Speaker 1: Live from the Bloomberg Interactive Brokers Studios. This is Bloomberg
Speaker 1: day Break for Wednesday, March fifteenth. Coming up today, the
Speaker 1: FED weighs tougher rules for lenders following the collapse of
Speaker 1: Silicon Valley Bay Bank of America rakes in more than
Speaker 1: fifteen billion dollars in deposits after the failure of SVB.
Speaker 1: TikTok considers splitting away from Byte Dance, and investors await
Speaker 1: reports on inflation and retail sales. The State Department is
Speaker 1: condemning Rush over the downing of a US drone plus
Speaker 1: Ohio suing North Park Southern over last month's trained arailment.
Speaker 1: I'm John Tucker. More Ahead, I'm John Stash Aaron Sports.
Speaker 1: The next road trip ended with a win at Portland
Speaker 1: and nets lost at Oklahoma City, The Rangers one, the
Speaker 1: Devils and Islanders bothe Law. That's all straight Ahead on
Speaker 1: Bloomberg day Break, The business news you need, disturn your day,
Speaker 1: and just one fifteen minute podcast each pointing on Apples, Spotify,
Speaker 1: The Bloomberg Business Appen everywhere you get your podcasts. Good morning,
Speaker 1: I'm Amy Morris and I'm kieron Moscow. Here are the
Speaker 1: stories we're following today, we begin with a continued fallout
Speaker 1: from the collapse of Silicon Valley Bank. Bloomberg News has
Speaker 1: learned the Federal Reserve is now considering changes to its
Speaker 1: oversight of midsized banks. At the same time, former FED
Speaker 1: Vice Chair for Supervision Randall Quarrels, is downplaying the role
Speaker 1: of looser rules in svb's collapse. I think there will
Speaker 1: be an effort to push down some of the regulation
Speaker 1: that currently applies to larger banks down into the smaller banks.
Speaker 1: I may self think that for the most part, that
Speaker 1: will probably be a mistake driven by a misunderstanding of
Speaker 1: what just happened. Randall Quarrels served as the fed's top
Speaker 1: cop on Wall Street from twenty seventeen to twenty twenty.
Speaker 1: Well over the past few days, amy we've seen the
Speaker 1: collapse of SVB and state regulators see Signature Bank. Despite
Speaker 1: all of that, Federal Reserve Governor Michelle Bowman says America's
Speaker 1: banking system remains on steady footing. The US banking system
Speaker 1: remains resilient and on a solid foundation, with strong capital
Speaker 1: and liquidity throughout the system. FED Governor Michelle Bowman made
Speaker 1: the comments at a banking conference in Honolulu. Despite that assessment,
Speaker 1: some officials want more oversight set at Banking Chairman Shared
Speaker 1: Brown is among them. He sees little chance Congress will
Speaker 1: move to Titan regulations. He's urging the Fed to act unilaterally.
Speaker 1: Every time the Silicon Valley bank and bankers so often
Speaker 1: come to Congress to weaken rules, too often, Congress goes along,
Speaker 1: and whatever we do here, we're going to strengthen oversight rules.
Speaker 1: Senate Banking Chairman Jared Brown spoke with Joe Matthew and
Speaker 1: Anne Marie Hordern on Bloomberg Sound On. Catch the program
Speaker 1: weekdays from one until three pm Eastern on Bloomberg Radio
Speaker 1: and download sound on wherever you get your podcasts. Now.
Speaker 1: A key question in the fedsprobe of Silicon Valley Bank
Speaker 1: Amy will Be who was managing risk? And we get
Speaker 1: that part of the story from Bloomberg's Done Christner. For
Speaker 1: much of last year, SVB didn't have a chief risk officer.
Speaker 1: A twenty twenty three proxy statement shows Laura Eziureta stepped
Speaker 1: down from performing the role in April, although she didn't
Speaker 1: leave the company until December. It was in December when
Speaker 1: Kim Olsen took the job after serving as chief US
Speaker 1: risk officer for Sumi Tomo Mutsui Banking Corporation. Olson was
Speaker 1: based in New York, across the country from most of
Speaker 1: the rest of the svb's top brass. The months along
Speaker 1: vacancy has drawn the attention of lawyers who are circling
Speaker 1: SVB with an eye on bringing shareholder lawsuits in New York.
Speaker 1: I'm Doug Prisoner Bloomberg Daybreak. Thank you, Doug. When it
Speaker 1: comes to worry's over Signature Bank, sources say federal prosecutors
Speaker 1: were already investigating the firm before its seizure by regulators.
Speaker 1: Bloomberg's Jeff Bellinger reports the probe involved the bank's work
Speaker 1: with crypto clients. People familiar with the matter tell Bloomberg
Speaker 1: the New York bank was being investigated by Justice Department
Speaker 1: officials in Washington and Manhattan. The authorities wanted to know
Speaker 1: whether Signature was taking sufficient steps to detect possible money
Speaker 1: laundering by clients. Sources say the Securities and Exchange Commission
Speaker 1: was also looking into the bank's operations. There's been no
Speaker 1: official comment from many of the agencies or the failed
Speaker 1: bank at this point. The bank and its staff are
Speaker 1: not accused of any wrongdoing. Jeff Bellinger, Bloomberg Day Break,
Speaker 1: Ry Jeff, thanks well, it was rebound day for regional
Speaker 1: banks after the recent carnage on Wall Street. First Republic
Speaker 1: had its biggest single day gain ever yesterday, rising twenty
Speaker 1: seven percent, PacWest gained a record thirty four percent, and
Speaker 1: Western Alliance Bank Corps rose fourteen percent. While those regional
Speaker 1: bank shares were falling, short sellers minted more than two
Speaker 1: billion dollars in paper profits in just three days. Trading
Speaker 1: from Thursday to Monday saw the Spider SNP Regional Banking
Speaker 1: ETF fall twenty three percent, its biggest plun since twenty twenty. Well,
Speaker 1: the pain in regional banks is paying big dividends. For
Speaker 1: Bank of America, bef A mopped up more than fifteen
Speaker 1: billion dollars in new deposits in just a matter of days.
Speaker 1: JP Morgan, Chase, City Group, and Wells Fargo also ranked
Speaker 1: in billions. So the figures have not yet been disclosed.
Speaker 1: Another major story we're following this morning involved TikTok. We're
Speaker 1: learning the Chinese company's leadership is discussing the possibility of
Speaker 1: separating from its parent company Bike dance. Let's get the
Speaker 1: latest Live with Bloomberg. Steve Rappaport. Good morning, Steve, Good
Speaker 1: morning Amy and Karen. Divesting TikTok from its Chinese parent
Speaker 1: company would be a last resort if the platform's existing
Speaker 1: proposal with national security officials falls through. That's according to sources,
Speaker 1: who also tell Bloomberg Beijing would ultimately have final say
Speaker 1: on a split Congress. The White House and more than
Speaker 1: half of US states banned the use of TikTok on
Speaker 1: government issued devices. The Senate is taking up legislation for
Speaker 1: a total ban in the US. Live from New York,
Speaker 1: I'm Steve Rappaport, Bloomberg Daybreak. All right, Steve, thanks well.
Speaker 1: On the economic front, where it coming off a day
Speaker 1: where consumer prices showed inflation is still an issue. Now
Speaker 1: we get another pair of key economic reports, and Bloomberg's
Speaker 1: Michael McKee has the details. Two more reports on producer
Speaker 1: prices and retail sales will help Fed policymakers decide what
Speaker 1: still needs to be done to tame inflation and how quickly.
Speaker 1: A week ago, investors were arguing over whether the Central
Speaker 1: Bank should raise interest rates by a quarter or half
Speaker 1: percentage point throw in one banking crisis, and some went
Speaker 1: so far as to predict rap cuts. The Consumer Price
Speaker 1: Report out Tuesday showed prices are still rising. However, today's
Speaker 1: PPI will offer evidence of inflation in the pipeline, and
Speaker 1: retail sales will show whether Americans still feel confident about
Speaker 1: spending money. Michael McKee, Bloomberg Daybreak, Right, Michael, thank you,
Speaker 1: and straight ahead. We have your latest local headlines, plus
Speaker 1: a check of sports, and this is Bloomberg. Thank you, Karen.
Speaker 1: Five h seven on Wall Street, thirty six degrees in
Speaker 1: New York with partly Cloudy's guys going up to forty
Speaker 1: five degrees. Time now for a look at some of
Speaker 1: the other stories making news in New York and around
Speaker 1: the world. For that, we're joined by Bloomberg's John Tucker.
Speaker 1: Good morning John, Good morning Amy. A US unmanned aircraft
Speaker 1: collimbed with the Russian fighter jet over the Black Sea.
Speaker 1: Thirty two million dollar drone later crashed into the water.
Speaker 1: US officials claimed the Russian pilots made close passes and
Speaker 1: sprayed fuel onto the drone before the plane struck the
Speaker 1: drone's rear propeller. State Department spokesman Ned Price We are
Speaker 1: engaging directly with the Russians again at senior levels, to
Speaker 1: convey our strong objections to this unsafe, unprofessional intercept which
Speaker 1: caused the downing of the unmanned US aircraft. The State
Speaker 1: Departments ned Price went on to call it a brazen
Speaker 1: violation of the international law. Moscow insists its warplanes didn't
Speaker 1: fire their weapons or hit the drone. The cleanup continues
Speaker 1: from a north eastern north and west of New York City.
Speaker 1: The governors of New York, New Jersey, and Connecticut issued
Speaker 1: states of emergency yesterday. Some towns in Putnam County, New York,
Speaker 1: are digging out for more than ten inches of snow.
Speaker 1: New York lawmaker is floating a personal income tax increase
Speaker 1: for individuals earning more than five million dollars and a
Speaker 1: child tax credit expansion. Lawmakers also pitch raising the current
Speaker 1: ten point nine percent tax rate to eleven point four
Speaker 1: percent on taxpayers earning more than twenty five million dollars. Meanwhile,
Speaker 1: State Senate and Assembly Democrats have pushed back on Governor
Speaker 1: Hoko's plan to tie the minimum wage to inflation. They
Speaker 1: say the hourly rate should first be boosted to ensure
Speaker 1: workers earn a living wage. The deadline for lawmakers and
Speaker 1: HOCO to agree on the proposed two hundred and twenty
Speaker 1: seven billion dollars state budget is March thirty first. Ohio
Speaker 1: is taking Norfolk Southern to court over last month's trained
Speaker 1: deraimant and toxic fire in East Palestine, but State Attorney
Speaker 1: General Dave Yo says the lawsuit aims to ensure the
Speaker 1: railroad pays for the cleanup and environmental damage. This derailment
Speaker 1: was entirely avoidable, and I'm concerned that Norfolk and Southern
Speaker 1: maybe putting profits for their own company above the health
Speaker 1: and safety of cities and communities that they operate in.
Speaker 1: Yost also plans to force the company to pay for
Speaker 1: groundwater and soil monitoring. Only years he had Global news
Speaker 1: twenty four hours a day, power by more than twenty
Speaker 1: seven hundred journalist and analysts more than one hundred twenty countries.
Speaker 1: I'm John Tucker, this is Bloomberg Aby, all right, thank you,
Speaker 1: John don now that the sports report brought to you
Speaker 1: by try State Audi. For that, we bring in Bloomberg's
Speaker 1: John's dash our all right. I mean Nicks have to
Speaker 1: be happy they get a split of the four game
Speaker 1: road trip. Considering Jalen Brunson only played a half of
Speaker 1: one game, Emmanuel quickly has started in Brunsdon's place. At
Speaker 1: in Portland, he scored twenty eight points at ten rebounds.
Speaker 1: Nicks went from down thirteen to up nineteen. They meet
Speaker 1: the Blazers one twenty three, one oh seven. They sit
Speaker 1: fifth in the East game ahead of the Nets, who
Speaker 1: ended their trip with Oklahoma City got outscored by twenty
Speaker 1: four and the second half and OKC one one twenty
Speaker 1: one one oh seven. Mcal Bridges led Brooklyn with thirty
Speaker 1: fourth the Garden Rangers with a three goal first period
Speaker 1: two by Meks Avantage. Add He's up to thirty four
Speaker 1: goals on the year. The new Ranger Patrick Kane score
Speaker 1: of the power play blue Shirt Street Washington five to three.
Speaker 1: Devils lost to Tampa Bay four to one. Same two
Speaker 1: teams play again in New York tomorrow. Islanders lost in
Speaker 1: La five to two, Kings with four goals in a
Speaker 1: ten minute span of the second period. NCUBAA Tournaments Underway
Speaker 1: pit where the one point went over Mississippi State. Tonight
Speaker 1: in Dayton, Fairleigh Dickinson takes on Texas Southern. Who's got
Speaker 1: a record of ten and sixteen. FTU got into the
Speaker 1: NC double As despite losing the n EC Attorney Final
Speaker 1: to Merrimack, whose new to Division One and not yet
Speaker 1: eligible for the NC Doubaas n IT Seaton Hall lost
Speaker 1: by one of Colorado. Hofstra beat Rutgers in overtime. The
Speaker 1: Giants traded a third round draft pick to the Raiders
Speaker 1: for tight end Darren Waller. The Jets signed free agent
Speaker 1: white out Alan Lazard. Will that lead to acquiring Lizard's
Speaker 1: teammate at Green Bay Aaron Rodgers? Perhaps, but hasn't happened yet.
Speaker 1: Better than QB Andy Dalton sign Carolina The Colts expected
Speaker 1: release quarterback Matt Robert John stash Allen. Bloomberg Sports live
Speaker 1: from coast to coast, from New York to San Francisco,
Speaker 1: Boston to Washington, d C. Nationwide on Sirius, Exam of
Speaker 1: Bloomberg Business app and Bloomberg dot Com. This is Bloomberg Daybreak.
Speaker 1: Good morning. I'm Amy Morris, and we continue to track
Speaker 1: the fallout after the collapse at Silicon Valley Bank. Turns
Speaker 1: out we're seeing some larger banks benefit, but there's more
Speaker 1: going on here too. We're joined now by Bloomberg Finance
Speaker 1: reporter Jenny Sorain. Jenny, it's a pleasure, thanks for taking
Speaker 1: the time. What is going on with Bank of America. Yeah,
Speaker 1: that was the big news yesterday was that they've actually
Speaker 1: soaked up more than fifteen billion in deposits in the
Speaker 1: aftermath of svb's collapse last week. So you're really seeing,
Speaker 1: you know, these bigger banks see just a huge influx
Speaker 1: of customers as they seek you more stable and more
Speaker 1: rights reliable banking partners during this time, So customers are
Speaker 1: then saying, we don't want to deal with mid size
Speaker 1: banks anymore. We want to find a bank that's too
Speaker 1: big to fail. Um. That's one way of putting it. Um.
Speaker 1: I mean, I think this really did spook a lot
Speaker 1: of folks, and it's, you know, in a time where
Speaker 1: it's hard to know, um, you know exactly what the
Speaker 1: stability of your banking partner is, folks do tend to
Speaker 1: go with the biggest players, and so I think that
Speaker 1: is one thing that regulators and outside experts are worried about,
Speaker 1: that this will cause this kind of flight to quality
Speaker 1: in a way and just make these big banks even bigger.
Speaker 1: Are there any other banks that are seeing an upside.
Speaker 1: I know, Bank of America's the big headline. Yeah, no,
Speaker 1: We've actually heard from a lot of other banks, you know,
Speaker 1: City Group, JP, Morgan, Chase, Wells, Fargo also seeing really
Speaker 1: really big influence right now. So I think it's it's
Speaker 1: across the board. But we do have that, you know,
Speaker 1: hard number for Bank of America fifteen billion, just to
Speaker 1: give us kind of a sense of the scale of
Speaker 1: the increase that these guys are seeing. So what are
Speaker 1: some of the regulators doing now to make sure this
Speaker 1: doesn't happen again? Yeah. You know, it's interesting because here's
Speaker 1: an years ago. Back in twenty eighteen nineteen timeframe, we
Speaker 1: saw a big rolling back of regulation for these midsized banks,
Speaker 1: and a lot of folks in the past few days
Speaker 1: have really been pointing to that time frame and those
Speaker 1: moves by regulators as what sort of got us here today.
Speaker 1: Back then, you know, they said, okay, for the regional
Speaker 1: banks of SVB size, they no longer need to think
Speaker 1: about these losses in the securities portfolio as part of
Speaker 1: their capital. They did a few other things to kind
Speaker 1: of lessen the load for these guys, and so a
Speaker 1: lot of folks have been wondering, you know, if that
Speaker 1: hadn't happened, would we be where we are today? And
Speaker 1: so I think that's what regulators are really looking at
Speaker 1: and looking to try to answer for folks, and looking
Speaker 1: at ways that maybe they can undo some of what
Speaker 1: they did just a few years ago. I wondered about that, Jenny.
Speaker 1: There is a debate now over whether they need to
Speaker 1: enforce the regulations that are still are already in place,
Speaker 1: or if they do need to claw back and get
Speaker 1: more of those regulations back from the twenty eighteen twenty
Speaker 1: nineteen timeframe. What are you hearing? There's a lot of
Speaker 1: finger pointing here. Yeah, it's definitely. I think, as you
Speaker 1: might imagine in DC especially, it's become something of a
Speaker 1: blame game. You know, you've got Democrats on one side saying, oh,
Speaker 1: this was happening under Trump when he, you know, encouraged
Speaker 1: the rollback of all these different regulations. You've got Republicans
Speaker 1: on the other side saying, no, this all happened under
Speaker 1: Biden's watch, and his regulators weren't, you know, they were
Speaker 1: asleep at the wheels. So I think we're going to
Speaker 1: see a lot more of that. And and you know,
Speaker 1: I totally expected in some ways, but but I do
Speaker 1: think you see regulators really digging in here and looking
Speaker 1: for ways to make sure that something like this really
Speaker 1: doesn't happen again. So how does this bound a factor
Speaker 1: into the Fed's decision next week or will it? No?
Speaker 1: I think that's a really important question, and when we're
Speaker 1: trying to track very closely. I mean, I think the
Speaker 1: one interesting aspect of all of this is, you know,
Speaker 1: with these big big banks now seeing this huge influx
Speaker 1: of deposits, it really has taken away the pressure for
Speaker 1: them to pass on some of the FED rate hikes
Speaker 1: to their customers. You know, that was something we really
Speaker 1: thought we'd start seeing this and so it's already, um,
Speaker 1: you know, you're already seeing some of the ways that
Speaker 1: this you know, transmission mechanism from d rate hikes is
Speaker 1: already starting to break down. So UM, I think it will.
Speaker 1: There's no way it won't factor in, But hard to
Speaker 1: say exactly how this might shake out. Has the death settled?
Speaker 1: Is another shoe gonna drop? That's what we're watching. So
Speaker 1: you know, I think it's hard to say. We've had
Speaker 1: Moodies come out with a lot of more um, you know,
Speaker 1: putting a lot more banks on ratings downgrade watch. Um,
Speaker 1: they actually downgraded the entire sector yesterday. So it feels
Speaker 1: like the rating agencies at least think there's more to come.
Speaker 1: But regulators, they really tried to bring the full force
Speaker 1: of the federal government who bear on Sunday, and so
Speaker 1: I think they're hoping this is contained for now. But um,
Speaker 1: but now you've got you've got folks on different sides
Speaker 1: of the aisle on that one. Before we let you go, Jenny,
Speaker 1: about a half a minute here, what are you watching
Speaker 1: for in the next few days. I mean, I think
Speaker 1: we're really paying attention to some of these regional banks
Speaker 1: that had a really high rate show of uninsured deposits,
Speaker 1: because those are the folks that might start to see
Speaker 1: a real big pickup in deposit plate and that was
Speaker 1: really what prompted the failure of SCB on Friday. So
Speaker 1: I think that's what we're mostly looking for, looking for
Speaker 1: any signs that you're seeing a big outflows, and beyond that,
Speaker 1: you know, just continuing to track what goes on with SVB.
Speaker 1: You know, there's been reports out there that the FDAC
Speaker 1: has restarted the auction for that. As for those assets,
Speaker 1: so we'll see how it all shakes out, but there's
Speaker 1: still a lot of moving pieces here. You're listening to
Speaker 1: Bloomberg Daybreak today, your morning brief on the stories making
Speaker 1: news from Wall Street to Washington and beyond. Look for
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Speaker 1: Bloomberg Daybreak