What we’re reading (3/19)
“UBS Agrees To Buy Credit Suisse For More Than $3 Billion” (Wall Street Journal). “The deal between the twin pillars of Swiss finance is the first megamerger of systemically important global banks since the 2008 financial crisis when institutions across the banking landscape were carved up and matched with rivals, often at the behest of regulators.”
“Two Big Ideas For Preventing Another Banking Crisis” (DealBook). “Not everyone thinks deposits should be free of risk. Sheila Bair, who was the chair of the F.D.I.C. during the financial crisis, practically groaned when I brought up the idea of insuring all deposits. ‘These were big tech companies like Roku whining and crying about their uninsured deposits,’ she said. ‘If a $200 billion bank can bring down the banking system, then we don’t have a stable, resilient system.’”
“Before Collapse of Silicon Valley Bank, the Fed Spotted Big Problems” (New York Times). “Silicon Valley Bank’s risky practices were on the Federal Reserve’s radar for more than a year — an awareness that proved insufficient to stop the bank’s demise. The Fed repeatedly warned the bank that it had problems, according to a person familiar with the matter. In 2021, a Fed review of the growing bank found serious weaknesses in how it was handling key risks. Supervisors at the Federal Reserve Bank of San Francisco, which oversaw Silicon Valley Bank, issued six citations…But the bank did not fix its vulnerabilities.”
“Fed Poised To Approve Quarter-Point Rate Hike Next week, Despite Market Turmoil” (CNBC). “Even with turmoil in the banking industry and uncertainty ahead, the Federal Reserve likely will approve a quarter-percentage-point interest rate increase next week, according to market pricing and many Wall Street experts.”
“FDIC Announces Agreement To Sell Signature Bank Assets To New York Community Bancorp” (Reuters). “A subsidiary of New York Community Bancorp (NYCB.N) has entered into an agreement with U.S. regulators to purchase deposits and loans from New York-based Signature Bank, which was closed earlier this month.”
