Singapore says it has ‘insignificant’ exposure to failed U.S. banks
The Monetary Authority of Singapore said its exposure to Silicon Valley Bank was “insignificant.”
“The Singapore banking system has insignificant exposures to those failed banks within the U.S.,” the MAS said in a press release on Monday.
“Banks in Singapore are well-capitalized and conduct regular stress tests against rate of interest and other risks,” it said, adding that their liquidity positions are healthy and supported by a “stable and diversified funding base.”
— Jihye Lee
Dollar index at lowest since Feb, Asian currencies mixed
The dollar index was at 103.68, hovering across the weakest level since mid-February,.
Asian currencies traded mixed on Tuesday’s morning, with the Latest Zealand dollar and the Australian dollar each strengthening to 0.6210 and 0.6651 against the greenback, respectively.
The Japanese yen barely weakened to 133.24 against the U.S. dollar and the offshore Chinese yuan also weakened to six.8591 against the greenback.
The Korean won also marginally weakened to 1,297.49 against the U.S. dollar.
Fed’s Barr to steer review into regulation of SVB
The Federal Reserve’s top regulator might be leading a review into the events resulting in the implosion of Silicon Valley Bank, the central bank announced Monday.
Vice Chair for Supervision Michael S. Barr has been tapped for the probe, the outcomes of which might be released to the general public May 1. The review will concentrate on the review and supervision of SVB, which the Fed oversees in its role as a regulator.
“The events surrounding Silicon Valley Bank demand a radical, transparent, and swift review by the Federal Reserve,” Chairman Jerome Powell said.
—Jeff Cox
Biden says banking system is protected, calls on Congress to strengthen rules after failures
President Joe Biden said Monday that Americans may be confident that the U.S. banking system is protected after regulators scrambled over the weekend to create a plan to backstop deposits at Silicon Valley Bank and Signature Bank.
“Your deposits might be there once you need them. Small businesses across the country with deposit accounts at these banks can breathe easier knowing they’ll have the ability to pay their staff and pay their bills,” he said briefly remarks Monday before the market’s open.
Biden stressed that no losses might be borne by the U.S. taxpayers. Also, the management of the banks might be replaced and bank investors won’t be protected, he said.
Biden also called on Congress to look for tactics to strengthen banking rules to forestall these events from repeating.
—Christina Cheddar Berk
Gundlach says Fed will hike rates to save lots of credibility
DoubleLine Capital CEO Jeffrey Gundlach believes that the Federal Reserve will still pull the trigger on a small rate hike next week despite the continuing chaos within the banking sector that prompted extraordinary rescue motion from regulators.
“I just think that, at this point, the Fed will not be going to go 50. I might say 25,” Gundlach said on CNBC’s “Closing Bell” Monday. To save lots of the central bank’s “credibility, they’ll probably raise rates 25 basis points. I might think that that might be the last increase.”
— Yun Li
Fed more likely to keep mountaineering despite economic system fractures
A preferred adage available in the market is that after it starts, the Federal Reserve will keep raising rates of interest until something breaks. But even with the recent turmoil within the banking industry, markets largely expect the Fed to maintain mountaineering.
“Is that this enough to qualify because the form of break that might have the Fed pivot? The market overall doesn’t think so,” Quincy Krosby, chief global strategist at LPL Financial, said of the recent collapses of Silicon Valley Bank and Signature Bank.
Markets in actual fact were pricing in a few 75% likelihood of 1 / 4 percentage point increase when the Fed meets next week, in response to CME Group data.
Goldman Sachs was an outlier in predicting that policymakers would take a transient pause then resume mountaineering once conditions get more stable. Economists at each Citigroup and Bank of America said they expect more increases.
Holding off a rate hike “would invite markets and the general public to assume that the Fed’s inflation fighting resolve is just in place as much as the purpose when there’s any bumpiness in financial markets or the true economy,” Citigroup economist Andrew Hollenhorst said in a client note.
—Jeff Cox
