Silicon Valley Bank after failing to attract buyers in its latest auction, with the regulator seeking a potential break-up of the failed lender, according to people familiar with the matter.

US lawmakers urge probe of Goldman’s role in Silicon Valley Bank failure
Eric Platt, Financial Times

California Democrats say authorities should analyse whether Wall St bank operated ‘at arm’s length’ in advising lender.

Fed Raised Concerns About SVB’s Risk Management in 2019
Andrew Ackerman and Dave Michaels, The Wall Street Journal

The Federal Reserve raised concerns about risk management at Silicon Valley Bank starting at least four years before its failure earlier this month, documents show.

Silicon Valley Bank was warned by BlackRock that risk controls were weak

Antoine Gara and Brooke Masters, Financial Times

Consultants said systems lagged behind peers more than a year before lender’s collapse fomented a banking crisis.

Charles Schwab Customers Deposit $16.5 Billion During Banking Crisis

PYMNTS

Charles Schwab says it saw “strong inflows” from clients amid this month’s banking crisis. Between March 10 and March 16, customers brought $16.5 billion in deposits, the brokerage firm announced Friday (March 17).

Yellen, Powell welcome Swiss bank deal as step toward market stability

Victoria Guida, Politico

The deal comes amid jitters in the U.S. banking system after the failure of two regional lenders led American authorities to step in to protect uninsured depositors.

Goldman Readies Claims Trading for Wiped Out Credit Suisse Debt

Reshmi Basu and Carmen Arroyo, Bloomberg

Goldman Sachs Group Inc. traders were preparing to take bids on claims against Credit Suisse Group AG’s riskiest bonds after the takeover of the Swiss lender wiped out about 16 billion Swiss francs ($17.3 billion) of the debt.

HUD restores 2013 rule targeting unintentional discrimination

Katy O’Donnell, Politico Pro
The Biden administration on Friday finalized a rule restoring an Obama-era fair housing regulation that had been watered down by the Trump administration.

Only two large US cities are affordable for new home buyers

Daniel de Visé, The Hill

Only two of the 50 largest U.S. cities are affordable for first-time home buyers, according to a new analysis that weighs average list prices against local incomes.

Mom-and-pop landlords stepping in as ‘mega-investors’ retreat from single-family market

Chris Clow, Housing Wire

Single-family home purchase demand by investors remained steady in the fourth quarter of 2022, despite a dip in iBuying and larger investor demand, according to a report released this month by CoreLogic.

‘Everybody’s in Limbo’: Bank Chaos Leaves Crypto With Dwindling Options
Hannah Miller, Bloomberg

Crypto startups are left searching for alternative banking solutions after the collapse of three US banks with ties to the digital-asset industry and its backers.

FTX Had a Nearly $7 Billion Balance Sheet Hole When it Went Bust

Jeremy Hill, Bloomberg

The FTX crypto empire had a roughly $6.8 billion gap in its balance sheet when it filed for bankruptcy last year, advisers to the group have determined.

FTX transferred $2.2 bln to Bankman-Fried via related entities, new managers say

Reuters

Bankrupt cryptocurrency exchange FTX made transfers of about $2.2 billion to company founder Sam Bankman-Fried through related entities, the company’s new management said.