Germany, Europe’s New ‘Problem Child,’ Has a Series of Self-Inflicted Issues

Is German Deindustrialization Underway?

Now an exercise in extinguishing multiple fires

Fed's Hope of A Soft Landing Dashed

Private Equity Carried Interest Provision Lives On

Banks everywhere are ratcheting up their credit card marketing activities greatly increasing marketing expenses. Credit-card issuers are staying aggressive and shrugging off potential liquidity issues from consumers, despite rising interest rates and potential recession.  

Big Banks Keep Pushing Credit Cards to Consumers

Run on digital assets leads platforms to freeze user accounts, including withdrawals. Bankruptcy looms. 

The Big Chill in Crypto

Bank stocks are often perceived to be a harbinger of broader economic trends so BankerAdvisor wheeled around some of the big banks’ reported second quarter earnings to spot broad movements

Tea Leaves and Emerging Economic Trends

BankerAdvisor's Ongoing Series of How Fintech is Making Lives Better

Remitting it Forward

Rising interest rates should ostensibly benefit all banks taking deposits. But, while large consumer institutions benefit, higher-risk banks have been hammered down

Lending Profits Differ Greatly by Bank

Firm to combine asset, wealth and consumer banking into one unit

Goldman Sachs Reorganization 

Coinbase, Google Cloud, MinePlex among deals

Crypto Still Has Fans...And Deals

A new monster has emerged to compete with inflation: broad banking instability, particularly for smaller and regional banks

Pick Your Poison: More Banks in Peril or Prolonged Inflation

Bank of Ireland Group plc is a publicly traded, large financial services company based in Dublin founded in 1873.  Bank of Ireland provides personal and business banking services including mortgages, credit cards, personal loans, business loan, investments, pension, insurance and other financial services. Bank of Ireland is regulated by the Central Bank of Ireland.

Ireland

Europe

Get expert feedback on Bank of Ireland capabilities and product offerings. BankerAdvisor helps you review and compare hundreds of banks to help you find the best one for you.

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Bank of Ireland

Younger banking customers are making a decided move away from megabanks like Bank of America, JPMorgan Chase, and Wells Fargo for digital banks and fintech like Chime, PayPal, and Square, according to research done by Cornerstone Advisors.

Market Share is Moving to FinTechs and Digital Banks

CrossFirst Bankshares in Leawood, Kansas, has agreed to pay $75 million in cash to acquire the $567.5 million-asset Farmers and Stockmens Bank in Clayton, New Mexico.

CrossFirst Acquires Farmers and Stockmens Bank

The Canadian online loan provider VersaBank has agreed to pay Stearns Financial Services $13.5 million for a single-branch bank in Holdingford, Minnesota.

The acquisition of the St. Cloud, Minnesota, company's Stearns Bank Holdingford, which has a federal charter from the Office of the Comptroller of the Currency, would mark VersaBank’s official entrance into the U.S. market, according to a spokesperson for the digital-only bank.

VersaBank Enters US Market 

Crypto lender Voyager filed for Chapter 11 bankruptcy protection a week after halting withdrawals and two weeks after getting a $485 million bailout from FTX founder Sam Bankman-Fried’s firm Alameda Research.

Alameda Research now stands as Voyager’s biggest creditor with an outstanding loan of $75 million, according to multiple reports on Wednesday (July 6).

Voyager and its two affiliates, Voyager Digital LLC and Voyager Digital Holdings, filed Chapter 11 voluntarily in the U.S. Bankruptcy Court of the Southern District of New York to restructure and “create a path” to resume operations and “return value to customers,” according to a press release. 

Crypto Lender Voyager Seeks Chapter 11 Protection

The co-founders of failed crypto hedge fund Three Arrows Capital appear to be on the run from creditors, according to court documents recently filed in New York.

Founders of Bankrupt Crypto Hedge Fund Three Arrows Capital Go Missing

Celsius Network, a large cryptocurrency lender filed for bankruptcy after freezing customer assets that led to increased customer redemptions following a decline in cryptocurrency values.

Crypto Lender Celsius Files for Bankruptcy 

Forsage claimed to be a decentralized smart contract platform built on the Ethereum, Tron, and Binance blockchains allowing retail investors to earn profits by recruiting other investors.

SEC charges 11 people in alleged $300 million crypto Ponzi scheme

Global Payments announced plans to acquire EVO Payments today. EVO Payments provides payment technology and acquiring services solutions. 

Global Payments to buy EVO Payments for $4 billion 

TD Bank Group  and Cowen Inc. today announced a definitive agreement for TD to acquire Cowen in an all-cash transaction valued at US$1.3 billion.

TD to Expand its U.S. Investment Banking Business and Capabilities with Acquisition of Cowen Inc.

Robinhood CEO Vlad Tenev said the company will reduce its headcount by about 23%. The layoffs will be primarily in operations, marketing and program management. Tenev blamed “deterioration of the macro environment, with inflation at 40-year highs accompanied by a broad crypto market crash.”

Robinhood cutting about 23% of jobs, releases second-quarter earnings

Protego Trust Bank named Ron Totaro chief executive officer as the bank continues its push to serve institutional clients in crypto and digital assets. Totaro’s most recent role was CEO at Tassat Group, a blockchain-based tech firm focused on digital payments. In 2021, Protego raised $70 million in a Series A with investors including crypto exchanges Coinbase (COIN) and FTX as well as Digital Currency Group, the parent company of CoinDesk.

Digital Asset-Focused Bank Protego Trust Names Ron Totaro as CEO

Over the past week, the bitcoin price soared 4.9%, at one point hitting a high of just over $22,500. Most major altcoins are recovering too. Rumor has it bitcoin will soon take yet another step to mainstream adoption. People familiar with the matter told Wall Street Journal that Fidelity, the world's fourth largest asset manager overseeing $4.3 trillion in assets, is planning to let individual investors trade bitcoin.



‘Coming To 34 Million Accounts’ 

Fintechs like Chime, Current, N26, Level, Step, Varo and Moven are partnering with banks in an effort to make younger consumers comfortable doing all their banking online

Most Fintechs Partner with Banks

Last week, 1,668 retailers and more than 200 trade organizations urged the US Congress to pass the The Credit Card Competition Act, which gives merchants a choice in the routing of credit card transactions to networks other than Visa or Mastercard.

Breaking Visa and Mastercard Dominance in US

Nasdaq Digital Assets will begin by developing a cryptocurrency custody solution that will bring together the “best attributes of hot and cold crypto wallets”

Nasdaq to Launch Crypto Custody Service

But how far will the industry consolidate, and how many banks will the U.S. ultimately end up with? Is there something that will prevent America's financial system from shrinking until it resembles something like the Canadian banking system (about 80 banks operate in that country) or the airline industry (roughly 60 providers)?



Are there too many banks?

The macroeconomic outlook in Europe is bleak as supply disruptions and the impact of Russia’s war in Ukraine on energy and food prices continue to stifle growth

HSBC warns investors to avoid European stocks

According to Crunchbase data, M&A activity targeting VC-backed crypto startups hit an all-time high in the first quarter of the year when 16 were announced. However, deal pace has reverted to barely a trickle, with just seven deals in the last nearly two full quarters.

Crypto M&A Slows to a Crawl

JPMorgan is piloting a platform it created for property owners and managers that automates the invoicing and receipt of online rent payments.  The majority of rent payments are still paid with checks.  JPMorgan sees the opportunity to leverage data and analytics for customers with rent rates, investments, and tenant screening.

JPMorgan Chase wants to disrupt the rent check with its payments platform for landlords and tenants

Banks looking to boost their digital capabilities reportedly may be taking a closer look at acquisitions of FinTechs as the valuations of FinTechs have fallen 70% this year.  The decline in FinTech valuations has been driven by the economic downturn, rising interest rates, and lower investor confidence after the collapse of the cryptocurrency exchange FTX. In addition, banks earnings have increased as their lending business benefits from rising interest rates, and it’s easier for banks to buy FinTechs than to merge with other banks because the latter involves more regulatory scrutiny.

FinTech Winter May Lead Banks to Increase Acquisitions 

Small to midsized businesses (SMBs) are investing in new tools, including payment solutions to explore the size and scale of the opportunity for SMB retail and how merchants can drive growth with new payment technologies. Retailers are chasing of seamless payment experiences including buy now, pay later and considering new payment options for payment technologies that can streamline payment experience and help achieve scale for their businesses.  

Small Business Survival May Hinge on Digital Payment Features

Shares of Silvergate declined 42.7% on Thursday after the crypto-focused bank released preliminary fourth-quarter results that showed massive customer withdrawals. Total deposits from digital asset customers declined to $3.8 billion from $11.9 billion at the end of the third quarter, a decline of roughly 68% as crypto exchange FTX, a Silvergate customer, collapsed in scandal, raising questions about the stability of the digital asset industry. At the end of December, $150 million of the bank’s deposits were held by customers who had filed bankruptcy, Silvergate said.

Silvergate Capital tanks more than 40% after crypto bank discloses massive fourth-quarter withdrawals

Moneyhub, founded in 2014, creates software for open banking, open finance, and open data applications announced it received an additional $18.2 million (£15 million) investment from savings and retirement business Phoenix Group. The funding round is a follow-on to the recent $48.6 million (£40 million) Moneyhub received in October 2022 which was led by Legal & General and Lloyds Banking Group led that round, contributing $42.4 million (£35 million), and Shawbrook Bank. Moneyhub’s total funding now adds up to $81.6 million.. 

Moneyhub Raises $18.2 Million, Completing $66.8 Million Funding Round

The legendary co-founder of Boston-based investment firm GMO argued in a Tuesday paper, that “the first and easiest leg of the bursting of the bubble we called for a year ago is complete.” While the downturn has wiped the most “extreme froth” off the market, valuations remain well above long-term averages, he said, noting that in the past they have tended to overcorrect, falling below their long-term trend line as fundamentals deteriorate. Grantham estimated the trend line value of the S&P 500 index, adjusted upward for trend line growth and expected inflation, will be around 3,200 by the end of 2023 - roughly a 17% fall for the year.

Jeremy Grantham says ‘easiest leg’ of stock-market bubble burst is over. Here’s what’s next. 

The Consumer Financial Protection Bureau has proposed a new rule to ban excessive credit card late fees. Congress banned excessive fees in 2009, but the Federal Reserve Board of Governors issued actions to circumvent the law, the CFPB said.  The CFPB rule proposed Wednesday would lower the amount consumers can owe for late fees under the immunity provision to $8 from as much as $41, end the automatic annual inflation adjustment for the provision and cap late fees at 25% of the minimum payment owed by the cardholder. The new rule could potentially reduce excessive late fees by as much as $9 billion per year.

Consumer Financial Protection Bureau targets excessive credit card fees in new rule proposal

Payment process Fidelity National Information Services, known as FIS, said Monday that it will spin off its merchant services business to create two separate publicly-traded companies with the new entity reclaiming its former name, Worldpay.  FIS is making the major moves to break apart the company and squeeze savings out of the operations after two activist shareholders, D.E. Shaw and Jana Partners, made investments in the company last year. Worldpay will be more likely to pursue acquisitions as a result of the plan to spin off the company. 

FIS plans to spin off merchant unit

Nomura's digital assets subsidiary, Laser Digital, has invested in Infinity, a decentralized finance (DeFi) protocol for institutional lending and borrowing. Infinity offers an interest rate protocol that forms the basis for benchmark rates and institutional-grade lending, borrowing, and risk management in DeFi. Infinity’s wholesale exchange provides inter-exchange clearing, fixed and floating rate markets, as well as enterprise-grade risk management utilising hybrid on-chain/off-chain infrastructures.

Nomura invests in 'Hybrid Finance' startup Infinity

Cryptocurrency prices fell on Friday as investors weighed the latest financial woes at Silvergate Capital and assessed what a potential bankruptcy at the crypto bank could mean for the broader crypto industry.The drop came late Thursday night, hours after several crypto companies said they’d stopped accepting or initiating payments to or from Silvergate – including Coinbase, Galaxy Digital, Circle, Paxos and Bitstamp. Silvergate, which has become the go-to bank for cryptocurrency businesses, gave notice Wednesday that it won’t meet an extended deadline to file its annual report and warned it may not be able to operate for another 12 months. 

Bitcoin, ether slide on Friday as investors weigh potential fallout from Silvergate woes

Shares of Silicon Valley Bank, tumbled for a second day Friday and weighed on the entire banking sector again on concern that more banks would incur heavy losses on their bond portfolios.  Concern among founders and venture capital investors spiked earlier this week after Silicon Valley Bank surprised the market by announcing late Wednesday it needed to raise $2.25 billion in stock. The shares were down another 61% in premarket trading Friday.

Silicon Valley Bank drops another 60%, weighing on the bank sector again

Bill Ackman mentioned in a Twitter thread that the government could “guarantee deposits in exchange for a dilutive warrant issuance and other covenants and protections.” Additionally, if the bank is solvent, he said the intervention would then give the bank some time to raise new capital and restore itself.  Ackman added that he didn’t see another bank “stepping in” after what the “Feds did to JPMorgan,” in reference to the banking giant’s 2008 purchase of Bear Stearns and Washington Mutual at the government’s request, and its subsequent inheritance of $13 billion in penalties from the mis-sale of bad mortgages.

‘I don’t see another bank stepping in to help.’ Bill Ackman suggests government intervention to save Silicon Valley Bank parent. 

Major stock indexes fell on Thursday as shares of banks across the nation collapsed following a stark warning from one of Silicon Valley's biggest lenders, which said it hopes to raise billions of dollars to help shore up cash during the challenging economy—adding to industry concerns stoked by the collapse of crypto bank Silvergate and the threat of rising interest rates.

Dow Plunges Over 500 Points As Bank Stocks Collapse

The U.S. cryptocurrency firm Circle’s USD Coin lost its dollar peg and fell to a record low Saturday morning. The company revealed it has nearly 8% of its $40 billion in reserves tied up at the collapsed lender Silicon Valley Bank. USDC is designed to trade at $1, but it fell below 87 cents on Saturday, according to data from CoinDesk. In a tweet Friday, Circle said it has $3.3 billion in remaining reserves at SVB. The company called for the continuity of the bank and said it will follow guidance from regulators.

Stablecoin USDC breaks dollar peg after firm reveals it has $3.3 billion in SVB exposure

SVB Financial Group, decades-long focused on the venture capital industry, faced a perfect storm, but there are plenty of other banks that would face big losses if they were forced to dump securities to raise cash.  Silicon Valley Bank has failed following a run on deposits after its parent company’s share price crashed a record 60% on Thursday. The bank announced a $21 billion dollars in securities sales on Thursday, SVB said it had taken the action not only to lower its interest-rate risk but because “client cash burn has remained elevated and increased further in February, resulting in lower deposits than forecasted.” 

20 banks that are sitting on huge potential securities losses—as was SVB 

Billionaire investor Bill Ackman posted a lengthy tweet about the Silicon Valley Bank collapse Saturday. Ackman criticized the federal government's response and its lack of monitoring SVB for risk. He said the government has "about 48 hours to fix a-soon-to-be-irreversible mistake" with its handling of SVB.

Billionaire investor Bill Ackman says feds 'screwed up' handling of Silicon Valley Bank collapse, warns they have '48 hours to fix a soon-to-be-irreversible mistake'

U.S. regulators said Sunday it shut down New York-based Signature Bank, a second financial institution they shuttered after Silicon Valley Bank’s collapse. “We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer,” Treasury, Federal Reserve, and FDIC said in a joined statement.

Regulators close New York’s Signature Bank, citing systemic risk

Asian equities curbed yesterday’s enthusiasm driven by China’s positive policies following the National People's Congress as SVB’s collapse crushed Asian investor sentiment on financial contagion fears.

SVB Financial Contagion Fears Go Global

n a harsh blow to an already-reeling sector, Moody’s Investors Service on Monday cut its view on the entire banking system to negative from stable. The firm, part of the big three rating services, said it was making the move in light of three key failures that prompted regulators to step in Sunday with a dramatic rescue plan for depositors and other institutions impacted by the crisis.

Moody’s cuts outlook on U.S. banking system to negative, citing ‘rapidly deteriorating operating environment’

Signature Bank was reportedly the target of a criminal investigation prior to its downfall. Federal authorities were examining the bank's relationships with its crypto clients. The news comes as regulators are considering tougher rules for mid-sized banks following the recent collapse of Signature and two other banks. According to the Bloomberg report, the U.S. Justice Department (DOJ) is investigating whether Signature took proper measures to sniff out money laundering by its clients. The Securities and Exchange Commission (SEC) is reportedly also involved.

Report: Feds Probed Signature Bank Money Laundering Controls

‘Based on my understanding of this dynamic and what is now happening (which line up), this bank failure is a “canary in the coal mine” early-sign dynamic that will have knock-on effects in the venture world and well beyond it.’ Dalio argued that SVB’s failure was a “very classic event” in what he termed the “very classic bubble-bursting part of the short-term debt cycle.” That phase occurs when tight money aimed at curtailing credit growth and inflation leads to a “self-reinforcing” contraction in debt and credit. That means a “contagion process” that sees dominoes fall until central banks relent and create “easy money,” which then sets the stage for the next big debt problem.

Why Ray Dalio says SVB collapse is a ‘canary in the coal mine’ 

Hedge fund manager Bill Ackman is not happy that the systemically important banks (SIBs) have been chivvied into recycling the deposits they received from First Republic Bank (FRB) back into the struggling lender. “The result is that FRB default risk is now being spread to our largest banks. Spreading the risk of financial contagion to achieve a false sense of confidence in FRB is bad policy. The SIBs would never have made this low return investment in deposits unless they were pressured to do so and without assurances that FRB deposits would be backstopped if it failed,” Ackman wrote in a tweet late Thursday. 

‘We need to stop this now.’ First Republic support is spreading financial contagion, says Ackman. 

A group of creditors for Silicon Valley Bank's parent are reportedly pushing the company to file for bankruptcy. The group, most of which bought SVB Financial Group’s bonds ahead of last weekend, now want the company to declare bankruptcy and sell off its non-bank businesses. According to the report — which cites sources familiar with the matter — the creditor group holds a substantial piece of SVB Financial's $3.4 billion face value of bonds. While regulators say the company's stock is worthless, it also owns some potentially high-value assets: its investment manager SVB Capital, which oversees $9.5 billion, and the investment bank SVB Securities and wealth-management firm SVB Private.

Creditors Want SVB Parent to File for Bankruptcy

Swiss banking giant Credit Suisse on Wednesday saw its shares fall to a new record low, pressuring the broader market and the rest of the European banking sector days after two lenders collapsed in the U.S.  Credit Suisse shares fell as much as 23%, extending the declines that seen its shares drop 75% over the last 52 weeks. On Tuesday, Credit Suisse said in its annual report that it had material weaknesses in financial controls. Credit Suisse has lost money for five straight quarters, and its wealthy clients in the fourth quarter withdrew about $100 billion from the bank.

Credit Suisse shares tumble to new record low as European banking sector reels 

The Swiss regulator FINMA announced Sunday that the so-called additional tier-one bonds, which are widely regarded as relatively risky investments, will be written to zero as part of the deal.  The move has angered Credit Suisse AT1 bondholders as their investments have seemingly been lost. Credit Suisse’s takeover deal, worth $3.2 billion, by rival Swiss bank UBS was agreed Sunday with the help of Swiss authorities.

The $17 billion wipeout of Credit Suisse bondholders has not gone down well in Europe

The New Jersey-based regional bank has a higher profile after a trio of recent bank collapses – and will likely face added regulatory scrutiny. Cross River Bank – a venture capital-backed, FDIC-insured regional bank in New Jersey that’s part financial institution and part fintech – has an increased profile in crypto circles thanks to the collapses of crypto-friendly Silvergate Bank, Silicon Valley Bank and Signature Bank in under a week. 

What Is Cross River Bank, USDC Stablecoin Issuer Circle’s New Partner?

Struggling banks kept alive by government guarantees can cause havoc. As a resutl of concerns over more bank runs like the one on Silicon Valley Bank, commentators and government officials are discussing expanding the current $250,000 cap on deposit insurance or even insuring all bank deposits. When other countries like Japan tried insuring all bank deposits, it didn’t help weak banks attract more deposits. That forced the weak banks to double down on risky investments to make money.

The dark side of insuring all bank deposits: zombie banks 

 Pacific Western Bank has raised $1.4 billion from investment firm Atlas SP Partners, the lender said on Wednesday, as the crisis-hit sector scrambles to limit the damage from the recent collapse of two mid-sized lenders.

Pacific Western Bank raises $1.4 bln, says deposits have stabilized

eToro recently completed a $250 million funding round at a valuation of $3.5 billion. Investors include ION Group, SoftBank Vision Fund 2, Velvet Sea Ventures, and a number of existing investors. This funding stems from an Advance Investment Agreement (AIA) which eToro entered into in February 2021 as part of its proposed SPAC transaction.

eToro raises $250 million at $3.5 billion valuation

The deal will see First Citizens Bank purchase around $72 billion of Silicon Valley Bank assets at a discount of $16.5 billion.  A further $90 billion in securities and other assets will remain “in receivership for disposition by the FDIC.”  The U.S. Federal Deposit Insurance Corporation transferred all SVB deposits and assets into a new “bridge bank” earlier this month in an effort to protect depositors of the failed lender.

First Citizens to buy large chunk of failed Silicon Valley Bank

Raleigh-based First Citizens and the Holding family have kept a low profile for decades, but the family-owned bank has been on a mission to expand nationwide via opportunistic acquisitions. Its growth has accelerated since the 2008 financial crisis thanks in part to a series of more than 20 FDIC-assisted acquisitions of small failed banks, including California’s $1.8 billion (assets) First Regional Bank, $1.1 billion Temecula Valley Bank, also based in Southern California, and $1.8-billion Denver-based United Western Bank. At the end of 2008, First Citizens had assets of $16.7 billion. Prior to this weekend’s SVB deal, the bank’s assets stood at $109 billion.

SVB’s New Owners, The Billionaire North Carolina Family Behind First Citizens, Are Quietly Building A Banking Empire

U.S.-based savings and investing startup Acorns has acquired London-based GoHenry, a startup focused on providing money management and financial education services to 6- to18-year-olds in an all-equity deal, the two companies announced today.

Acorns acquires UK’s GoHenry, a fintech focused on 6- to 18-year-olds

Stocks slipped Tuesday after First Republic Bank’s earnings report reignited concerns about the broader sector. Shares of First Republic Bank tumbled more than 40% after the regional bank posted its latest quarterly results, saying late Monday that deposits dropped 40% to $104.5 billion in the first quarter but have since stabilized. First Republic will also be trimming expenses, including slashing headcount by 20% to 25% in the second quarter. Bloomberg News reported Tuesday that the bank was trying to sell as much as $100 billion of loans and securities to restructure its balance sheet.

Dow falls 300 points as First Republic slide rekindles bank worries: Live updates

Moody’s Investor Services on Friday issued downgrades for 11 regional investors after the credit agency signaled last month that it was conducting reviews of some banks following the collapse of tech-centric Silicon Valley Bank. Moody’s said strains in the way banks are managing their assets and liabilities are becoming “increasingly evident,” and are pressuring profitability. Recent events “have called into question whether some banks’ assumed high stability of deposits, and their operational nature, should be reevaluated,” the ratings firm said in its report.

Moody’s downgrades 11 regional banks, including Zions, U.S. Bank, Western Alliance

Regional banks have received merciless scrutiny since the collapse of Silicon Valley Bank on March 10. Uninsured deposits and cash levels have been weighed—and where they’re found wanting, bank stocks have been cut in half. The next worry for regional banks could be commercial real estate. Postpandemic changes in how we work and shop are leaving vacancies across the country. If a recession arrives, experts warn, large numbers of property owners could default on their loans.

These 15 Banks Have a Risky Specialty. It Isn’t a Problem—So Far.

The recent collapses of tech-friendly banks, including Silicon Valley Bank (SVB), Signature Bank, Silvergate Bank and First Republic Bank, have rightly caused a global conversation about the future of banking, and even more so, of financial services. The Federal Reserve’s autopsy on Silicon Valley Bank’s failure puts blame partially on its own doorstep, while separate regulator reports on Signature Bank’s collapse cite that lender’s “poor management.” 

Banking Failures Must be a Wake-up Call for Regulatory Modernization, Says Cross River Bank CEO

Fund managers are warning of growing problems in the $5.6tn US commercial real estate industry that could prove painful for lenders already shaken by turmoil in the banking sector.  Rising interest rates, falling prices and waning demand for office space following the pandemic had strained the commercial property market. But these troubles intensified after this year’s failures of Silicon Valley Bank, Signature Bank and First Republic raised worries about other regional banks that account for the bulk of commercial real estate loans.


US lenders warned that commercial property is ‘next shoe to drop’

Charlie Munger has warned of a brewing storm in the US commercial property market, with American banks “full of” what he said were “bad loans” as property prices fall.  The comments come as turmoil ripples through the country’s financial system, which is reckoning with a potential commercial property crash following a handful of bank failures. “A lot of real estate isn’t so good anymore,” Munger said. “We have a lot of troubled office buildings, a lot of troubled shopping centers, a lot of troubled other properties. There’s a lot of agony out there.


Charlie Munger: US banks are ‘full of’ bad commercial property loans

These banks have high exposure to loans secured by office properties — here’s how their stocks have performed. Owners of office buildings face declines in rental income as companies right-size their space. Banks with commercial real-estate loans secured by office buildings face difficult times as loans mature. KBW analyst Jade Rahmani estimates that close to $1 trillion in commercial real estate (CRE) loans will mature in 2023 or 2024, with loans by banks making up about half of that total.

These banks have high exposure to loans secured by office properties — here’s how their stocks have performed

The Pershing Square Capital Management CEO said in a long tweet early Thursday that First Republic Bank would not have failed if the Federal Deposit Insurance Corporation temporarily guaranteed deposits while the sector waits for a new guarantee regime to be created. “At this rate, no regional bank can survive bad news or bad data as a stock price plunge inevitably follows, insured and uninsured deposits are withdrawn and ‘pursuing strategic alternatives’ means an FDIC shutdown over the coming weekend,” he added. “And there is no incentive to bid until Sunday after the failure.”

‘We are running out of time to fix this problem’ — Bill Ackman’s latest warning on regional banks

Remittance outfit Sendwave has launched a banking product for migrants in the United States. Sendwave, which is owned by London-based fintech Zepz, is offering select customers a FDIC-insured bank account with an accompanying debit card.


Sendwave launches bank account for migrants

BlackRock is set to acquire full control of London-based private debt manager Kreos Capital, which the investment giant said will accelerate the growth of its credit platform. The acquisition of the firm, which specialises in growth and venture debt lending strategies, "unlocks additional private debt capabilities" for BlackRock's clients to access a larger proportion of the risk/return spectrum, the company said. Kreos Capital has committed over €5.2bn across more than 750 transactions in 19 countries since its inception in 1998. It has provided financing to more than 550 pan-European and Israeli high-growth companies in the technology and healthcare sectors. 

BlackRock acquires private debt manager Kreos Capital in credit platform boost

Federal Reserve Chair Jerome Powell finds himself in a difficult place that no central banker wants to be: working to avert a credit crunch, which calls for looser monetary policy, while fighting high inflation, which demands the opposite. Strains in the banking industry, which followed the collapse of three midsize lenders this spring, help explain why some central bank officials are leaning toward holding interest rates steady at their meeting this week—even though the economy and inflation haven’t slowed as much as they expected.
But current and former central bankers say if stresses worsen, the Fed will face a more difficult trade off. Powell and his colleagues would have to choose between focusing on failing banks or high inflation.

Jerome Powell’s Big Problem Just Got Even More Complicated

Asset management giant Fidelity is close to submitting its own filing for a spot bitcoin exchange-traded fund, joining a long list of issuers keen to be first to market with such a product. A source familiar with the firm’s plans says that it could submit its filing as soon as Tuesday, following the lead of asset management giant BlackRock. BlackRock’s June 15 filing has been followed by other asset managers looking to launch their own spot bitcoin funds including Invesco, WisdomTree and Bitwise.



Fidelity preparing to submit spot bitcoin ETF filing: Source

Banking giant JPMorgan Chase and 40 other US banks are testing the Federal Reserve’s new instant payment infrastructure called FedNow. According to a new Federal Reserve press release, 41 banks and 15 service providers are wrapping up FedNow test trials ahead of an official launch of the service, which is scheduled for late July. According to the Federal Reserve, the FedNow Service aims to enable businesses and individuals to send and receive instant payments anytime.

JPMorgan Chase and 40 Other US Banks Conducting FedNow Trial Runs Ahead of the Instant Payment Service’s Launch

India’s largest private lender HDFC Bank has completed its merger with Housing Development Finance Corporation, the country’s biggest mortgage lender. The merged entity will be the world’s fourth largest bank, behind JPMogran Chase, Industrial and Commercial Bank of China and Bank of America, according to Soumya Rajan, CEO and founder of Mumbai-based Waterfield Advisors.  HDFC Bank announced in April last year that it will be acquiring its parent company Housing Development Finance Corporation, the largest home financing lender in India, in a $40 billion all-stock deal. 

India’s HDFC Bank completes $40 billion takeover of the country’s largest mortgage lender. Here’s what it means

Rising interest rates, losses on commercial real estate and heightened regulatory scrutiny will pressure regional and midsized banks, leading to a wave of mergers, sources told CNBC. Some of those pressures will be visible as regional banks disclose second-quarter results this month. Firms including Zions and KeyCorp already have warned of sinking revenues. Half the country’s banks will likely be swallowed by competitors in the next decade, according to Fitch analyst Chris Wolfe. “Some of these banks will survive by being the buyer rather than the target,” said incoming Lazard CEO Peter Orszag. “We could see over time fewer, larger regionals.”

The American banking landscape is on the cusp of a seismic shift. Expect more pain to come

A recent article was quoted as saying "that Wall Street is coming for crypto, whether early believers like it or not." Something has changed, and maybe the biggest change is that treasury managers want to use cryptocurrencies. If the customer wants it, then the big banks have to service it and there’s the rub. The big banks have stirred and incorporated digital assets, and specifically cryptocurrencies, into their remit. And then you know that cryptocurrencies are going mainstream when Standard and Poor’s (S&P) start to rate them. They don’t do that today, but they are moving that way. 

The moment you realise crypto has gone mainstream

SVB Financial Group has sued the US Federal Deposit Insurance Corporation in a bid to recover $1.9bn in cash that the regulator has kept since it took over the group’s banking subsidiary in March. SVB Financial Group, a parent holding company, filed for bankruptcy in March after Silicon Valley Bank became the ward of the FDIC following a $42bn bank run. SVB Financial said retention of the cash by the FDIC violated US bankruptcy law.


SVB Financial sues US banking regulator to recover $1.9bn

JPMorgan Chase executives warned that tougher regulations in the wake of bank failures this year would raise costs for consumers and businesses.  JPMorgan CEO Jamie Dimon said that other financial players could end up winners. “This is great news for hedge funds, private equity, private credit, Apollo, Blackstone,” Dimon said, naming two of the largest private equity players. “They’re dancing in the streets.”

Dimon says private equity giants are ‘dancing in the streets’ over tougher bank rules

A TD Cowen analyst views MicroStrategy as “an attractive vehicle for investors looking to gain bitcoin exposure." TD Cowen analyst Lance Vitanza, who initiated coverage on the Michael Saylor-led firm last Wednesday with an outperform rating, praised the company for its “hybrid corporate strategy.” MicroStrategy is known for converting all of its earnings from its core software intelligence business into bitcoin. This approach represents a “paradigm shift,” he wrote in a note to investors.

Bullish MicroStrategy Analysts Raise Price Targets Ahead of Q2 Earnings

Fitch Ratings cut the United States’ long-term foreign currency issuer default rating to AA+ from AAA. The agency had placed the country’s rating on negative watch in May, citing the debt ceiling fight in Washington. “The repeated debt-limit political standoffs and last-minute resolutions have eroded confidence in fiscal management,” Fitch said.

Fitch downgrades U.S. long-term rating to AA+ from AAA

Just a day after the Treasury Department released a $1 trillion borrowing estimate for the third quarter, questions are being raised about the extent to which foreign and domestic buyers can continue to keep up their demand for U.S. government debt. Further details about Treasury’s financing need will be released at 8:30 a.m. on Wednesday. For now, the $1 trillion estimate, the largest ever for the July-September period, has analysts concluding that the U.S. is facing a deteriorating fiscal deficit outlook and continuing pressure to borrow.

‘Eye-popping’ $1 trillion third-quarter borrowing need from U.S. Treasury raises risk of buyers’ fatigue 

Minneapolis Federal Reserve President Neel Kashkari favors getting tougher on regional banks, following a crisis earlier this year that he said may not be over. Asked during a town hall whether he agrees with proposals setting higher capital requirements for banks with more than $100 billion in assets, the central bank official said, “My own personal opinion is it doesn’t go far enough. I think it’s a step in the right direction, but I would like to go significantly further.”

Regional banks slide after Fed’s Kashkari advocates ‘significantly further’ capital regulation

Moody’s Investors Services may downgrade its credit ratings on six major U.S. banks, including U.S. Bancorp, State Street Corp., and Bank of New York Mellon Corp., and has downgraded its debt ratings on several small and mid-sized banks as part of the credit ratings agency’s rash of rating actions on U.S. banks late Monday.

Moody’s places credit ratings of 6 major U.S. banks on review for downgrade 

A Fitch Ratings analyst warned that the U.S. banking industry has inched closer to another source of turbulence — the risk of sweeping rating downgrades on dozens of U.S. banks that could even include the likes of JPMorgan Chase. The ratings agency cut its assessment of the industry’s health in June, a move that analyst Chris Wolfe said went largely unnoticed because it didn’t trigger downgrades on banks. But another one-notch downgrade of the industry’s score, to A+ from AA-, would force Fitch to reevaluate ratings on each of the more than 70 U.S. banks it covers, Wolfe told CNBC in an exclusive interview at the firm’s New York headquarters.

Fitch warns it may be forced to downgrade dozens of banks, including JPMorgan Chase

Guggenheim Investments, the asset-management arm of Guggenheim Partners, is seeking to raise at least $1.5 billion for its newest private credit fund, according to people with knowledge of the matter.

Guggenheim Targets $1.5 Billion for New Private Credit Fund

A group of investors led by Boaz Weinstein and other prominent hedge-fund managers has made an improved bid to buy Sculptor Capital Management Inc., which has already agreed to be bought by Rithm Capital Corp., the Wall Street Journal reported Sunday. In July, Sculptor said it had agreed to be acquired by Rithm Capital for $11.15 a share in a deal valued at about $639 million, a premium of 18% for the stock price at the time. Weinstein manages Saba Capital Management, and his group reportedly includes Bill Ackman, founder of Pershing Square Capital Management, and Marc Lasry, chief executive of Avenue Capital Group. 

Group of hedge-fund titans makes renewed bid to buy Sculptor Capital: report 

Goldman Sachs  said Monday that it agreed to sell its personal financial management unit to a competitor named Creative Planning. The transaction is expected to close in the fourth quarter of this year and “result in a gain” for New York-based Goldman. The bank declined to disclose the sale price for its PFM business. Goldman acquired a team of about 220 financial advisors managing $25 billion in assets in May 2019, when it announced the $750 million acquisition of United Capital Financial Partners. 

Goldman Sachs unloads another business acquired under CEO David Solomon

U.S. banking regulators on Tuesday unveiled plans to force regional banks to issue debt to protect depositors in the event of more failures. All American banks with at least $100 billion in assets would be subject to the new requirement, which makes them hold a layer of long-term debt to absorb losses in the event of a government seizure, according to a joint notice from the Treasury, Office of the Comptroller of the Currency, Federal Reserve and Federal Deposit Insurance Corporation.

Regulators unveil plans to force regional banks to raise debt in case of failure

The Bank of England’s losses on bonds bought to shore up the U.K. economy will be “materially higher than projected,” according to Deutsche Bank. In late July, the Bank of England estimated that it would require the U.K. Treasury to backstop £150 billion ($189 billion) of losses on its asset purchase facility.

The Bank of England is facing major losses on its bond purchases — and it’s set to get much worse

The biggest fintech news of the week centered around Better.com’s no good, very bad public market debut. Or as my friend and colleague Alex Wilhelm described it, Better.com had a Miserable.com week. To sum it up, digital mortgage lender Better.com made its public debut on August 24. To no one’s surprise, the stock wasn’t exactly a hit with public investors. In fact, it was a resounding bomb. As of Friday, August 25, the stock had closed a mere $1.19. Shares of SPAC partner, Aurora, were trading at $17.45 on Wednesday, before Better.com officially went public. This is a company that two years ago had planned to go public at a $7.7 billion valuation.

Better.com’s public market debut was Miserable.com

Subprime consumers are falling behind on their credit-card bills. From Generation Z and millennials to Generation X and baby boomers, credit-card delinquency rates have been trending upwards for four generations of borrowers since January 2020, reaching a new high in August, according to new data from VantageScore. Borrowers with a VantageScore between 300 and 600 across these four cohorts experienced an 8.9% delinquency rate — of 30 to 59 days — in July 2023, up from 7.49% a year earlier. Credit-card delinquency rates at smaller banks hit a record high of 7.51% in the second quarter of 2023, up from 6.01% at the same time last year, according to the Federal Reserve Bank. 

Is there a subprime credit-card crisis on the horizon? 

The collapse of Silicon Valley Bank and the US regional banking crisis that followed earlier this year had major economic and regulatory repercussions for lenders across the globe, some of which may be felt for years to come. But now that the more immediate threat of the crisis has dissipated, some clear winners have emerged. Shares of UBS (UBS) are up about 20% since it rescued Credit Suisse from collapse, and just last week the bank reported a $29 billion quarterly profit. The huge figure was almost entirely due to the discrepancy between Credit Suisse’s balance sheet value and the $3.8 billion that UBS paid to acquire the bank. JPMorgan Chase (JPM) shares, meanwhile, have gained more than 6% since it purchased First Republic Bank. 

How big banks won the banking crisis

U.S. banks collectively held more than $1.2 trillion in brokered deposits in the second quarter, according to a Wall Street Journal analysis of data from the Federal Deposit Insurance Corp. The total marked an 86% increase from a year earlier. Brokered deposits are what they sound like: A bank can go to a third-party broker such as Morgan Stanley or Fidelity to find customers to invest in the bank’s high-yielding certificates of deposit. That allows the bank to get big influxes of money at once, rather than customer by customer. Lots of banks are loading up on them—a sign of the distress that continues to afflict many lenders who now must compete for customer funds they long took for granted.  

Banks Load Up on $1.2 Trillion in Risky ‘Hot’ Deposits

Close to a third of all publicly-held, outstanding U.S. government debt is set to mature in the next 12 months, raising questions about where Treasury might go from there to finance the government’s borrowing needs. A total of $7.6 trillion will mature in the next year, approaching the level seen in early 2021. Concerns about Treasury’s increased issuance of T-bills and the potential for volatility or market disruptions emerged following the debt-ceiling fight in May, when angst over the government’s ability to pay all its bills pushed yields above 7% on debt maturing in early June. 

$7.6 trillion of publicly held U.S. government debt matures in next 12 months. What does the Treasury do next? 

The U.S. Federal Reserve launched FedNow in July, the first government real-time payment system in the U.S. The service allows banks and credit unions to transfer money for their customers instantly. Working alongside existing systems like Fedwire and FedACH, FedNow aims to improve the U.S.'s inter-bank and retail transaction infrastructure.

FedNow Has Launched As Blockchain Innovation Delivers Next-Gen Instant Payments

Marathon Asset Management, a leading global credit investment manager, today announced the final close for the third vintage of a closed-end asset-based lending fund with $1.7 billion of capital commitments.  As traditional lenders have downsized their lending programs, Marathon’s ABL strategy is designed to pursue compelling returns for clients by creating a diversified portfolio through sourcing, underwriting, and structuring attractive private investments that exhibit principal protection, robust asset coverage and predictable cashflows. , Marathon also intends to capitalize on the secondary loan market opportunities, as select undercapitalized financial institutions seek to improve their financial condition through asset sales.

Marathon Asset Management Closes $1.7 Billion Asset-Based Lending Fund

Even as the economy has surprised forecasters with its resilience, lenders have cut headcount or announced plans to do so, with the key exception being JPMorgan Chase. The next five largest U.S. banks cut a combined 20,000 positions so far this year, according to company filings. A key factor driving the cuts is that job-hopping in finance slowed drastically from earlier years, leaving banks with more people than they expected.

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