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New York Community Bank to buy bank with failed signature



NEW YORK (AP) — New York Community Bank has agreed to buy a significant stake in failed Signature Bank in a $2.7 billion deal, the Federal Deposit Insurance Corporation said. said at the end of Sunday.

Starting Monday, 40 branches of Signature Bank will become Flagstar Bank. Flagstar is one of the subsidiaries of New York Community Bank. The deal will include a $38.4 billion purchase of Signature Bank’s assets, just over a third of Signature’s total when the bank went bust a week ago.

The FDIC said the $60 billion in Signature Bank loans will remain in receivership and are expected to be sold on time.

The signature bank was second bank failed in this banking crisis, about 48 hours after the collapse of Silicon Valley Bank. New York-based Signature has been a major commercial lender in the tri-state region but has taken to cryptocurrencies as a potential growth business in recent years.

Since the bankruptcy of Silicon Valley Bank, savers have become concerned about the health of Signature Bank due to its large number of uninsured deposits, as well as its exposure to cryptocurrencies and other technology-focused lending. By the time it was shut down by regulators, Signature was the third-largest bank failure in U.S. history.

The FDIC says it expects Signature Bank’s failure to cost the deposit insurance fund $2.5 billion, but that figure could change as the regulator sells off assets. V deposit insurance fund paid by bank contributions, and taxpayers do not incur direct costs in the event of a bank failure.


Barney Frank was right about Signature Bank



A man walks past the Signature Bank in New York on March 20.


Sarah Enesel/Shutterstock

We never thought that we would write such a headline. But on Sunday, the Federal Deposit Insurance Corporation. announced that the New York Community BankX

Flagstar Bank to take over all Signature BankX

cash deposits, excluding deposits of crypto companies. This confirms Mr. Frank’s suspicions – and ours – that the confiscation of Signature was motivated by regulators’ hostile attitude towards cryptocurrency.

Mr. Frank said last week that regulators took over Signature, on whose board he served, “to send a message to distract people from cryptocurrencies.” Increasingly it seems that way. Reuters reported last week that the FDIC is requiring any purchaser of Signature to relinquish all crypto business at the bank, but the FDIC denies this.

But the agency said in a statement that “Flagstar Bank’s filing did not include approximately $4 billion in deposits related to the former Signature Bank’s digital asset banking business.” This means that crypto companies will have to find another bank to protect their deposits. Many say that government warnings to banks about doing business with crypto clients make this difficult.

CoinDesk reported last week that crypto firms are looking for offshore bank accounts such as FV Bank in Puerto Rico, Jewel Bank in Bermuda, and FTX-linked Tether and Deltec in the Bahamas. Moving dollar deposits of U.S. crypto companies and their offshore clients would make them less secure and potentially more vulnerable to money laundering.

In other words, regulators are undermining their ostensible goals. Their crackdown on cryptocurrencies will cost other banks and their customers. The FDIC states that it “estimates the damage from the failure of Signature Bank to its Deposit Insurance Fund at approximately $2.5 billion.” If Flagstar accepted crypto deposits, the insurance fund would not need to guarantee them.

As usual, financial regulators shoot first and make others pay later.

Wonderland: How is it that the US Treasury, the Federal Reserve and the Federal Deposit Insurance Corporation could be spooked by a premature bailout of all depositors after a social media hysteria? Images: Shutterstock/Zuma Press Composite: Mark Kelly

Copyright © 2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the March 21, 2023 print edition titled Barney Frank Was Right.

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Shares of UBS and other banks fell after the sale of Credit Suisse



Andrew is here. After the historic sale of Credit Suisse to UBS last weekend, the question is whether the 166-year-old bank will be the last domino to fall, or the first.

Just two weeks ago, Silicon Valley Bank, a medium-sized niche lender in California, went bankrupt. Now one of the most legendary firms in Europe has collapsed.

The connection between them is tangential, except for this: Markets around the world are in a panic. Any institution that has raised questions among investors (Credit Suisse has had problems for years) is now on the radar.

The probability of new transactions is high. And truth be told, they can’t come soon enough. If we’ve learned anything from the 2008 financial crisis, it’s that banks and regulators need to stay ahead of problems before they metastasize. After Bear Stearns was sold to JPMorgan Chase in March 2008, government officials began pushing Lehman Brothers to close the deal. But Lehman’s leadership and board refused for months—until it was too late.

Some regional banks around the country used one of the risky practices of the Silicon Valley bank: they bought long-term bonds with low interest rates, price has dropped now because interest rates have risen. The current chaos has less to do with the infection of one firm’s collapse than with embedded losses lurking on bank balance sheets. One study says that as much as another 190 creditors may fail.

First Republic, which has attracted potential fans like Morgan Stanley, must quickly sell itself or raise more capital after $30 billion in cash injections from big banks failed to power the markets. But its management still believes that it costs more than the market, and buyers believe that they could get it even cheaper.

A similar story is being played out in other regional banks. under pressure from the West Coast, including PacWest. And some potential buyers think that if they wait long enough, they can get financial assistance from the US government, or at least some guarantee of legal obligations. (The government has already $2.5 billion hit from the sale of Signature to the New York Community Bancorp.) But it’s unclear what the government has to offer, as many of the powers it exercised in 2008 were denied Dodd-Frank’s revision of banking rules.

The only good news is that the flight of uninsured deposits from many regional banks has, at least anecdotally, stopped or at least slowed down. (Clients reportedly pulled $70 billion out of the First Republic.) If this is true, then banks should go public and detail their position on deposits. This could help start rebuilding confidence in a sector that badly needs it.

Goldman Sachs is dropping its $100 a barrel oil price forecast. Bank analysts, who were particularly optimistic about oil prices, cited fear of a global recession and recent stock market volatility in downgrading their outlook. Global benchmark Brent crude has fallen nearly 20 percent over the past two weeks and is currently trading at around $70 a barrel.

Xi Jinping from China arrived in Moscow. The Chinese leader will meet with Russian President Vladimir Putin to discuss, among other things, Beijing’s proposal to end the war in Ukraine. Xi’s state visit highlights increasingly close ties with Russia as China faces growing tensions with the US and other Western countries.

French President Emmanuel Macron faces a vote of no confidence. France’s lower house of parliament is due to vote on two proposals to force Macron to raise the country’s retirement age to 64 from 62 without the right to vote. If even one passes, Macron’s cabinet will be forced to resign, throwing the Western power’s government into chaos at a critical moment.

TikTok influencers are heading to Washington. Video service content creators are set to lobby of american politicians over three days this week as part of a Chinese company’s efforts to stave off a US ban.

The merger of the largest banks in Switzerland and new agreed measure A quintet of major central banks, including the Fed, to inject liquidity into the global economy failed to restore calm to the markets.

From Tokyo to London, stocks, commodities and bond yields fell this morning, fueling fears that volatility in the banking sector will spill over into the wider economy.

UBS shares fell 15 percent in the first hour of trading in Zurich before recouping some of those losses., as investors massively dumped shares of banks. The Stoxx Europe 600 Banks and KBW Bank Index were both lower than they were at 6 am ET.

Uncertainty in the market calls into question the next step of the central banks. This week, the Fed and the Bank of England will announce a decision on interest rates. “The turmoil is reducing the likely peak in central bank rates on both sides of the Atlantic,” Holger Schmieding, chief economist at Berenberg Bank, wrote in a note to clients this morning. Berenberg predicts that the Fed will raise its key interest rate by 0.25% on Wednesday, rather than by half a percentage point as predicted a few weeks ago.

Other bank and market news:

  • Investment managers betting heavily on AT1 bonds, some of the riskiest bank bonds, including the Credit Suisse bonds that were wiped out in the UBS deal, preparing for staggering losses.

  • S&P Global is the latest rating agency lower the rank of the First Republic, suggesting that last week’s $30 billion capital injection may not be enough to support the firm. Its shares fell sharply in premarket trading.

  • Regulators may part The Silicon Valley Bank is again trying to sell it. And, FDIC there is a buyer for Signature Bridge Bench parts.

  • Warren Buffett reportedly been in contact with the Biden administration about possible investment in the beleaguered US regional banks. So far, the billionaire investor hasn’t written a check.

Swiss regulators may have hoped that pushing UBS to buy its ailing rival Credit Suisse would stem the tide of global banking panic. But investors weren’t convinced, and UBS shares fell on Monday amid growing concerns about the risk of a collision between the two Swiss banking giants.

Summary of what happened: Shares and bonds of Credit Suisse fell last week to record lows amid market fears about which bank will collapse next. Although Credit Suisse was much larger and better capitalized than Silicon Valley Bank, investors finally concluded that the Swiss bank could not recover from years of scandals and billions in losses.

But the Swiss government, determined to avoid a catastrophic collapse, pushed the reluctant UBS into action. Over the weekend, UBS agreed to buy Credit Suisse for a fraction of its market value.

One of the main consequences is the end of the investment bank Credit Suisse. The Swiss lender achieved global financial fame when he became a partner and then acquired the legendary American brokerage First Boston. (Think how many stellar alumni the company has produced, including Doug Brownstein, Larry Fink, Ray McGuire, Joe Perella, Frank Quattron, Gordon Rich, and Bruce Wasserstein.)

But his trading business has caused endless headaches for the past two decades, mortgage-backed securities to a $5.5 billion loss related to the bankrupt investment firm Archegos.

Credit Suisse intended to spin off its investment bank and revive the First Boston name, bringing in former Citigroup rainmaker Michael Klein to head the business. But UBS executives said Sunday they plan to actually wind it up instead.

UBS executives and investors appear to be concerned about the risks of the deal. One is the prospect of litigation: UBS leaders stressed Sunday that the Swiss government is responsible for controversial decisions such as destroying $17 billion in Credit Suisse bonds to ease the strain on UBS’s finances.

It also raises the question of how to look through Credit Suisse’s huge book of assets, including many of dubious value. UBS executives told analysts they have 25 billion Swiss francs ($27 billion) of fall protection from Swiss regulators against things like asset write-offs.

UBS Chairman Colm Kelleher is particularly aware of the risks involved in bailing out a bankrupt bank: As CFO of Morgan Stanley during the 2008 financial crisis — an experience he recounted on Sunday — he saw JPMorgan Chase buy Bear Stearns and Washington Mutual only in order to be bound by years of litigation and work with their distressed assets.

Washington’s role in trying to contain the fallout from the Silicon Valley Bank collapse has prompted calls for the Biden administration to take more action, as well as warnings that it has already done too much.

Mid-sized banks are calling for more help. Coalition of Small Regional Creditors asked the FDIC to insure all deposits for two years, and lawmakers have called for additional measures over the weekend. Senator Elizabeth Warren, a Democrat from Massachusetts, also wants the restriction to be lifted. House Financial Services Committee Chairman Patrick McHenry, Republican of North Carolina, said he was open to change but warned that removing the cover would cost “the financial system significantly”.

Did political connections matter above all else? Bank officials and the president say the emergency measures won’t cost taxpayers. But some argue that the Biden administration insured only Silicon Valley Bank and Signature Bank depositors because those companies had strong Democratic political ties and were based in New York and California.

Oklahoma Republican Senator James Lankford told Treasury Secretary Janet Yellen last week that the higher fees banks will have to pay after Silicon Valley Bank’s fall are likely to be passed on to customers. He also asked if the federal government would bail out small rural banks in his state that didn’t engage in the risky behavior that killed the California lender. This hinted at another big problem: Should there be new rules to determine if an institution is important enough to merit emergency assistance?

What’s next? On March 29, the House Financial Services Committee will hold a hearing on bank failures with the FDIC’s Martin Grunberg and the Fed’s Michael Barr to see how regulators have reacted.

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On post-Brexit Britain and the future of conservatism



The message of the end of austerity has certainly reached the Center for Policy Studies (CPS). On June 10, the CPS launched Post-Brexit Britain, a new collection of essays edited by George Freeman, written largely by his fellow 2010 MP recruiters. CPS rented the largest room at 1 George Street, a huge hall adorned with gilding and portraits of bearded Victorians, and treated guests not only to decent sandwiches, but also to champagne and scones with cream and strawberries. Several leadership candidates such as Sajid Javid and Dominic Raab made speeches. Penny Mordaunt cackled like a mother hen (I wonder if her decision not to run in this leadership election could prove that she is the most sensitive student in the class of 2010). Mr. Freeman loudly declared that his book gives the party “a new conservatism for a new generation” and the intellectual tools it needs to fight the resurgent far left.

His enthusiasm is infectious. But he asks too much. His book is more like a priest’s egg than a Viagra pill capable of resurrecting a flagging conservative philosophy, not to mention a hand grenade aimed at the headquarters of Corbinism. In his preface, Mr. Freeman rightly argues that the Conservative Party is facing a crisis of the same magnitude as it faced in 1848, 1901, and 1945. to the fact that Thatcherism offers no obvious solution to pressing problems like overcrowded suburban trains. Various participants are also addressing issues that conservatives have shied away from, such as the importance of devolution.

However, much of the book demonstrates how difficult it is for a party to get intellectual refueling while still in government. Matt Hancock’s head of health secretary is startlingly bad: predictable praise for technological innovation, devoid of interesting examples, and written in a string of clichés. (One well-read Tory quipped that the fact that the chapter was so bad proved that it was written by its supposed author and not by an assistant.) The book as a whole is noticeably free from detailed discussion of such topics as social assistance. (the issue that killed the party in the last election) or corporate reform. The Conservative Party as a whole will have to do more than that if it is to make a strong case against the resurgent far-left Labor Party.


Great cover pack this week New statesman to “Closing the Conservative Mind” (with the promise of more!). Robert Saunders argues that the Conservative Party has always been a party of ideas much more than it wants to pretend: its resurgence in the 1940s and especially in the 1980s was due to its willingness to embrace radical new thinking about the basic building blocks of society. . But now, instead of ideas, the party has nothing but the ideology of kamikaze (“Brexit or crash”) and empty faith in markets and technologies (see above). Theresa May was an idea-free zone (compare her to Lord Salisbury or Arthur Balfour). Boris Johnson, her almost certain successor, is no longer an intellectual, despite his ability to quote Latin tags. There are some interesting thinkers in the party, like Jesse Norman and Rory Stewart (both sadly old Etonians), but it’s much more the party of Gavin Williamson, a former fireplace salesman who boasts of a lack of interest in political theory. than a party of these eccentric “reading men”.

The job is well done. But can’t this apply equally well to liberal thinking or Labor thinking – or perhaps to Western thinking in general? The Blair-Cameron-Clinton liberalism that dominated politics in the 1990s and early 2000s has run its course. This liberalism was based on a simple formula: just add social liberalism to economic liberalism and you have the ingredients of a good society. More astute observers of politics have always known that this is too good to be true: Daniel Bell, in his book The Cultural Contradictions of Capitalism, demonstrated that social liberalism can destroy the moral capital that forms the basis of economic liberalism.

But over the past few years, we have learned that Mr. Bell rather underestimated the contradictions of his position. The biggest problems that most capitalist societies currently face stem from the extremes of both forms of liberalism. The excesses of economic liberalism have given us giant corporations that stifle competition and, in the case of Internet companies, develop a sinister form of surveillance capitalism. The excesses of social liberalism have given us various forms of social breakdown that can be seen in the most extreme manifestations in America: a record number of broken families; an epidemic of drugs, especially opioids; millions of men who have dropped out of the labor force and lead a life of petty crime and binge watching TV. It is unfair to blame only social liberalism for these problems. They have a lot to do with the destruction of manufacturing jobs and the legacy of slavery. But social liberalism clearly has something to do with it: loosening inhibitions on self-destructive behavior leads people to make decisions that, in the long run, may leave them either addicted to drugs or lacking the skills or self-discipline to become productive members of society. A prime example of the collapse of dual liberalism is San Francisco, where hundreds of homeless drug addicts live on the streets, and tech billionaires and would-be billionaires must dodge piles of human feces as they go to the latest sushi craze. compound.

And then there is Labor thinking. The Labor Party responded to the collapse of neoliberalism not by trying to create a new progressive synthesis, but by re-embracing one of the bloodiest ideologies of the 20th century. Jeremy Corbyn, the man who makes Theresa May look like an intellectual, has surrounded himself with hardline Marxists like Andrew Murray and Seamus Milne. pages of David Kot’s book “Companion Travelers”. John McDonnell, the Shadow Chancellor, is undoubtedly one of the smartest men in Parliament, inclined to reinforce his Trotskyism with ideas borrowed from other traditions, especially the cooperative one, and able to use new ideas (such as taking 10% of the shares into state ownership) for old purposes. But the fact that he is such an energetic walker should not hide from us the fact that he is going in the wrong direction and is trying to bring his country off the cliff. As long as this gang is in power, Labor’s mind is not so much closed as dead.


V New statesman the cover more or less coincides with the publication of George Will’s new great work, a 640-page study of conservatism called “Conservative Sensibility” (Mr. Will says he chose “sensibility” over “reason” because “reason” was already occupied by Russell Kirk). The “Conservative Sensibility” – a stream of philosophical reflection on the great American and European conservative traditions – is proof that at least one conservative mind is still open. Mr. Will still surpasses all his rivals in his ability to combine high thinking with a shrewd ability to understand everyday American politics. The reception of the book is also evidence that it was not only conservative minds that were closed: when, as a Princeton graduate, he recently approached a group of Princeton students, these privileged children decided to turn their backs on him for various unknown intellectual sins. But Mr. Will’s book also implicitly supports the thesis of closing the conservative mind: it’s hard to imagine any of today’s embittered young conservatives of the “movement” who would have lasted fifty years in journalism like Mr. Will, and still have enough strength. to, let’s say, release a big book at 78 years old.

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