Yellen says US will take more action to protect smaller banks if needed

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2 years ago

March 21, 2023

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close video Treasury Secretary Yellen questioned over bank failures during Senate hearing

Fox News’ Chad Pergram discusses Treasury Secretary Janet Yellen’s comments during a Senate hearing over the Silicon Valley Banks failures, during which lawmakers expressed concerns.

Treasury Secretary Janet Yellen said Tuesday the government is prepared to take additional actions to protect smaller banks as the U.S. financial system confronts the worst crisis since 2008.

In remarks prepared for delivery to the American Bankers Association, Yellen expressed confidence in the nation's banks but suggested that further steps to protect banks may be necessary in the event of a deposit run.

"The steps we took were not focused on aiding specific banks or classes of banks. Our intervention was necessary to protect the broader U.S. banking system," Yellen said, according to an excerpt of her speech. "And similar actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion."

U.S. regulators took extraordinary steps earlier in March to contain the fallout from the collapse of Silicon Valley Bank and Signature Bank and shore up wavering confidence in the financial system, including protecting all deposits at the two institutions – even those holding funds that exceeded the FDIC's $250,000 insurance limit.

ONE YEAR INTO ITS INFLATION FIGHT, THE FED FACES A MURKY FUTURE

Janet Yellen, US Treasury secretary, during a House Ways and Means Committee hearing in Washington, DC, US, on Friday, March 10, 2023. (Al Drago/Bloomberg via Getty Images / Getty Images)

The Federal Reserve also launched a new emergency backstop for lenders to help them meet deposit withdrawals under favorable terms.

The moves were intended to staunch a flow of funds from small and regional U.S. lenders as customers rushed to banks deemed too big to fail.

Although Treasury said that deposits are small and mid-sized banks have begun to stabilize, U.S. officials are reportedly studying whether they can temporarily expand federal deposit insurance to cover all deposits, according to Bloomberg News. A group of mid-sized banks has argued that is necessary to prevent bank runs for the next two years.

The former Fed chief did not address the matter in her speech.

Employees walk in front of a sign outside of the shuttered Silicon Valley Bank (SVB) headquarters on March 10, 2023 in Santa Clara, California. (Justin Sullivan/Getty Images / Getty Images)

"The situation is stabilizing. And the U.S. banking system remains sound," Yellen said. "The Fed facility and discount window lending are working as intended to provide liquidity to the banking system. Aggregate deposit outflows from regional banks have stabilized."

Yellen's comments come amid fresh turmoil in the banking sector and heightened fears over a broader financial crisis.

All eyes are currently on San Francisco-based First Republic Bank, which boasts about $213 billion in assets and a roster of wealthy clients. The mid-sized lender received a $30 billion cash infusion from 11 of the nation's biggest banks last week, but liquidity fears remain and there are new efforts underway to stabilize the bank, according to The Wall Street Journal.

MORTGAGE RATES POST BIG DECLINE AMID SVB FALLOUT

JPMorgan Chase CEO Jamie Dimon is leading discussions with the top executives of other big banks about how to boost First Republic's capital. Among the options on the table are an investment in First Republic by the banks themselves; a sale; or an outside liquidity injection, the Journal reported.

A First Republic Bank branch in New York, US, on Friday, March 10, 2023. (Photographer: Jeenah Moon/Bloomberg via Getty Images / Getty Images)

The concerns at First Republic and other mid-sized regional banks began after the historic failure of Silicon Valley Bank – the 16th largest lender in the country – earlier this month following a liquidity crunch. It marked the largest U.S. bank failure since the global financial crisis in 2008.

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SVB, which largely catered to tech companies, venture capital firms and high-net-worth individuals, saw a huge boom in deposits during the pandemic, with its assets surging from $56 billion in June 2018 to $212 billion in March 2023. The bank responded by investing a large chunk of that cash into long-term U.S. Treasury bonds and other mortgage-backed securities. However, that strategy backfired when the Fed embarked on the most aggressive interest-rate hike campaign since the 1980s, and the value of those securities tumbled.

That coincided with a decline in available funding for startups, which started drawing down more of their money to cover their expenses, forcing the lender to sell part of its bond holds at a steep $1.8 billion loss. When depositors realized that SVB was in a precarious financial situation, a bank run ensued.

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YouTuber Jake Paul beats Mike Tyson as boos heard during controversial fight

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3 hours ago

November 16, 2024

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YouTuber Jake Paul beats Mike Tyson as boos heard during controversial fight

YouTuber-turned-boxer Jake Paul has defeated one of the greatest-ever fighters, former heavyweight world champion Mike Tyson, who is more than twice his age.

Paul, 27, won the bout via a unanimous points decision at the AT&T Stadium in Arlington, Texas – home of the Dallas Cowboys and the biggest NFL stadium in the US.

The fight was already controversial but then arguably failed to live up to the hype. Boos were heard from the crowd in the final two rounds, after a perceived lack of action.

Afterwards, the pair heaped praise on each other. Paul said: “This man is an icon and it’s just an honour to be able to fight him. And he’s obviously the toughest, baddest man on the planet.”

Tyson, 58, described Paul as a “good fighter” but dismissed the suggestion he was out to prove something.

“I didn’t prove nothing to anybody, only to myself,” he said.

Boxing careers compared

This was not Paul’s first professional fight. The American YouTube star made his debut in 2020, and his most high-profile clash was last year against Tyson Fury’s brother Tommy Fury, which he lost by a split decision.

The so-called “Problem Child” has since defeated former UFC contender Nate Diaz, professional boxer Andre August, former Gold Gloves champion Ryan Bourland and most recently MMA fighter Mike Perry.

In contrast, “Iron Mike” Tyson was ranked among the best heavyweight boxers of all time.

During his career, he knocked out 44 opponents – retiring from professional boxing in 2005 after defeat against Kevin McBride.

He returned to the ring in 2020 for a bout against fellow boxing icon Roy Jones, which ended in an unofficial draw.

‘Someone’s getting put to sleep’

Earlier this week, Paul said he believed the bout would not go the distance. “No, someone’s getting put to sleep,” he said. “It’s going to be a war, and we’re both heavy hitters. It’s not going the full 16 minutes.”

Tyson said: “I’ve been through so many ups and downs since my last fight with Kevin McBride.

“I’ve been in rehab. I’ve been in prison, been locked up. Never in a million years did I believe I’d be doing this.”

Several states would not allow the bout to go ahead, and the Texas Athletic Commission only agreed to the fight if there were changes, due to Tyson’s age.

It limited the contest to eight rounds lasting a maximum of two minutes instead of three. Both boxers were also required to wear heavier gloves, designed to lessen the force of punches.

The fight was initially scheduled for 20 July, but was postponed when Tyson suffered an ulcer flareup.

Taylor defends title

Meanwhile, among the undercard fights, Irish boxer Katie Taylor successfully defended her super lightweight world title against Puerto Rico’s Amanda Serrano.

But it was tight. Taylor claimed the rematch 95-94 for all three judges in an epic battle.

The bout came two and a half years after the pair fought at Madison Square Garden, which Taylor won on a split decision.

Bout suffered from buffering

Earlier in the evening thousands of Netflix users in the US reported problems with the coverage, with some posting on social media about buffering.

At one point, more than 98,000 people had reported issues according to Downdetector, which tracks outages.

US

Matt Gaetz: Speaker Mike Johnson will request report into Trump’s attorney general pick is kept secret

Published

3 hours ago

November 16, 2024

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Matt Gaetz: Speaker Mike Johnson will request report into Trump's attorney general pick is kept secret

US House Speaker Mike Johnson has said he will “strongly request” a report into allegations of sex trafficking against Matt Gaetz, who is the president-elect’s choice of attorney general, should not be released.

Mr Johnson said he was against publishing the House Ethics Committee report on Mr Gaetz, 42, who if approved by the Senate will become the nation’s top prosecutor once Donald Trump is sworn in as president on 20 January.

That’s despite Mr Gaetz having previously faced a nearly three-year Justice Department investigation into sex trafficking allegations involving a 17-year-old girl. He denies the allegations and has not faced criminal charges.

Mr Gaetz has also never worked as a prosecutor and has only worked in law for a few years at a local level.

He stepped down from Congress after Mr Trump announced him as his attorney general pick.

His resignation brought the investigation by the House Ethics Committee to an end – two days before it had been expected to release its report into the trafficking claims.

House Speaker Mr Johnson, a Louisiana Republican, said of the probe: “I’m going to strongly request that the Ethics Committee not issue the report, because that is not the way we do things in the House.”

Politicians of both parties on the Senate Judiciary Committee have said they want to see the report on Mr Gaetz, as part of a Senate confirmation process for cabinet nominees that would start next year with public hearings.

Democrats have described the MAGA loyalist as “a gonzo agent of chaos” and his appointment a “red alert moment for our democracy”, while some Republican senators have also raised doubts about his suitability for the role.

Mr Johnson said he planned to urge House Ethics Committee chairman Michael Guest not to provide the report to the Senate Judiciary Committee.

“The rules of the House have always been that a former member is beyond the jurisdiction of the Ethics Committee,” said Mr Johnson, who returned on Friday morning from meeting Mr Trump at the president-elect’s Mar-a-Lago resort in Florida.

“I think it’s a terrible breach of protocol and tradition and the spirit of the rule,” he added. “I think that would be a terrible precedent to set.”

Mr Johnson had said on Wednesday that as Speaker he could not be involved in deciding whether or not to release the report.

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Malcolm X family brings $100m lawsuit against FBI, CIA and NYPD over ‘conspiracy to assassinate’ civil rights leader

Published

3 hours ago

November 16, 2024

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Malcolm X family brings 0m lawsuit against FBI, CIA and NYPD over 'conspiracy to assassinate' civil rights leader

A $100m (£79m) lawsuit has been brought against the CIA, FBI and New York Police Department (NYPD) who are accused of being involved in the 1965 assassination of civil rights leader Malcolm X.

The case, which has been filed in a federal court in Manhattan, New York, alleges that the agencies were aware of the assassination, they were involved in the plot and failed to stop the killing.

The legal action has been brought by Malcolm X’s three daughters along with his estate.

The NYPD and CIA have not yet responded to the claims while the FBI said it was “standard practice” not to comment on litigation.

Nicholas Biase, a spokesperson for the US Department of Justice, which is also included in the lawsuit, declined to respond.

Malcolm X was 39 when he was shot dead on 21 February 1965 on stage by three gunmen as he prepared to speak at the Audubon Ballroom in Manhattan.

At a news conference in New York on Friday, to announce the details of the lawsuit, attorney Benjamin Crump said: “The government fingerprints are all over the assassination of Malcolm X.

“We believe we have the evidence to prove it.”

For decades, questions have arisen over who was behind his murder.

Malcolm X rose to prominence as the national spokesman of the Nation of Islam, an African-American Muslim group which supported black separatism.

He broke away from the group in 1964 and moderated some of his earlier views on racial separation, which angered Nation of Islam members and resulted in death threats.

Three men were convicted of his murder but two of them were cleared in 2021 after investigators took a fresh look at the case. They concluded some evidence was shaky and authorities had held back some information.

In the lawsuit, which began its process in 2023, it is alleged the NYPD coordinated with federal law enforcement agencies to arrest the activist’s security guards days before the assassination.

It also claims police were intentionally removed from inside the ballroom where Malcolm X was killed and that federal agencies had personnel, including undercover agents, at the site but failed to protect him.

The lawsuit goes on to allege a “corrupt, unlawful, and unconstitutional” relationship between law enforcement and “ruthless killers… which was actively concealed, condoned, protected, and facilitated by government agents”.

Referring to Malcolm X’s family, the lawsuit states: “They did not know who murdered Malcolm X, why he was murdered, the level of NYPD, FBI and CIA orchestration, the identity of the governmental agents who conspired to ensure his demise, or who fraudulently covered up their role.”