Banks call for backup to keep your hard-earned money safe

Published

2 years ago

March 21, 2023

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close video Banking crisis is absolutely stabilizing: Sonenshine

Barron’s markets reporter Jacob Sonenshine discusses whether the banking sector is on the brink of a 2008-style bailout on “Varney & Co.”

Mid-sized regional banks and their community banking counterparts around the country are calling on the Federal Deposit Insurance Corporation (FDIC) to insure all bank deposits to prevent bank runs like those that toppled Silicon Valley Bank and Signature Bank.

The FDIC ordinarily insures deposits up to a cap of $250,000 per depositor, which leaves balances in excess of that being vulnerable in the event of a bank failure. In response to the recent collapse of Silicon Valley Bank and Signature Bank, federal regulators granted systemic risk exceptions and guaranteed all deposits at those banks – including those that would typically be uninsured.

However, the Treasury Department has signaled that regulators aren’t planning to backstop uninsured deposits at banks that aren’t granted systemic risk exceptions. The uncertainty created by the bank failures along with federal regulators’ response has prompted some customers of mid-sized and community banks to withdraw funds from smaller banks and move them to larger, systemically important banks considered "too big to fail" – a dynamic that could worsen if additional banks fail.

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Mid-sized regional and community banks are calling on the Federal Deposit Insurance Corporation to raise its threshold for deposit insurance more than $250,000 for all institutions after regulators granted two exceptions. (Celal Gunes / Anadolu Agency via Getty Images / File / Getty Images)

That has led mid-sized and community banks to urge regulators to take a more evenhanded approach to the issue by guaranteeing all uninsured deposits regardless of the banking institution for the next two years.

Anne Balcer, senior executive vice president and chief of government relations and public policy at the Independent Community Bankers of America (ICBA), told FOX Business that regulators should take a "prudent approach to any changes in FDIC insurance."

"It may make sense for Congress to look at the insurance limit cap and revisit raising it based on metrics demonstrating increasing deposit balances since the previous increase, but the tone coming from Treasury of picking winners and losers defies logic and is largely inappropriate," Balcer added. "If the FDIC decides to provide unlimited deposit insurance for some institutions, even on a limited basis, they cannot discriminate and leave others out, particularly those that have been operating on a safe and sound basis, such as the nation’s community banks."

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Treasury Secretary Janet Yellen testified that federal regulators aren’t planning to backstop uninsured deposits at banks that aren’t deemed systemically important. (AP Photo / Jacquelyn Martin / File / AP Newsroom)

The Mid-Size Bank Coalition of America (MBCA) sent a letter to the Treasury Department, FDIC, the comptroller of the currency, and the Federal Reserve to urge regulators to lift the deposit insurance cap for all institutions for two years, according to a report by Bloomberg.

"Doing so will immediately halt the exodus from smaller banks, stabilize the banking sector and greatly reduce the chances of more bank failures," the MBCA letter reportedly said.

Treasury Secretary Janet Yellen said in congressional testimony last week that uninsured deposits will only be backstopped by the government "if a majority of the FDIC board, a supermajority of the Fed board, and I in consultation with the president, determine that the failure to protect uninsured depositors would create systemic risk and significant economic and financial consequences."

NEW YORK BANKCORP SHARES SOAR ON SIGNATURE DEAL

Federal regulators granted a systemic risk exception to backstop all of Silicon Valley Bank’s deposits, including uninsured deposits above the FDIC threshold. (AP Photo / Benjamin Fanjoy / File / AP Newsroom)

Sen. James Lankford, R-Okla., noted that could make smaller banks a less attractive destination for depositors with funds above the $250,000 threshold.

He said it sounded as though Yellen is "encouraging anyone who has a large deposit at a community bank to say, ‘We’re not going to make you whole, but if you go to one of our preferred banks, we will make you whole.’"

Yellen responded by saying, "That’s certainly not something that we’re encouraging."

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Congress will hold an oversight hearing next week in the wake of the bank failures. The House Financial Services Committee will hear from Martin Gruenberg, the chairman of the FDIC’s board of directors, and Michael Barr, the Federal Reserve Board of Governors vice chair for supervision, in a hearing scheduled for March 29.

Entertainment

Sean ‘Diddy’ Combs denied bail again ahead of sentencing

Published

24 mins ago

August 5, 2025

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Sean 'Diddy' Combs denied bail again ahead of sentencing

Sean “Diddy” Combs has been denied bail ahead of his sentencing on prostitution-related charges.

Judge Arun Subramanian said the hip-hop mogul had failed to show sufficient evidence he is not a flight risk and also cited admissions of previous violence made during his trial.

Combs, 55, has been in prison since his arrest in September last year.

During a two-month trial, jurors heard allegations that he had coerced former girlfriends, including singer and model Cassie Ventura, into having drug-fuelled sex marathons with male sex workers, while he watched and filmed them.

In July, he was found guilty of two counts of transportation for prostitution – but cleared of more serious charges of racketeering conspiracy and sex-trafficking, which carried potential life sentences.

The rapper’s legal team hailed this a “victory” and immediately applied for bail ahead of sentencing, citing his acquittal on the top charges.

After this was denied, they submitted another application last week. Judge Subramanian has now rejected the request again.

In denying the motion for bail, the judge found Combs had failed to show sufficient evidence to counter arguments he is a flight risk, writing in a court filing: “Increasing the amount of the bond or devising additional conditions doesn’t change the calculus given the circumstances and heavy burden of proof that Combs bears.”

He also found that an argument by the music star’s legal team that the squalor and danger of the Metropolitan Detention Center (MDC), where he is being held, did not warrant release.

“The public outcry concerning these conditions has come from all corners,” the judge wrote. “But as Combs acknowledges, MDC staff has been able to keep him safe and attend to his needs, even during an incident of threatened violence from an inmate.”

As well as Combs’s bail application, his legal team has also filed a motion calling for him to be acquitted or given a new trial on the prostitution-related charges only.

The judge has not yet responded to this application.

How long could Diddy be jailed for?

Combs is due to be sentenced on 3 October and could be sentenced to up to 20 years in prison.

Discussions on sentencing guidelines which followed the jury’s verdict suggest it is unlikely he will be jailed for this long, with an estimate of around two to five years, taking into account time already served.

However, it is ultimately up to Judge Arun Subramanian to decide the rapper’s punishment.

On Friday, Donald Trump was asked during an interview about a potential pardon for Combs following speculation about the issue.

The president said it was unlikely, adding that the rapper was “very hostile” during his presidential campaign.

Combs, who co-founded Bad Boy Records and launched the career of the late Notorious BIG, was for decades a huge figure in pop culture – a Grammy-winning hip-hop artist and business entrepreneur, who presided over an empire ranging from fashion to reality TV.

As well as the criminal conviction, he is also facing several civil lawsuits.

Business

BP raises prospect of more job losses as AI drives efficiency

Published

24 mins ago

August 5, 2025

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BP raises prospect of more job losses as AI drives efficiency

BP has signalled an accelerated effort to bring down costs ahead, refusing to rule out further job losses as artificial intelligence (AI) technology helps drive efficiencies.

The company, which revealed in January that it was to axe almost 8,000 workers and contractors globally as part of a cost-cutting plan, said alongside its second quarter results that it was to review its portfolio of businesses and examine its cost base again.

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BP is under pressure to grow profitability and investor value through a shareholder-driven refocus on oil and gas revenues.

Just 24 hours earlier, the company revealed progress through its largest oil and gas discovery, off Brazil’s east coast, this century.

BP said it was exploring the creation of production facilities at the site.

It has made nine other exploration discoveries this year.

BP’s share price has lagged those of rivals for many years – a trend that investors have blamed on the now-abandoned shift to renewable energy that began under former boss Bernard Looney.

His replacement, Murray Auchincloss, has reportedly come under shareholder pressure to slash costs further, with the Financial Times reporting on Monday that activist investor Elliott was leading that charge based on concerns over high contractor numbers.

Mr Auchincloss said on Tuesday that AI was playing a leading role in bolstering efficiency across the business.

In an interview with Sky’s US partner CNBC, he said: “We need to keep driving safely to be the very best in the sector we can be, and that’s why we’re focused on another review to try to drive us towards best in class… inside the sector, and technology plays a huge part in that.

“Just technology is moving so fast, we see tremendous opportunity in that space. So it’s good for all seasons to drive cost discipline and capital discipline into the business. And that’s what we’re focused on.”

When contacted by Sky News, a BP spokesperson suggested the company had no plans for further job losses this year and could not speculate beyond that ahead of the conclusions of the new cost review.

BP reported a second quarter underlying replacement cost profit of $2.4bn, down 14% on the same period last year but well ahead of analyst forecasts of $1.8bn. Much of the reduction was down to lower comparable oil and gas prices.

It moved to reward investors with a 4% dividend increase and maintained the pace of its share buyback programme at $750m for the quarter.

BP said it was making progress in driving shareholder value through both its operational return to oil and gas investment and cost reductions, which stood at $1.7bn over the six months.

Shares, up 3% over the year to date ahead of Tuesday’s open, were trading 2% higher in early dealing.

Derren Nathan, head of equity research at Hargreaves Lansdown, said of the company’s figures: “Production increases, strong results from trading activities, favourable tax rates, and better volumes and margins downstream all played their part.

“It’s also upping the ante when it comes to exploration and development, culminating in this week’s announcement of an oil find at the offshore Brazilian prospect Bumerangue.

“Its drilling rig intersected a staggering 500m of hydrocarbons. Taking into account the acreage of the block, it’s given BP the confidence to declare the largest discovery in 25 years.”

Environment

Russia weighs into U.S.-India tariff spat, saying New Delhi can choose its own trade partners

Published

1 hour ago

August 5, 2025

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Russia weighs into U.S.-India tariff spat, saying New Delhi can choose its own trade partners

Russia’s President Vladimir Putin bids farewell to India’s Prime Minister Narendra Modi following their meeting at the Kremlin in Moscow, Russia July 9, 2024.

Gavriil Grigorov | Via Reuters

Russia on Tuesday weighed into the growing spat between India and the U.S., with the Kremlin saying New Delhi is free to choose its own trading partners.

Washington and India’s leadership are at loggerheads over imports of Russian oil, with U.S. President Donald Trump threatening New Delhi with much steeper tariffs if it continues to purchase the commodity from Russia.

The Kremlin, an important trading partner of India’s and one which had stayed silent as the spat erupted in the last few days, commented that Trump’s tariff threats are “attempts to force countries to stop trade relations with Russia.”

“We do not consider such statements to be legitimate,” Kremlin Press Secretary Dmitry Peskov continued, speaking to reporters Tuesday.

“We believe that sovereign countries should have, and have the right to choose their own trade partners, partners in trade and economic cooperation. And to choose those trade and economic cooperation regimes that are in the interests of a particular country.”

The dispute between Trump and New Delhi is being closely watched by investors after Trump threatened on Monday that he would be “substantially raising” the tariffs on India, although he did not specify the level of the higher tariffs. The president had threatened a 25% duty on Indian exports, as well as an unspecified “penalty” last week.

He also accused India of buying discounted Russian oil and “selling it on the Open Market for big profits.”

India hit back at the U.S. later on Monday, accusing it and the European Union of hypocrisy.

“It is revealing that the very nations criticizing India are themselves indulging in trade with Russia. Unlike our case, such trade is not even a vital national compulsion [for them],” the foreign ministry said in a statement.

Western countries have used sanctions and import restrictions as a way to stifle Moscow’s oil export-generated revenues that fund its war machine against Ukraine. However, some of Russia’s trading partners, particularly India and China, have continued their purchases of discounted Russian crude that their economies largely rely on.

India and Russia’s trade relationship has grown since the invasion of Ukraine in 2022; Russia became India’s leading oil supplier after the war began, with imports increasing from just under 100,000 barrels per day before the invasion — 2.5% of total imports — to more than 1.8 million barrels per day in 2023 — 39% of overall imports, the U.S. Energy Information Administration said earlier this year.

— CNBC’s Lim Hui Jie contributed reporting to this story.