Podcast Summary
Costs for big banks amidst ongoing banking crisis: The FDIC may require more funds from banks, acknowledging potential burdens from the banking crisis, while some believe the US banking system isn't in a crisis.
The ongoing developments in the banking crisis may result in significant costs for the big banks, with the FDIC looking to top up its insurance fund, potentially placing a larger burden on these institutions. Meanwhile, there are growing acknowledgements that regulators could have done more to intervene when signs of trouble emerged. Despite this, a prominent figure on Wall Street, Steve Schwarzman of Blackstone, maintains that the US banking system is not in a conventional crisis. The future of AI adoption, including which companies will dominate and where risks lie, will be discussed at the Bloomberg Tech conference in San Francisco on May 9th. Stay tuned for more updates on these developing stories.
Global economic instability and geopolitical tensions persist: The aftermath of the pandemic and technology are contributing to economic instability and geopolitical tensions. The Fed plans more interest rate hikes, China promotes itself as an economic anchor, and the US reevaluates bank deposit limits. Russia detains an American journalist, Taiwan's president visits New York, and multilateralism is called for in Asia.
The economic instability and geopolitical tensions are continuing to make headlines around the world. Schwartzman believes the turmoil is due to the aftermath of the pandemic and technology, while the Fed is indicating more interest rate hikes. Chinese Premier Liqiang is promoting China as an economic anchor and peacekeeper, but the US is reevaluating limits on federally insured bank deposits. In Asia, Liqiang called for multilateralism and opposed colonization. Russia has detained American journalist Evan Gershkovits on espionage charges, and a New York grand jury investigating Donald Trump's role in an alleged hush money payment is taking a break. Taiwan's president made a stopover in New York, potentially escalating tensions between the US and China. The global economy and geopolitical landscape remain uncertain and complex.
Tensions between US and China escalate, Manhattan population rises, and tragic events occur: Relations between the US and China worsen, Manhattan's population grows, and there are instances of violence and health concerns in New York City and Washington
Tensions between Beijing and Washington are escalating, as Beijing views a high-level US visit as having a severe impact on their relationship. Meanwhile, in New York City, Manhattan's population is on the rise, while the other boroughs are experiencing population loss. Elsewhere, there have been tragic events, including a school shooting in Nashville that left six people dead, and Pope Francis' hospitalization due to a lung infection. In Washington, there have been heated exchanges between Democratic and Republican lawmakers regarding gun violence. The NYPD is increasing security measures for Passover celebrations in the city, while monitoring online activity for potential threats. The Knicks secured a win against the Heat but suffered an injury to Julius Randle, who is awaiting test results.
Nets' win led by Johnson and Bridges, Durant returns home: The Nets secured a win with standout performances from Cam Johnson and Michell Bridges, while Kevin Durant made his first home appearance in Phoenix despite a subpar shooting night. The NBA playoffs brought an end to the Kings' longest drought since 2006, and baseball's opening day introduced new rules like the end of shifting and a pitch clock.
The Nets' victory over the Lakers was led by Cam Johnson and Michell Bridges, while Kevin Durant returned for his first home game in Phoenix despite shooting poorly. The NBA playoffs saw the Kings end their longest drought since 2006, and baseball's opening day brought changes such as the end of shifting and the implementation of a pitch clock. Meanwhile, the FDIC may seek to recoup losses from the banking crisis by imposing a special assessment on larger banks, rather than smaller community banks. This approach aims to avoid further straining the smaller banks, which have already faced significant pressure. The FDIC has the discretion to decide how to raise funds for its insurance fund and is under political pressure to avoid adding to the burden on community banks.
Considering a Special Assessment for Larger Banks to Replenish Deposit Insurance Fund: The FDIC is considering a special assessment on larger banks to replenish the deposit insurance fund, potentially addressing the perceived two-tiered banking system and levelling the playing field.
The FDIC is considering a special assessment to replenish its deposit insurance fund, potentially targeting larger banks due to their current financial stability. This could be seen as an attempt to address the perceived two-tiered banking system in the US, where implicitly backed too-big-to-fail banks and smaller community banks face different treatment. The FDIC had full discretion in the past on how to raise funds, and larger banks were the risky ones during the 2009 financial crisis. Now, the FDIC aims to charge larger banks more due to their financial strength, while potentially leaving smaller banks with less of the burden. The risk for larger banks is that they may face increased strain if tasked with returning close to $23 billion. However, these banks have the ability to park excess deposits at the Fed for a decent return. The FDIC, Treasury, and Fed are aware of the potential impact on larger banks from deposit flight to smaller institutions. Historically, the FDIC's 2009 assessment was not as large as the current hit to the insurance fund, as insuring depositors was not the primary issue during the 2008 financial crisis. Overall, this potential special assessment could help even the playing field between different tiers of banks, but it remains to be seen how unusual it would be for the FDIC to specifically target larger banks.
JPMorgan's $600 billion charge in 2009: In 2009, JPMorgan faced a significant financial hit due to a $600 billion charge, impacting their bottom line. Listen to Bloomberg Daybreak Today for the latest financial news and register for their May 7th event, The Future Investor, to explore data's role in investment decisions.
In 2009, JPMorgan faced a significant financial hit when the FDIC charged them $600 billion for a fundraising effort, which negatively impacted their bottom line at the time. This information was discussed on Bloomberg Daybreak Today, a news program that covers stories from Wall Street. Listeners can tune in live each morning starting at 5 AM Wall Street time on various radio stations or through various apps and websites. Additionally, Bloomberg is hosting an event in San Francisco on May 7th, the Future Investor, where the role of data in investment decisions and the creation of innovative enterprises will be explored. This event is sponsored by Invesco QQQ and registration can be done on BloombergLive.com/futureinvestor/radio.
