Finance industry in the spotlight on Capitol Hill:

Former executives of recently failed banks — including Gregory Becker of Silicon Valley Bank, as well as Scott Shay and Eric Howell of Signature Bank — will testify before the Senate Banking Committee on Tuesday. The former execs can expect a grilling from both sides of the aisle: committee Chairman Sherrod Brown (D-Ohio) and ranking member Tim Scott (R-S.C.) said in a letter to Becker in March that he “must answer for the bank’s downfall.”

Fed Vice Chair for Supervision Michael Barr, Federal Deposit Insurance Corp. Chairman Martin Gruenberg and acting Comptroller of the Currency Michael Hsu will testify in the semi-annual oversight hearing before the House Financial Services Committee on Tuesday. Barr, Gruenberg and Hsu will also testify Thursday before the Senate Banking Committee.

Mark Bialek, inspector general of the Federal Reserve System and the Consumer Financial Protection Bureau, will testify before the Senate Banking committee on Wednesday in a hearing titled, “Strengthening Accountability at the Federal Reserve: Lessons and Opportunities for Reform.” 

The House Financial Services Committee will hold a joint hearing on the “Continued Oversight Over Regional Bank Failures” on Wednesday. 

As the debt ceiling debate turns:

Biden and congressional leaders have agreed to meet this week to continue discussions on the debt ceiling. A White House meeting last week was described by participants as productive but the group agreed to postpone a second meeting to let staffers continue to work on the matter.

Rep. David Joyce (R-Ohio) will speak with Washington Post Live on Thursday in a session on the debt ceiling debate.

Mark Zandi, chief economist at Moody’s Analytics, will join the Center for American Progress on Thursday to discuss “The Economic Consequences of Default.”

Regulators on the road:

The Independent Community Bankers of America holds its Capital Summit this week. On the schedule:

Monday: 

• CFPB Director Rohit Chopra, former FDIC Chair Sheila Bair and former Kansas City Fed President Esther George. 

Tuesday:

• Treasury Secretary Janet Yellen and Rep. Roger Williams (R-Texas), chairman of House Small Business Committee.

Wednesday:

• Rep. Andy Barr (R-Ky.), chairman of the House Subcommittee on Financial Institutions and Monetary Policy, and Sen. Kevin Cramer (R-N.D.), member of the Senate Banking Committee. 

Chopra will also speak at the CFPB’s 2023 Consumer Advisory Board Meeting on Tuesday, and its Combined Community Bank Advisory Council and Credit Union Advisory Council Meeting on Wednesday

Commerce Secretary Gina Raimondo joins Washington Post Live to discuss “The Workforce of Tomorrow” on Thursday. 

Hsu will speak Friday at the Asian Real Estate Association of America’s 2023 Diversity and Fair Housing Summit. 

Fedspeak roundup:

Monday: 

• The Fed’s Cook gives the commencement address at the U.C. Berkeley Spring 2023 Economics graduation ceremony.

Monday and Tuesday:

• Securities and Exchange Commission Chair Gary Gensler, Atlanta Fed President Raphael Bostic, Richmond Fed President Tom Barkin, Chicago Fed President Austan Goolsbee and Dallas Fed President Lorie Logan will take part in the Federal Reserve Bank of Atlanta’s 2023 Financial Markets Conference.

Tuesday: 

• Cleveland Fed President Loretta Mester will speak at the Global Interdependence Center Central Banking Series: Dublin event.
• New York Fed President John Williams will speak at an event organized by the University of the Virgin Islands.

Thursday:

• Jefferson speaks at the National Association of Insurance Commissioners International Insurance Forum in Washington, D.C.

Friday:

• Fed Chair Jerome Powell, Williams and former Fed Chair Ben Bernanke will speak at the Thomas Laubach Research Conference in Washington, D.C.

• Fed Governor Michelle Bowman speaks at the Texas Bankers Association Annual Convention in San Antonio. 

And …

The SEC’s Division of Trading and Markets will hold an open meeting Wednesday to discuss whether to propose new rules regarding the contents of a covered clearing agency’s recovery and wind-down plan and whether to amend rules regarding the margin requirements applicable to a covered clearing agency providing central counterparty services.

The debt ceiling slow dance: 

• The Congressional Budget Office said Friday that the country can “probably” avoid defaulting on its debt through the end of July by using tax revenues and implementing emergency measures after June 15. (CNBC)
• The Bipartisan Policy Center released an updated “X-date” prediction last week, saying that the country could now become unable to pay its bills between early June and early August. (Politico)
• A meeting between Biden and congressional leaders Tuesday did not lead to any major breakthroughs on the U.S. debt ceiling impasse, and Biden said that while he was “considering” the use of the 14th amendment to circumvent Congress and nix the debt ceiling altogether, he noted that the tactic would have to be litigated and couldn’t take place until “months down the road.” (Politico)
• Yellen said the option for Biden to circumvent congressional action by using the 14th Amendment to effectively ignore the debt ceiling was “legally questionable,” and while she also views alternatives such as minting a $1 trillion coin as risky, Yellen said she does support the idea of eliminating or significantly altering the current debt-limit authorization system. (The Wall Street Journal)
• Biden reiterated the risks that a U.S. default on its debt poses to the economy and the country’s reputation, noting that consequences could include “higher interest rates for credit cards, car loans and mortgages” as well as delays in “payments for Social Security, Medicare, our troops, veterans.” (Bloomberg)
• Senate Minority Leader Mitch McConnell (R-Ky.) said in an interview with Bloomberg that he has no “little secret plan” to overcome the impasse over the debt limit and that he told Biden that it was up to him and House Speaker Kevin McCarthy (R-Calif.) to “sit down now and settle it.” (Bloomberg)
• Leaders of the Treasury Borrowing Advisory Committee — which include Goldman Sachs Group Inc. executives Beth Hammack and Ashok Varadhan and former JPMorgan Chase & Co. Chief Operating Officer Matt Zames — sent a letter to Yellen, calling the potential for a U.S. debt default “unthinkable,” adding that the “magnitude of adverse consequences from a prolonged negotiation, or a default, is unquantifiable.” (Bloomberg)

Trump shrugs off debt default possibility:

• In a CNN town hall event, former President Donald Trump urged Republicans to stick to their mettle over debt ceiling negotiations, saying that if Democrats would not agree to Republicans’ “massive” spending cuts, the GOP is “gonna have to do a default.” The 2024 GOP presidential frontrunner said the situation “could be really bad, it could be maybe nothing, maybe it’s a bad week, or a bad day, who knows?” (Financial Times)

Fed eyes CRE risk:

• The Federal Reserve said in its latest financial stability report that while domestic banks have ample liquidity, concerns about the commercial real estate market and commercial property debt have led the regulator to increase its scrutiny of banks with substantial commercial real estate risk. (Bloomberg)

17.3%

That’s how much consumer sentiment has increased among U.S. adults from households earning $100,000 or more annually since the start of the year, according to Morning Consult’s Index of Consumer Sentiment. Read more on trends among other household incomes here.

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Bethan Moorcraft, Moneywise

2) Visualising US bank failures

Financial Times

3) I Don’t Have the Secret to Making Hard Decisions, but I Do Have a Yellow Note Pad

Robert Rubin, The New York Times

4) The CEO of a massive private equity firm says he knows exactly what’s going on with the ‘non-recession’ recession we’re having right now

Tristan Bove, Fortune

5)  These states will be hit the hardest if the US debt ceiling standoff isn’t resolved 

Matt Egan, CNN

6) Brain Drain Threatens the F.D.I.C. and Its Efforts to Regulate Banks

Alan Rappeport, The New York Times

7) The Supreme Court Case That Could Threaten the SEC’s Climate-Disclosure Rule

Dylan Tokar, The Wall Street Journal

8) New cars, once part of the American Dream, now out of reach for many

Rachel Siegel and Jeanne Whalen, The Washington Post

9)  Here’s who misses checks if the U.S. hits the debt brink in June 

Caitlin Emma, Politico

10) Yellen Doubts Biden Administration Can Avoid Default Without Congress

Andrew Duehren, The Wall Street Journal

• Biden’s Education Secretary confirms the process of resuming student-loan payments will start ‘no later than June 30’: ‘The emergency period is over’ (Insider)
• Fed Official Signals Support for Further Rate Increases (The Wall Street Journal)
• Fed’s Waller Says Climate Change Doesn’t Pose Serious Financial Risk (Bloomberg)
• Williams Says Fed Will Keep Watch on Lending Conditions (The Wall Street Journal)
• Inflation Eased in April but Remains Stubbornly High (The Wall Street Journal)
• Big US banks to pay billions to replenish failure fund (Reuters)
• Yellen plans to huddle with Wall Street bankers as default looms (Politico)
• Blackstone in talks with US regional banks over lending partnerships (Financial Times)
• Goldman Sachs to pay $215 mln to end gender bias lawsuit (Reuters)
• Ex-Coinbase Worker Gets Two-Year Prison Term in First Cryptocurrency Insider-Trading Case (The Wall Street Journal)