Russian Market

2023-05-02 09:01:01 US may risk debt default 'as early as June 1,' says Yellen

The United States could risk a debt default as soon aas early as early June, Treasury Secretary Janet Yellen said Monday, as policymakers tussle over raising the borrowing limit.

Last week, US House Republicans voted to raise the national borrowing limit with drastic cuts as they seek to confront President Joe Biden over "excessive" spending.

Earlier in January, the US hit its $31.4 trillion borrowing limit, but the Treasury Department adopted extraordinary measures that allow it to continue funding government operations.

If the debt ceiling is not raised or suspended by Congress before available tools are exhausted, the government risks defaulting on payment obligations, with profound implications for the economy.

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2023-05-01 22:01:44 US could expand business deposit insurance after bank failures

The Federal Deposit Insurance Corporation wants a major overhaul of deposit insurance after recent bank failures devastated the cash pool the government uses to protect lenders' clients, Bloomberg reported.

To ensure financial stability, the top US regulator has proposed moving to a "targeted coverage" approach, where business accounts get more coverage than the current $250,000 cap. Yet such a change would require congressional action.

Other options include maintaining coverage as is, or switching to cover all deposits, the FDIC said.

Earlier, Senator Elizabeth Warren and other critics of the banking system called for the FDIC to increase the insurance cap.

A separate debate has erupted over who should replenish the Deposit Insurance Fund, known as the DIF, after it was used to cover uninsured depositors of failed banks.

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2023-05-01 20:15:27 Biggest retail bank failures since 2007/2008 financial crisis:

– HBOS (United Kingdom): September 17, 2008 — £690 billion (~$866 billion)

– Washington Mutual (United States): September 19, 2008 — $307 billion

– First Republic Bank (United States): May 1, 2023 — $229 billion

– Silicon Valley Bank (United States): March 10, 2023 — $189 billion

– Signature Bank (United States): March 12, 2023 — $110 billion

– Sachsen LB (Germany): August 26, 2007 — €67 billion (~$74 billion)

– Bradford & Bingley (United Kingdom): September 9, 2008 — £35 billion (~$44 billion)

– IndyMac (United States): July 11, 2008 — $32 billion

Stay tuned… more to come!

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2023-05-01 19:00:05 US Supreme Court could curb authority of SEC and CFTC

The US Supreme Court has agreed to consider abolishing a legal doctrine that gave agencies wide latitude to define their own powers, Bloomberg reported.

The new Supreme Court decision to overturn the 1984 Chevron vs Natural Resources Defense Council ruling could strip agencies such as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) of their final say in matters where there is no reasonable justification or clarity in the law.

This could potentially limit the authority of the two agencies to regulate the crypto market, which since January have initiated numerous enforcement actions against crypto businesses, including crypto exchanges Binance, Coinbase and Kraken.

Reacting on the development, John Deaton, the attorney representing over 70,000 XRP token holders in the SEC lawsuit, said this move by the top court could be something huge for the crypto market.

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2023-05-01 17:00:13 Georgia not granted EU candidate due to not joining anti-Russian sanctions, mayor says

Georgia did not receive EU candidate status because the country did not join sanctions imposed on Russia, said the mayor of the country's capital, Tbilisi, Kakha Kaladze.

He noted that it was a political decision, and the public understood quite well why this happened.

According to Kaladze, the Georgian government poses a problem for the EU because it does not join the sanctions and does not start a war, opening a "second front" in the country.

Earlier, the country's authorities said they would not impose sanctions against Russia, as this is contrary to their national interests.

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2023-05-01 15:30:46 First Republic becomes second-largest bankrupt in US history

First Republic Bank in a little over a month ousted Silicon Valley to become the second-largest bank failure in US history.

Among the biggest US bank failures this century, three have occurred in the past few weeks: Silicon Valley Bank and Signature Bank collapsed in mid-March and First Republic last week.

As of April 13, First Republic had $229 billion in assets, right behind Washington Mutual, which imploded in 2008 with $307 billion in assets and $188 billion in total deposits. At the time, the FDIC seized the troubled bank and sold it to JPMorgan for $1.9 billion.

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2023-04-29 07:30:35 JPMorgan, PNC Financial eye First Republic buyout after FDIC takeover

Banking giant JPMorgan Chase as well as PNC Financial Services Group are bidding to buy First Republic Bank in a deal following the troubled lender's seizure by the government, Wall Street Journal reported.

A seizure and sale of San Francisco-based First Republic could come as soon as this weekend, the newspaper reported citing people familiar with the matter.

If the bank falls into receivership, it would be the third US bank after Silicon Valley Bank and Signature Bank to collapse since last month.

First Republic Bank's shares fell nearly 50% in extended trading on Friday amid a takeover by the US banking regulator. The bank's shares have nosedived 97% so far this year.

A group of 11 banks deposited $30 billion to First Republic earlier in March to give it time to find a solution. Among them were JPMorgan, Citigroup, Bank of America, Wells Fargo, Goldman Sachs and Morgan Stanley.

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2023-04-28 22:30:43 China to build $58 billion railroad to Pakistan

China will build a rail network connecting the country to Pakistan, reducing China's dependence on trade with the West, the South China Morning Post reported.

A 3,000-kilometer railway from China's Xinjiang autonomous region to the Pakistani port of Gwadar on the Arabian Sea would cost $58 billion and China would have to bear the lion's share of the cost, but a feasibility study said it would be worth it.

The railroad would reduce China's dependence on the Strait of Malacca and would be an element of the China-Pakistan Economic Corridor and one of the largest and most challenging Belt and Road transport projects.

The line is planned to connect with the Iranian and Turkish networks to provide shortcuts to Europe for Chinese goods, while Pakistan's economy would benefit from modern infrastructure and easier trade with China.

Yet building it would entail risks, as it would cross mountainous terrain and politically volatile regions.

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2023-04-28 18:45:06 First Republic shares plunge to record low, trading halted

First Republic Bank shares were halted after dropping as much as 46% to a fresh all-time low of $3.33 following reports that the most likely outcome of rescue talks is for the Federal Deposit Insurance Corporation to take the lender into receivership.

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2023-04-28 18:01:41 Open / Comment