Banking Crisis 2023

Goldman Sachs told Sen. Elizabeth Warren, D-Mass., that it made $60 million on the purchase and sale of part of Silicon Valley Bank's loan portfolio.

Banks locked in funding by offering more enticing rates on certificates of deposit last quarter, but rebuilding liquidity came at a cost. Competition isn't dying down either, with a couple of credit unions floating 6% CD rates.

Dream First Bank of Syracuse, Kan. is assuming all deposits and most of the assets of Heartland Tri-State Bank of Elkhart, Kan. following a purchase and assumption agreement with the Federal Deposit Insurance Corp., representing a $54.2 million hit to the Deposit Insurance Fund.

The Federal Deposit Insurance Corp. this week launched the sale of an $18.5 billion loan portfolio from the failed bank, a pool of debt tied to major private equity and investing firms. 

 The advance has helped the group pare its declines this year to roughly 10%, easing an earlier drop of as much as 33% following a string of regional bank collapses, including Silicon Valley Bank in March. 

Centerbridge Partners and Warburg Pincus said they would invest $400 million in Banc of California in conjunction with its purchase of PacWest. The private equity injection was made possible through reverse accounting, which used Banc of California's balance sheet to value the transaction.

Federal Reserve Board Gov. Phillip Jefferson joined three other board members in supporting a notice of proposed rulemaking, but expressed concerns about the economic impact of the changes.

The two Trump-appointed governors expressed skepticism that the increased capital requirements for regional banks were necessary to keep the banking sector resilient.

The FDIC proposed raising capital requirements for banks with $100 billion or more in total assets gradually over the next five years. Republican appointees on the board opposed the rule as excessive and impetuous.

Following the difficulties of Silicon Valley Bank and Signature Bank this spring, banks are approaching the emergency lending facility more proactively, the Federal Reserve chair said.

Post-merger Banc of California will target "in-market relationship banking" by focusing on treasury management services and loan growth to boost "low-cost" commercial deposits, CEO Jared Wolff said.

Federal Deposit Insurance Corp. sales from the portfolios of failed Silicon Valley Bank and Signature could be complete by September, according to a report published Tuesday by FHN Financial.

Concluding the industry faces years of upheaval, BlackRock is poised to become a bigger buyer of assets that banks unload to improve their capital and liquidity.

Former Federal Reserve Vice Chair for Supervision Randal Quarles criticized his successor's plan to significantly increase capital requirements for big banks, saying it would needlessly hurt the economy.

For now, worries about more bank failures have faded. But in the wake of the recent industry turmoil, higher funding costs are expected to weigh on banks' second-quarter results.

JPMorgan Chase hired Silicon Valley Bank veteran John China to co-lead the business of banking venture capitalists and startups, part of the firm's growth strategy for the sector.

The biggest of the big banks don't like the Federal Reserve's new vision for bank capital, but the changes will hurt their regional peers more. Once again, the advantage lies with the megabanks.

House Oversight Committee chair James Comer, R-Ky., and financial services subcommittee chair Lisa McClain, R-Mich., asked Federal Reserve chair Jerome Powell for more information to aid their investigation into the failure of Silicon Valley Bank in March.

The FDIC's New York regional office faced staffing shortages throughout its supervision of now-failed Signature Bank. Experts say more competitive wages, culture shifts and whistleblower protections could help regulators attract and retain talent and improve oversight.

Dan Kimerling, whose former company Standard Treasury was acquired by Silicon Valley Bank in 2015, shares his thoughts on what led to the bank's collapse, whether there will be a chilling effect on tech lending and if there is a future for niche banks.