Tag: JP Morgan (Page 1 of 3)

Morgan Stanley CEO Steps Down in Middle of Banking Meltdown

Market News Daily - Morgan Stanley CEO Steps Down in Middle of Banking Meltdown.
Market News Daily – Morgan Stanley CEO Steps Down in Middle of Banking Meltdown.

Morgan Stanley (NYSE:MS) CEO James Gorman said on Friday he plans to step down as CEO this year.

The bank’s board has narrowed its CEO search to three “very strong” internal candidates, Gorman said.

Morgan Stanley’s CEO candidates are the men leading the bank’s three main businesses: Ted Pick, Andy Saperstein and Dan Simkowitz, according to people with knowledge of the matter, per CNBC.

Gorman will still take on the executive chairman role “for a period of time” after stepping down as CEO, he said.

“The specific timing of the CEO transition has not been determined, but it is the board’s and my expectation that it will occur at some point in the next 12 months,” Gorman said.

“That is the current expectation in the absence of a major change in the external environment,” he continued.

Morgan Stanley’s CEO’s resignation comes after several banks have begun to experience turmoil in the banking sector.

After the collapse of Silicon Valley Bank and Signature Bank in March and First Republic Bank in April, a study on the fragility of the U.S. banking system found that 183 more banks are at risk of failure even if only half their uninsured depositors—those with deposits greater than $250,000—decide to withdraw their funds, USA Today reported

“If a ‘confidence crisis’ can happen to First Republic, it can happen to any bank in this country,” says Jake Dollarhide, Chief Executive Officer of Longbow Asset Management.

A run on these banks could pose a risk to even insured depositors—those with $250,000 or less in the bank—as the FDIC’s deposit insurance fund starts incurring losses, the economists wrote. 

Morgan Stanley Mentioned in List of Banks at Risk

Morgan Stanley banks at risk today.
Morgan Stanley – Banks at risk today.

Banks that have the most risk right now are:

  • First Republic Bank
  • Huntington Bancshares
  • KeyCorp
  • Comerica
  • Truist Financial
  • Cullen/Frost Bankers
  • Zions Bancorporation

The “Top 5” also have a big risk factor, though many have deemed these banks as “too big to fail”.

  • Bank of America
  • Citigroup
  • JPMorgan Chase
  • Morgan Stanley
  • Wells Fargo

Is people’s money safe in banks today?

“It’s not a problem unless your depositors decide it’s a problem and ask you for their money back, which is sort of what happened with Silicon Valley Bank,” said David Sacco, a finance professor at the University of New Haven. 

A case study of the recently failed Silicon Valley Bank (SVB) says that 10 percent of banks have larger unrecognized losses than those at SVB.

Nor was SVB the worst capitalized bank, with 10 percent of banks having lower capitalization than SVB.

“On the other hand, SVB had a disproportional share of uninsured funding: only 1 percent of banks had higher uninsured leverage.

Combined, losses and uninsured leverage provide incentives for an SVB uninsured depositor run.

We compute similar incentives for the sample of all U.S. banks.

Even if only half of uninsured depositors decide to withdraw, almost 190 banks with assets of $300 billion are at a potential risk of impairment, meaning that the mark-to-market value of their remaining assets after these withdrawals will be insufficient to repay all insured deposits,” said a report by SSRN.

Related: Wells Fargo Agrees to Pay $1 Billion in New Lawsuit

Yellen Tells Bank CEOs More Mergers May Be Necessary

Yellen Tells Bank CEOs More Mergers May Be Necessary - Janet Yellen on Banking Crisis - Banking News Today.
Janet Yellen on Banking Crisis – Banking News Today.

During Thursday’s meeting with the CEOs of large banks, Treasury Secretary Janet Yellen told executives that more bank mergers may be necessary as the industry continues to navigate through a crisis, two people familiar with the matter told CNN.

The worst banking crisis since 2008, marked by a series of bank failures, plunging stock prices and concern about the business model of regional and mid-size banks, has forced a regulatory rethink.

Regulators, of course, prefer corporate mergers where strong banks take over weaker ones over destabilizing bank failures.

“Consolidation is inevitable,” said Ed Mills, Washington policy analyst at Raymond James.

Earlier this month, regulators allowed JPMorgan Chase, the nation’s largest bank, to buy most of First Republic, the second-largest bank to fail in US history.

“What happened here is because a bank was under-regulated and started to fail, the federal government has helped JPMorgan Chase get even bigger,” Massachusetts Democratic Sen. Elizabeth Warren told CNN.

“It may look good today while everything’s flying high, but ultimately if one of those giant banks, JPMorgan Chase, starts to stumble, the American taxpayers are the ones who will be on the line.”

“This might be an environment in which we’re going to see more mergers, and you know, that’s something I think the regulators will be open to, if it occurs,” Yellen told Reuters.

Related: Bankers Want an Emergency Ban on Short Selling

Market News Published Daily

Banking News Today - Morgan Stanley CEO Steps Down in Middle of Banking Meltdown.
Banking News Today – Morgan Stanley CEO Steps Down in Middle of Banking Meltdown.

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SEC Scraps Vote for Hedge Fund Transparency Rule

SEC Scraps Vote for Hedge Fund Transparency Rule
Market News Daily: SEC scraps vote for hedge fund transparency rule.

(WSJ) The Securities and Exchange Commission scrapped plans to vote Wednesday on a rule that would have increased regulators’ visibility into financial risks at some hedge funds and private equity funds.

After scheduling the vote last week, the five-member commission “decided to take a little more time” on the rule, an SEC spokeswoman said.

She declined to comment on whether the cancellation owed to a lack of majority support from the commission, which is composed of three Democrats and two Republicans.

Several SEC commissioners could not immediately be reached for comment.

The rule, proposed early last year over Republican opposition, would have increased reporting requirements for filers of a confidential document called Form PF.

Among other proposed changes, it would have required large hedge funds to file reports within one business day of incidents such as extraordinary investment losses, defaults by major counterparties or spikes in margin requirements.

The rule sparked pushback from lobbyists for the hedge-fund and private-equity industries in Washington.

The Managed Funds Association, which represents hedge funds, urged the SEC last week to hold off on finalizing the rule until it was ready to adopt a separate Form PF proposal issued last August.

Who is the Managed Funds Association?

Who is the managed funds association?
Who is the managed funds association? Citadel’s Ken Griffin.

The Managed Funds Association, or MFA, is an association made up of a variety of hedge fund managers, including Citadel, Two Sigma, Point72, and Millennium Management.

That’s right, some of the industry’s biggest short sellers and the SEC just prolonged this transparency rule.

Citadel, Anchorage (defaulted), Millennium Management, and Bank of America are a few of the members who are or have been short on ‘meme stocks’ such as AMC Entertainment.

For years now, retail investors who were part of the events that occurred in 2021 have urged the SEC to enforce proper regulation from sneaky hedge funds and banks with overleveraged short positions.

The SEC has sparked excitement within the retail community when it’s announced proposals that would shed light on darker markets — however, trust has been severed as the regulator has only proved to be complicit to market injustices.

Dark pools, OTC trading, and naked shorting have suppressed retail’s favorite company stocks from rising on true demand.

Shorting has its purpose and is a useful tool to keep the markets balanced and in check.

Manipulative shorting on the other hand is what retail activists are fighting against — the un-American type that sinks businesses and disrupts innovation.

Northwest Biotherapeutics sued Citadel and other market makers for manipulating its stock price in December of 2022.

Ken Griffin’s Citadel chose to profit from the US cancer drug company through the means of short selling, a practice the hedge fund/market maker is notoriously known for.

Rather than allow the company to raise money for its treatments, hedge funds teamed up to profit from manipulated falling share prices.

But the lawsuit comes as no surprise to the retail community as Citadel has a long history of market manipulation.

Retail Investors Organize and Fight Back

Market News Daily: SEC Scraps Vote for Hedge Fund Transparency Rule.
Market News Daily: SEC Scraps Vote for Hedge Fund Transparency Rule.

‘We The Investors’ is taking Wall Street head on which means retail investors from around the world are now being represented in a way like never before for the first time in history.

More than 1,300 letters have been submitted to the SEC supporting rules proposed in December that represent the biggest changes to equities trading in nearly two decades, according to Reuters.

The collective of retail investors have joined ‘We The Investors’ led by Dave Lauer in efforts to combat Wall Street as a legitimate organization that sprouted from the events of the ‘meme stock’ frenzy in 2021.

Halts in AMC, GameStop, and other stocks during at the time angered many investors which led to the exposure of crime and market injustices on social media.

Retail investors have been pushing for market transparency ever since.

We The Investors has held two online meetings since December with SEC Chair Gary Gensler, who took questions directly from retail investors on the proposals, which include requiring most retail stock orders to be sent to auctions to boost competition.

Other proposed rules call for a new standard for brokers to demonstrate they’ve gotten the best execution for clients on transactions, as well as lower trading increments and access fees on exchanges, and stronger disclosure around retail order executions.

But Wall Street, including Ken Griffin’s Citadel is pushing back.

Related: “The Game is Rigged”, Says Ex-Citadel Data Scientist

Market News Published Daily

Market News Daily: SEC Scraps Vote for Hedge Fund Transparency Rule.

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Credit Suisse Was Bailed but Clients Keep Pulling Out Money

Market News Daily: Credit Suisse Bank News Today.
Market News Daily: Credit Suisse Bank News Today.

Credit Suisse is trying to lure investments from wealthy clients in Asia by offering higher deposit rates than its competitors, Reuters has reported citing people familiar with the development.

Sources said the offers are valid until the end of this quarter and only apply to new cash deposits, not to existing portfolios.

The Swiss National Bank and Finma, the top financial regulator in Switzerland, said Credit Suisse “meets the higher capital and liquidity requirements applicable to systemically important banks.”

The regulators didn’t provide details of what type of liquidity they would offer, but said they are in very close contact with the bank.

“If regulators do not handle the Credit Suisse situation well, this will send shock waves through the whole sector,” said Joost Beaumont, head of bank research at Dutch lender ABN Amro.

Credit Suisse has been the problem child of European banking for several years.

Repeated scandals and financial losses have hammered the 166-year-old bank, which combines a wealth-management business catering to the world’s elite rich with a Wall Street investment bank. 

The bank is classified as a “systemically important financial institution” under international banking rules created after the collapse of Lehman Brothers.

Such designations require the bank to hold higher amounts of capital and to maintain plans for an orderly unwinding of its operations in case it gets into trouble. 

Like Silicon Valley Bank, Credit Suisse has suffered large deposit outflows in recent quarters.

Some local units briefly breached regulatory liquidity coverage ratios last fall.

That means they weren’t holding enough easy-to-sell assets, such as bonds, to safely cover customer withdrawals.

Top 4 Wall Street Banks See Big Losses

Wall Street’s 4 top banks just had $55 billion wiped off their market value in a single day.

Four of America’s biggest banks lost a combined $55 billion of market value in a single day as financial stocks plunged.

US bank shares took a beating amid fears of contagion effects from the turmoil at Silicon Valley Bank and Silvergate.

 JPMorgan Chase, Bank of AmericaWells Fargo and Morgan Stanley – the four most valued US lenders – saw $55 billion wiped off their combined market capitalization last Thursday, Refinitiv data show.

JPMorgan, the biggest US bank, alone saw a $22 billion tumble in its market value as its stock slid 5.41% to $130.34.

Wall Street’s Bank of America lost $16.16 billion as its share price fell 6.20% to $30.54.

Wells Fargo and Morgan Stanley saw their market capitalization drop by $10.3 billion and $6.2 billion, respectively.

Among other major US banks, Goldman Sachs and Citi also witnessed significant declines in their share prices.

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Credit Suisse Warned Investors of Potential Losses in Q4 of 2022

Market News Daily: Credit Suisse Bank News Today.
Market News Daily: Credit Suisse Bank News Today.

The SEC released Credit Suisse’s 6-K filing where the bank warns investors of potential losses due to naked short covering, more on that below.

Credit Suisse (CS) took a massive hit of $4.09 billion in Q3 and hinted at occurring losses in an upturn in markets — something we saw at the start of 2023.

The bank proceeded to hire 20 banks for a $4 billion injection in effort to pivot from Q3’s disaster.

In a statement, the bank says, “Conversely, to the extent that we have sold assets that we do not own, or have net short positions, in any of those markets, an upturn in those markets could expose us to potentially significant losses as we attempt to cover our net short positions by acquiring assets in a rising market.

“Market fluctuations, downturns and volatility can adversely affect the fair value of our positions and our results of operations.

Adverse market or economic conditions or trends have caused, and in the future may cause, a significant decline in our net revenues and profitability.”

The closing of naked shorts this year would send affected securities soaring as buying momentum compounds.

Credit Suisse recently postponed publication of its annual report after a last-minute call from the United States Securities and Exchange Commission (SEC), which raised questions about its earlier financial statements.

The unusual intervention by the U.S regulator is the latest blow to Credit Suisse as it attempts to rebuild investor confidence after a series of scandals and setbacks that have sent its shares plunging and led clients to withdraw billions, per Reuters.

Market News Published Daily

Market News Daily: Credit Suisse Bank News Today.
Market News Daily: Credit Suisse Bank News Today.

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SVB Distributed Bonuses Hours Before Bank Collapsed

Banking News: SVB gave company-wide bonuses hours before it collapsed.
Banking News: SVB gave company-wide bonuses hours before it collapsed.

Silicon Valley Bank employees received their annual bonuses on Friday just hours before the government took control of the company, according to Fox Business.

The Santa Clara, California-based band collapsed last week and is now under the control of federal regulators.

SVB had been the 16th-largest bank in the U.S. prior to the bank run that led to its downfall.

The bank held a reputation as a go-to for a number of Silicon Valley industries and startups.

Y Combinator, an incubator startup that launched Airbnb, DoorDash and DropBox, regularly referred entrepreneurs to them.

SVB’s collapse was so quick that, hours before its closure, some industry analysts were hopeful that the bank was still a good investment.

The bank’s shares had fallen by 60% on Friday morning after a similar drop the day before. 

Anxious depositors rushed to withdraw their money over concern for the bank’s health, causing its collapse, which may serve as “an extinction-level event for startups,” according to Y Combinator CEO Garry Tan.

Entrepreneur and Dallas Mavericks owner Mark Cuban called for federal regulators to buy out the bank earlier on Friday.

“The Fed should IMMEDIATELY buy all the securities/debt the bank owns at near par, which should be enough to cover most deposits,” Cuban wrote as part of a lengthy Twitter chain last week. “Any losses paid for in equity and new debt from the new bank or whoever buys it. The Fed knew this was a risk. They should own it.” 

SVB traditionally processes annual bonuses on the second Friday of March, unnamed sources associated with the bank told CNBC.

The bonuses were reportedly for work completed in 2022.

Banking News: Wall Street Banks Face Distress

Silicon Valley Bank (SVB) isn’t the only bank experiencing serious distress.

Wall Street banks lost $55 billion in just one day last week.

Four of America’s biggest banks lost a combined $55 billion of market value in a single day as financial stocks plunged.

US bank shares took a beating Thursday amid fears of contagion effects from the turmoil at Silicon Valley Bank and Silvergate.

JPMorgan saw the biggest tumble in market value among US lenders, losing $22 billion. 

(Markets Insider) JPMorgan Chase, Bank of AmericaWells Fargo and Morgan Stanley – the four most valued US lenders – saw $55 billion wiped off their combined market capitalization on Thursday, Refinitiv data show.

JPMorgan, the biggest US bank, alone saw a $22 billion tumble in its market value as its stock slid 5.41% to $130.34.

Wall Street’s Bank of America lost $16.16 billion as its share price fell 6.20% to $30.54.

Wells Fargo and Morgan Stanley saw their market capitalization drop by $10.3 billion and $6.2 billion, respectively.

Credit Suisse Bank Sees Billions in Withdraws

Credit Suisse (NYSE:CS) clients have withdrawn billions of dollars in the past several months.

In November, the bank warned investors in a 6-K filing of potential losses due to naked short covering, which as scared investors from losing most if not all of their money.

Credit Suisse also took a massive hit of $4.09 billion in Q3 and hinted at occurring losses in an upturn in markets.

This has fueled widespread withdraws from the bank leading it to borrow money.

The bank hired 20 banks for a $4 billion injection in effort to pivot from Q3’s disaster.

Credit Suisse has postponed publication of its annual report after a last-minute call from the United States Securities and Exchange Commission (SEC), which raised questions about its earlier financial statements.

The unusual intervention by the U.S regulator is the latest blow to Credit Suisse as it attempts to rebuild investor confidence after a series of scandals and setbacks that have sent its shares plunging and led clients to withdraw billions.

Market News Published Daily

Banking News: SVB gave company-wide bonuses hours before it collapsed.
Banking News: SVB gave company-wide bonuses hours before it collapsed | SVB News.

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