Author: News Room

Last week we welcomed a new generation of unwilling citizens to a new banking crisis with the shocking failure of Silicon Valley Bank. It started sometime mid-last week when some clever clog heard of the impending failure of a financial transaction to raise capital for SVB to plug a big hole in its finances. The big hole was created by something known as an asset liability mismatch. SVB used a bulge of savers deposits that had accumulated over the past couple of years to purchase a lot of long-term treasury bills a few months back at a lower interest rate…

Following the bailout of Silicon Valley Bank and Signature Bank, deposits have become front and center once again. Instead of rehashing what went wrong or speculating on the next shoe to drop, banks should use this opportunity to look ahead and prepare now for what’s likely to happen in the next two to three years. It’s no secret that 15+ years of near-zero rates have distorted banking. With little value in deposits, banks were driven to focus on isolated products that generated fees or gains instead of focusing on the customers’ holistic financial needs. Fintechs and digital upstarts emerged to…

By Davide Barbuscia NEW YORK (Reuters) -The Federal Reserve’s preferred bond market signal of an upcoming recession has plunged to fresh lows, bolstering the case for those who believe the central bank will soon need to cut rates in order to revive economic activity. Research from the Fed has argued that the “near-term forward spread” comparing the forward rate on Treasury bills 18 months from now with the current yield on a three-month Treasury bill was the most reliable bond market signal of an imminent economic contraction. That spread, which has been in negative territory since November, plunged to new…

By Georgina Lee HONG KONG (Reuters) – Chicago’s CME Group opened options trading for futures on Monday, as it looks to deepen a market that investors use for betting or hedging against moves in China’s currency. Hong Kong has offered similar exchange-traded options since 2017, though bringing the product to CME – the world’s biggest derivatives exchange – may be a step toward competing with the banks that dominate options by selling directly to customers. “Many traders no longer view CNH as an emerging market currency like it was ten years ago,” said Chris Povey, CME Group’s (NASDAQ:) executive director…

By Barani Krishnan  Investing.com — Recession worries have started dominating markets of all shapes and sizes outside of oil, a day after OPEC+ announced a second production cut in four months. But longs in crude refused to settle for a negative close on Tuesday, pushing for a small gain that built on the mammoth 5% rally from the previous session. New York-traded , or WTI, crude settled at $80.71, up 29 cents, or 0.4%, after a session high of $81.78. On Monday, WTI jumped 6.3%. Since hitting 15-month lows of $64.12 on March 20, the U.S. crude benchmark has gained…

© Reuters. FILE PHOTO: Toy figures of people are seen in front of the displayed Paramount + logo, in this illustration taken January 20, 2022. REUTERS/Dado Ruvic/Illustration (Reuters) -Paramount Global is exploring the sale of a majority stake in Noggin, its online learning service for children, the Wall Street Journal reported on Friday, citing people familiar with the situation. The company is looking at an opportunity to develop Noggin, which is known for content like “PAW Patrol” and “Peppa Pig”, into an interactive learning platform, and is seeking an investor for the job, the report said. Paramount wants to retain…

The Federal Reserve will have to be nimble as it sets interest rates given the uncertainty facing the outlook, Richmond Fed President Tom Barkin said Thursday. “Most forecasts of our policy path seem to average the risk of higher inflation with the risk of further contagion in banking,” Barkin said in a speech to the Virginia Council of CEOs at the University of Richmond. “I see the range of potential outcomes as pretty wide,” Barkin added. In his comments about the sudden collapse of Silicon Valley Bank earlier this month, Barkin said that not every bank failure becomes Lehman Brothers…

Surprise crude oil production cuts from Saudi Arabia and other oil-rich countries shouldn’t produce worries of skyrocketing gas costs for U.S. drivers still smarting from last year’s pump price shocks, according to fuel industry experts. At a time when gas prices are already increasing because of rising seasonal demand, the slashed crude oil output that Saudi Arabia announced Sunday will translate into higher prices, they say. But compared to last year — when energy markets were absorbing the initial impact of Russia’s invasion of Ukraine — the altitude on those gas price increases may not feel so steep. On Monday,…

About the author: Edward Price is principal at Ergo, a global intelligence, consulting, and forecasting firm. A former British trade official, he also teaches at New York University’s Center for Global Affairs.KYIV, Ukraine—Air raid sirens. Bomb shelters. Captured Russian tanks. All are plentiful in this war-stricken city. But Kyiv is also a city at work. And on the last Friday in March, the city’s boulevards buzz. Were it not for the occasional soldier, and the golden turrets of turquoise Orthodox churches, I could be in France. Only Kyiv seems calmer than riotous Paris.   I’ve strolled downtown to meet Sergii Marchenko, Ukraine’s 42-year-old…

With the best-case scenario for bank stocks this earnings season being the proverbial “better than feared,” investors may want to ponder what the industry will look like in the future to find today’s opportunities. Here’s a hint: Expect a wave of consolidation after there’s a bit more distance from last month’s collapse of Silicon Valley Bank and Signature Bank. It’s long been said that the U.S. is overbanked compared with the rest of the world. We lead with 4,135 banking institutions, according to the Federal Deposit Insurance Corp. The United Kingdom comes in a distant second with 311, and the…