No banks are safe (bail ins, FDIC limits, systemic risks)

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Contains a link to an 11-page pdf. Nothing too technical, easy read.

Michelle W Bowman: Tailoring, fidelity to the rule of law, and unintended consequences​

Thank you for the invitation to join you this evening at Harvard Law School. It is an honor and a pleasure to speak to this distinguished group. To kick off our conversation, I would like to frame the discussion by offering my views on a key element underpinning the U.S. bank regulatory framework: the role of tailoring. While the principle itself is simple - setting regulatory priorities and allocating supervisory resources in a risk-based way - the consequences of tailoring (or not) can reverberate throughout the banking system, the broader U.S. financial system, and the economy. I see a clear nexus between tailoring and fidelity to the law, including a targeted focus within our statutorily mandated prudential responsibilities.

Read the rest:

Michelle W Bowman: Tailoring, fidelity to the rule of law, and unintended consequences

Speech by Ms Michelle W Bowman, Member of the Board of Governors of the Federal Reserve System, at the Harvard Law School Faculty Club, Cambridge, Massachusetts, 5 March 2024.
www.bis.org
 
"Failures coming soon to a small to medium size bank near you! The big ones will be fine though, the problem manageable."
- Jerome Powell

In the Fed's eye, they've managed every problem they ever helped to create. Lol

Eight short minutes.

 

New York Community's new investors poised to own nearly 40% of the bank

The Long Island-based lender has released a number of new details about its reconfiguration following a $1 billion capital injection led by two former Trump administration officials.
www.americanbanker.com
 
From the link:

From revoking the American people’s right to a jury trial in matters involving Wall Street; to brazenly thumbing their nose at anti-trust law; to trading the stock of their own bank in the darkness of their own dark pools; to forming their own stock exchange; to committing serial felonies without being criminally prosecuted or having their bank charters revoked – Wall Street mega banks have drawn a law-free zone around themselves and are more dangerous today than they have ever been in U.S. history.

The most dangerous eras for the American people versus Wall Street mega banks have been the late 1920s and 1930s; 2007 to 2010; and today. We know that today is the most dangerous era because we read 12,000 pages produced by the Senate Banking Committee of the early 1930s on the Wall Street corruption in the late 20s and 30s; we read every government report produced on the causes of the crash of 2008 and its aftermath, as well as every important book on the subject; and we have personally chronicled at Wall Street On Parade the unprecedented corruption of the Wall Street mega banks since 2008.

One key factor stands out in our mind as to why today’s Wall Street mega bank era is so much more corrupt and dangerous than earlier times: the failure of mainstream media to do its job.

Wall Street Mega Banks Have Drawn a Law-Free Zone Around Themselves – The Media Is Complicit

By Pam Martens: March 13, 2024 ~ From revoking the American people’s right to a jury trial in matters involving Wall Street; to brazenly thumbing their
wallstreetonparade.com

 
Bill's Commentary:

"This should be no surprise, the game is rigged from top to bottom ...period!"

Wall Street Mega Banks Have Drawn a Law-Free Zone Around Themselves – The Media Is Complicit

From revoking the American people’s right to a jury trial in matters involving Wall Street; to brazenly thumbing their nose at anti-trust law; to trading the stock of their own bank in the darkness of their own dark pools; to forming their own stock exchange; to committing serial felonies without being criminally prosecuted or having their bank charters revoked – Wall Street mega banks have drawn a law-free zone around themselves and are more dangerous today than they have ever been in U.S. history.

Read more here...
 

Just my to cents here on this. And I'll answer with my own question. Democrat or Republican? The correct answer here is Republican. And not because Republicans are so wonderful, they aren't. But the reason they are the correct choice is because the Democrats are so F#@*^% UP. So yes Credit Unions are the better choice, if only that you'll have a better chance at recovering some of your $$ if the SHTF. Can you imagine trying to deal with the likes of Wells Fargo, B of A, Citibank, or Chase. I'll definitely take my chances with a Credit Union.
 
Almost a year ago, Credit Suisse, a globally systemic bank with $540 billion in assets and the second-largest Swiss lender, founded in 1856, failed and was sold to UBS. In the United States, Silicon Valley Bank, Signature Bank and First Republic Bank failed at around the same time amid Federal Reserve interest rate hikes to contain inflation. With a combined $440 billion of assets, these were the second, third, and fourth biggest bank resolutions since the Federal Deposit Insurance Corporation was created during the Great Depression.

This banking turmoil represented the most significant test since the global financial crisis of ending too-big-to-fail—whereby a systemic bank can be resolved while preserving financial stability and protecting taxpayers.

So, what’s the verdict? In short, while significant progress has been made, further work is required.

More Work is Needed to Make Big Banks Resolvable

Last year's turmoil showed that further progress is required in a number of areas to ensure banks aren’t too big to fail.
www.imf.org
 

Banks are in limbo without a crucial lifeline. Here’s where cracks may appear next​

  • The forces that consumed three regional lenders last March have left hundreds of smaller banks wounded, as merger activity — a key potential lifeline — has slowed to a trickle.
  • Klaros Group analyzed about 4,000 institutions and found 282 with both high levels of commercial real estate exposure and large unrealized losses from the rate surge — which may force these lenders to raise fresh capital or merge.
  • Behind the scenes, regulators have been prodding banks with confidential orders to improve capital levels and staffing, according to Klaros co-founder Brian Graham.
The forces that consumed three regional lenders in March 2023 have left hundreds of smaller banks wounded, as merger activity — a key potential lifeline — has slowed to a trickle.

As the memory of last year’s regional banking crisis begins to fade, it’s easy to believe the industry is in the clear. But the high interest rates that caused the collapse of Silicon Valley Bank and its peers in 2023 are still at play.

More:

 

I am going with the "be your own bank" option and leaving only enough in the account to pay bills.
 
CopperSilverGold said:
I am going with the "be your own bank" option and leaving only enough in the account to pay bills.
Click to expand...

I'm there too, but there's some exceptions. I've been my own bank for about 6 years now. BUT,.... I've got a fair sized amount of my money tied up in short term CD's that are paying decent returns. Both of them only have a couple of months left before them become liquid again. We'll see how things shake out over the next 2-3 months.
 

Worse case scenario is you can still cash out those CDs and just forfeit the interest earned, right? Been awhile since I had some ladder CDs set up.
 
CopperSilverGold said:
Worse case scenario is you can still cash out those CDs and just forfeit the interest earned, right? Been awhile since I had some ladder CDs set up.
Click to expand...
I believe that recent court rulings assert that bank depositors, of any nature, are merely unsecured creditors.

Back of the line, behind secured creditors.
 
Casey Jones said:
I believe that recent court rulings assert that bank depositors, of any nature, are merely unsecured creditors.

Back of the line, behind secured creditors.
Click to expand...

I have heard that as well. So many will get caught with their pants down and go from middle class to poor in an instant.
 
As with SVB, Silvergate, etc., the FDIC is the absolute last resort. They will try to force a sale to another bank in a deal that at least makes customers whole to the limit of the FDIC insurance. With the big 3 blow ups last year, the Fed/FDIC basically said they would insure all deposits at any amount (in an effort to avoid customer deposit flight to JPM). It's not the letter of the law though.
 
I remember when stock holders of Riverside Bank in Florida would strut around like nouveo redneck rich AHs around here because new construction was booming in 2005.

Then it crashed in 2006 and the bank went under. All those stock holders lost everything which is the natural order. Sometimes you need to let bad operators fail and wash out to have a better system.
 

Failed Bank Review - Citizens Bank​

The Federal Deposit Insurance Corporation Office of Inspector General has issued its memorandum on the Failed Bank Review |Citizens Bank | Sac City, Iowa.

On November 3, 2023, the Iowa Division of Banking (IDOB) closed Citizens Bank and appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. According to the FDIC’s Division of Finance, the estimated loss to the Deposit Insurance Fund (DIF) was $14.8 million or 23 percent of the bank’s $65 million in total assets. Following a period of supervisory actions by regulators, the IDOB took possession and closed Citizens Bank during an ongoing examination because FDIC and IDOB examiners found significant loan losses in the loan portfolio. These loan losses eroded the institution’s capital and earnings position and the bank had become insolvent.

More:

Failed Bank Review - Citizens Bank

www.fdicoig.gov
 
FDIC reminding folks about bail in plans I guess:

FDIC Chairman to Address ‘Too Big to Fail’ and the Orderly Resolution of a Global Banking Organization at the Peterson Institute of International Economics

content.govdelivery.com
 

FDIC Releases Comprehensive Report on Orderly Resolution of Global Systemically Important Banks​

WASHINGTON — The Federal Deposit Insurance Corporation (FDIC) today released a comprehensive report on how the FDIC would manage the orderly resolution of a large, complex financial company under Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).

In remarks to the Peterson Institute for International Economics in Washington, DC, FDIC Chairman Martin J. Gruenberg presented the Overview of Resolution Under Title II of the Dodd-Frank Act, the most detailed description to date of the FDIC’s preparedness to use its Title II resolution authority in a manner that promotes financial stability and prevents taxpayer bailouts.

More:

Press Release: FDIC Releases Comprehensive Report on Orderly Resolution of Global Systemically Important Banks

content.govdelivery.com
 
A little bit of insider info sent to Bravo. A banker sent him some data that said chargeoffs last Month were what usually happens in a Year. things are gonna go boom.

 

Skokie wire fraud victim wins lawsuit against Citibank over drained trust account​

It's been almost three years since a Skokie man had his Citibank account emptied by scammers. According to his lawsuit, $121,000, held in a trust account for his disabled sister, was fraudulently wired out of his account in a span of days. He said Citibank told him there was nothing they could do.

Now, a new lawsuit against Citibank out of New York is giving some fraud victims, including Scott Jacobson, fresh hope.

Since 2019, Jacobson has been his sister Laurie’s caretaker.

Laurie, 65, is living with advanced Alzheimer’s disease. The money for her care comes from a Citibank trust account set up by the Jacobsons parents before they died.

"We've never touched [Laurie’s] account at all. Never at all. Up until Oct. 14, [2021], when everything occurred,” said Jacobson last October, while recounting the events that led up to the fraud in our original report in November.

In early October 2021, Jacobson said he happened to check the trust account balance while visiting an ATM. That's when he said he saw that the $121,000 in Laurie's trust account was gone, drained by three fraudulent wire transfers to Thailand. He reported the fraud immediately but said Citibank told him there was nothing they could do.

More:

 
Back in my day, them banks were supposed to be pillars of trust and stability, but nowadays, they're just slicker than a greased pig at the county fair! They reel you in with promises of prosperity and security, but all they do is line their own pockets while the common folk suffer in economic misery!

They playin' with folks' hard-earned money like it's monopoly cash, takin' risks that make the stock market look like child's play. And when things go south, who's left holdin' the bag? Not them fat-cat bankers, oh no – it's us regular Joes strugglin' to make ends meet, feelin' the squeeze of their greed and incompetence!

They ain't lookin' out for the little guy no more, just chasin' profits and bonuses while the rest of us drown in a sea of economic misery. It's a dog-eat-dog world out there, and them banks got the biggest bite of all!
 
That was still part of the Con. Just earlier in the game. All to gain your trust to give them your money for little in return.
 
It looks like another finally bit the dust. This is one from almost a year ago but just now got officially raided. This smaller Philly bank with 32 branches took a good chunk of change... failure will cost the deposit insurance fund $667 million.

Bank Failures Begin Again: Philly's Republic First Seized By FDIC | ZeroHedge

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero
www.zerohedge.com

 
There's a silver stacking channel on YouTube (probably multiple actually) that say "be your own bank!" I have taken that to heart and leave just enough to cover bills. It's kind of funny when you see your balance is $4.05 but you're not worried.
 
Bank failure 2024 is just getting started. You should be fine Searcher.
The Deposit Insurance Fund balance was $121.8 billion at the end of 2023, up $4.8 billion since June 30 of that year, ...
Click to expand...

FDIC: Deposit Insurance Fund reserve ratio grew in second half of 2023

The Deposit Insurance Fund balance was $121.8 billion at the end of 2023, up $4.8 billion since June 30 of
bankingjournal.aba.com

There's still a bit of room before we're at a critical situation.
 
pmbug said:
You should be fine Searcher.
Click to expand...

Thanks, but not me. Elderly relative had safety deposit box with Univest. They split the local scene, and I was asked to transfer papers to new box. So it was Republic. lol

I asked him if he simply wanted me to keep them for him. He said "if your place burns down, I'll be s-o-l." Can't argue with that logic. lol
 
This was from a couple of weeks ago (and related to post #426):

FDIC Chief Says US Ready If Big Wall Street Bank Ever Failed - SWI swissinfo.ch

(Bloomberg) — The head of the Federal Deposit Insurance Corp. says the US would be prepared to handle any collapse of a major Wall Street bank. FDIC Chairman Martin Gruenberg on Wednesday laid out a blueprint for how regulators would deal with such a failure and seek to minimize costs. He...
www.swissinfo.ch
 

Why Hundreds Of U.S. Banks Are At Risk Of Failing​

May 1, 2024 #CNBC

Across the U.S., hundreds of small and regional banks are feeling stressed and may be at risk of failure. Of about 4,000 U.S. banks analyzed by the Klaros Group, 282 banks face stress from commercial real estate exposure and potential losses tied to higher interest rates. Most banks facing risks are categorized as small, or community, banks. Though the risk is less systemic compared to the Big Banks, community and regional banks are an important source of credit to local businesses and governments. “There’s no doubt in my mind there’s going to be more bank failures,” former chair of the U.S. Federal Deposit Insurance Corporation Sheila Bair told CNBC. Watch the video to learn more about the risk of commercial real estate, the role of interest rates on bank balance sheets and what it may take to relieve stress on banks — from regulation to mergers and acquisitions.

14:18

Chapters:
1:40 Chapter 1 - Stressed banks
4:56 Chapter 2 - Commercial real estate
6:21 Chapter 3 - ‘Unrealized’ losses
7:51 Chapter 4 - Rescuing banks
9:58 Chapter 5 - Regulation
11:57 Chapter 6 - Bank failures
 
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