Tag: Wells Fargo News

SVB Distributed Bonuses Hours Before Bank Collapsed

March 13, 2023 /
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 America, Wells 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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Wall Street Banks Lost $55 Billion in Just One Day

March 13, 2023 /
Market News Daily - Wall Street Banks lost $55 billion in just one day.
Market News Daily – Wall Street Banks lost $55 billion in just one day.

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 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 America, Wells 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.

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

Credit Suisse Clients Withdraw Billions

Credit Suisse News Today - Wall Street Banks lost $55 billion in just one day.
Credit Suisse News Today – Wall Street Banks lost $55 billion in just one day.

Credit Suisse (NYSE:CS) clients have withdrawn billions of dollars.

In November, the bank warned investors in a 6-K filing of potential losses due to naked short covering.

Disarming these types of overleveraged positions won’t be easy.

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

Now Credit Suisse as postponed publication of its annual report, per Reuters — more on that below.

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

Is Credit Suisse on the verge of collapsing?

(Reuters) 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.

Credit Suisse shares were close to their all-time low in Zurich on Thursday but later recovered much of a 6% loss.

Swiss financial regulator Finma told Reuters that Credit Suisse had informed it of the delayed publication.

“We are in contact with the bank,” Finma said.

What is Happening with Banks Right Now?

SVB Bank News Today - Wall Street Banks lost $55 billion in just one day.
SVB Bank News Today – Wall Street Banks lost $55 billion in just one day.

Banks are losing billions in liquidity leading many to believe a financial collapse is imminent.

In February, Credit Suisse reported that 2022 brought its biggest annual loss since the 2008 global financial crisis after rattled clients pulled funds from the bank, and it warned that a further “substantial” loss would come this year.

Among a string of scandals, Credit Suisse was hard hit by the collapse of U.S. investment firm Archegos in 2021 as well as the freezing of billions of supply chain finance funds linked to insolvent British financier Greensill.

Investors have been speculating that Credit Suisse will be the next bank to default — time will certainly tell.

“SVB collapse is the second-largest bank failure in US history”, says CNN.

Startup investors have shared their concerns on Twitter in regard to capital being held by the banks.

Many are urging one another not to use a bank at the moment, speculating that this is a sector-wide issue.

Market News Published Daily

Market News Today - Wall Street Banks Lost $55 Billion in Just One Day.
Market News Today – Wall Street Banks Lost $55 Billion in Just One Day.

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Wells Fargo Fined $3.7 Billion in Widespread Illegal Activities

December 20, 2022 /
Market News: Wells Fargo fined $3.7 billion in widespread illegal activities.
Business News: Wells Fargo fined $3.7 billion in widespread illegal activities.

[ZeroHedge] Wells Fargo has been ordered to pay $3.7 billion by the Consumer Financial Protection Bureau (CFPB) for a variety of illegal activity, including wrongfully foreclosing on homes, illegally repossessing vehicles, incorrectly assessing fees and interest, and charging surprise overdraft fees.

The settlement, which includes the largest fine ever imposed by the Consumer Financial Protection Bureau, allows the bank to resolve claims that it had harmed millions of consumers since 2011.

Wells Fargo’s yearslong mistreatment of its customers has resulted in another record-breaking fine and a warning that more restrictions on its ability to do business could soon follow, per The New York Times.

On Tuesday, the bank agreed to pay $1.7 billion in penalties and another $2 billion in damages to settle claims that it engaged in an array of banking violations over the last decade that harmed millions of consumers, the Consumer Financial Protection Bureau said.

The latest developments contribute to a picture, years in the making, of Wells Fargo as one of America’s worst-run big banks.

For decades, the 170-year-old bank has struggled to fix its practices despite run-ins with regulators, even as employees and customers continued to identify new problems.

The consumer protection bureau said Wells Fargo did not record customer payments on home and auto loans properly, wrongfully repossessed some borrowers’ cars and homes and charged overdraft fees even when customers had enough money to cover purchases they made with their bank cards.

Wells Fargo stopped the conduct this year as part of a larger effort to clean up other unlawful practices stretching back to 2011, the filing said.

Wells Fargo Criticism

Wells Fargo News Today.
Wells Fargo News Today.

The fine is the largest ever imposed by the regulator, breaking a previous record of $1 billion, also set by an action against Wells Fargo.

It brings the total penalties the government has levied against the bank for mistreating customers and investors to $6.2 billion since 2016 and almost $20 billion since the financial crisis.

The settlement is the latest development in a series of a crises that led to the ouster of two of the bank’s previous chief executives, John G. Stumpf in 2016 and Timothy Sloan in 2019.

Mr. Sloan took the top post to help clean up the bank’s reputation, which was reeling from self-inflicted scandals, but he became a lightning rod for criticism and was replaced after three years on the job by Charles W. Scharf.

The consumer protection bureau’s director, Rohit Chopra, told reporters on Tuesday that the action against the bank “should not be read as a sign that Wells Fargo has moved past its longstanding problems or that the C.F.P.B.’s work here is done.”

As part of its settlement with the regulator, Wells Fargo has begun repaying customers, returning improperly charged fees and offering some financial relief to those whose finances and credit ratings were hurt by the bank’s practices.

Related: Bank of America Expects a Recession by Q1 of 2023

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Source(s): ZeroHedge, The New York Times

Latest Market News

Bank of America Expects a Recession by Q1 of 2023

December 9, 2022 /
Market News: Bank of America and Wells Fargo CEO expect a recession in 2023.
Market News: Bank of America and Wells Fargo CEO expect a recession in 2023.

Bank of America is expecting a recession to hit the U.S by the first quarter of 2023.

There is a major slowdown happening says CEO Brian Moynihan.

Economists are now expecting a volatile market to persist in 2023.

A recession may be coming in the first quarter of 2023, according to forecasts by Bank of America (BofA) economists.

“A recession is very likely in the U.S.,” BoFa wrote in its Year Ahead 2023 report. The bank points out that this recession can last through the third quarter of 2023.

There’s no official definition of a recession, but many economists define it as a period of two consecutive quarters of negative economic growth or gross domestic product (GDP) decline – a drop that’s already been seen in 2022, says FOX Business.

But many Americans already believe the U.S. is already in a recession.

More than half or 56% of Americans believe the country is in a recession, according to a recent poll by YouGovAmerica and The Economist. 

Here’s the latest market news.

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Major Slowdown in Economy Points Towards a Recession

Recession News: Bank of America expects a recession in 2023.
Recession News: Bank of America expects a recession in 2023.

While retail payments surged 11% so far this year to nearly $4 trillion, that increase obscures a slowdown that began in recent weeks: November spending rose just 5%, Bank of America’s CEO Brian Moynihan said.

Even Wells Fargo CEO Charlie Scharf is saying, “there is a slowdown happening, there is no question about it. We are expecting a fairly weak economy throughout the entire year.”

American consumers are tapping the brakes on spending as the Federal Reserve’s interest rate increases reverberate throughout the economy, according to the CEOs of two of the largest American banks.

After two years of pandemic-fueled, double-digit growth in Bank of America card volume, the rate of growth is slowing.

Still, the downturn isn’t being felt equally across all retail customers and businesses, Wells Fargo’s CEO said.

Both Wells Fargo and Bank of America CEOs expect a recession by Q1 of 2023 and expect some sort of light at the end of the tunnel by Q4.

The implications of a recession end up affecting majority of the U.S. economy as corporations and businesses struggle to yield market capital in slow-growth conditions.

Wages are affected, unemployment skyrockets, and the banks get left with massive debt when Americans can no longer afford to pay their credit card bills or mortgages.

Do you think we will officially enter a recession in the beginning of 2023?

Leave your thoughts below.

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Source(s): FOX Business, CNBC.

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