Important Takeaways:
- The Central Bank of Iraq (CBI) banned eight local banks from making US dollar transactions on 4 February, in an attempt to avoid sanctions and US financial restrictions.
- A CBI document lists the banned banks as Ahsur International Bank for Investment, Investment Bank of Iraq, Union Bank of Iraq, Kurdistan International Islamic Bank for Investment and Development, Al-Huda Bank, Al-Janoob Islamic Bank for Investment and Finance, Arabia Islamic Bank, and Hammurabi Commercial Bank.
- “We commend the continued steps taken by the Central Bank of Iraq to protect the Iraqi financial system from abuse, which has led to legitimate Iraqi banks achieving international connectivity through correspondent banking relationships,” a US Treasury Department spokesman said on Sunday.
- The measures come after Iraqi officials met with the US Treasury Department’s top sanctions official Brian Nelson last week.
- The Finance Committee in the Iraqi parliament made a statement on 31 January calling for the sale of oil in currencies other than the US dollar, aiming to counter US sanctions on the Iraqi banking system.
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Important Takeaways:
- US Bank, Wells Fargo, Bank of America, Citizen, Chase and PNC are shutting hundreds of branches a year – here is what to do if your bank closes
- Banks are shutting hundreds of branches a year – this month some 41 closures were announced in a single week and among those affected were nine US Bank locations.
- Bank of America, Chase, PNC, Citizen, Capital One, First National Bank of Pennsylvania and Huntington also said they were axing branches.
- Such closures deal a huge blow to customers looking to visit in person to submit a document, make a withdrawal or deposit, cash in a check or simply run through their finances with a trusted bank manager.
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Important Takeaways:
- Banks Terminate 60,000 Workers In One Of The Bleakest Years For The Industry Since 2008
- The collapse of three US regional banks – First Republic Bank, Silicon Valley Bank, and Signature Bank – marked some of the largest failures in the banking system since 2008. Central banks contained the “mini-crisis” earlier this year with forced interventions and the mega-merger of Credit Suisse and UBS. Despite the interventions, global banks still axed the most jobs since the global financial crisis.
- A new report from the Financial Times shows twenty of the world’s largest banks slashed 61,905 jobs in 2023, a move to protect profit margins in a period of high interest rates amid a slump in dealmaking and equity and debt sales. This compared with the 140,000 lost during the GFC of 2007-08.
- “There is no stability, no investment, no growth in most banks — and there are likely to be more job cuts,” said Lee Thacker, owner of financial services headhunting firm Silvermine Partners.
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Important Takeaways:
- For example, between November 12th and November 18th, the sixth largest bank in the United States initiated filings to close 19 more local branches…
- America’s sixth-largest bank, PNC, has confirmed the closure of 19 more branches nationwide, following a staggering 203 branch closures earlier this year. This decision, aligning with the bank’s shift towards digital banking, is raising concerns among customers who prefer traditional banking methods
- During that exact same week, several other prominent banks made similar moves…
- JPMorgan Chase followed closely with 18 filings—three in Ohio, two each in Connecticut and South Carolina, and one each in 11 states, including New York, Illinois, Florida, and Massachusetts.
- Citizens Bank came in third with eight branch closure filings—six in New York, and one each in Massachusetts and Delaware. Minneapolis-based U.S. Bank filed for seven closures—three in Tennessee and one each in Missouri, Wisconsin, Ohio, and Illinois.
- Bank of America made five filings—two in New York and one each in Texas, Massachusetts, and California.
- Citibank filed for two branch closures, and Sterling, Bremer, First National Bank of Hughes Springs, Windsor FS&LA, and Aroostook County FS&LA made one filing each.
- Altogether, banks filed to shut down 64 branches.
- Unfortunately, even more trouble is coming for our banks because the real estate industry is a total mess right now.
- Existing home sales have fallen to depressingly low levels, and we just learned that new home sales in the U.S. dropped 5.6 percent last month
- Meanwhile, the commercial real estate crisis just continues to intensify.
- Just check out these new numbers that were released several days ago by Trepp…
- The volume of CMBS loans that are classified as delinquent increased by 49.4% during the 10 months through October to $27.91 billion. That volume amounts to 5.07% of the $601.98 billion universe tracked by Trepp. In contrast, delinquencies at the end of last year amounted to 3.03% of the $616.15 billion universe then extant
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Important Takeaways:
- Bank customers get a letter in the mail saying their institution is closing all of their checking and savings accounts. Their debit and credit cards are shuttered, too. The explanation, if there is one, usually lacks any useful detail.
- Or maybe the customers don’t see the letter, or never get one at all. Instead, they discover that their accounts no longer work while they’re at the grocery store, rental car counter or A.T.M. When they call their bank, frantic, representatives show concern at first. “Oh, no, so sorry,” they say. “We’ll do whatever we can to fix this.”
- But then comes the telltale pause and shift in tone. “Per your account agreement, we can close your account for any reason at any time,” the script often goes.
- These situations are what banks refer to as “exiting” or “de-risking.” This isn’t your standard boot for people who have bounced too many checks. Instead, a vast security apparatus has kicked into gear, starting with regulators in Washington and trickling down to bank security managers and branch staff eyeballing customers. The goal is to crack down on fraud, terrorism, money laundering, human trafficking and other crimes.
- In the process, banks are evicting what appear to be an increasing number of individuals, families and small-business owners. Often, they don’t have the faintest idea why their banks turned against them.
- Banks generally won’t say how often they are closing accounts this way, and they’re not tracking how often they get it wrong.
- By law, banks must file a “suspicious activity report” when they see transactions or behavior that might violate the law
- According to Thomson Reuters, banks filed over 1.8 million SARs in 2022, a 50 percent increase in just two years. This year, the figure is on track to hit nearly two million.
- Federal data on the types of SARs that banks file show what they worry about most. Last year, banks filing SARs tagged categories like suspicious checks, concern over the source of the funds and “transaction with no apparent economic, business or lawful purpose” most often, according to Thomson Reuters.
- To former bank employees, the bloodless data belie the havoc that banks wreak. “There is no humanization to any of this, and it’s all just numbers on a screen,” said Aaron Ansari, who used to program the algorithms that flag suspicious activity. “It’s not ‘No, that is a single mom running a babysitting business.’ “It’s ‘Hey, you’ve checked these boxes for a red flag — you’re out.’”
- What follow are profiles of customers who lost their accounts and an analysis of what behavior may have spurred their banks to shun them.
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Important Takeaways:
- Banks are bracing for a recession as Treasury yields surge
- Bank stocks might be on pace for yearly losses as sharply higher interest rates take a toll, but the industry’s reserves are at the highest level in three decades, according to DBRS Morningstar.
- Bank shares have come under more selling pressure since the Federal Reserve in September signaled it could keep rates higher for longer than earlier anticipated. The tough talk has dampened the year’s rally in stocks and reignited a dramatic selloff in the roughly $25 trillion Treasury market.
- “Right now, there is nothing standing in the way of higher Treasury yields,” Kathy Jones, chief fixed-income strategist at Schwab Center for Financial Research, told MarketWatch. “It’s fairly obvious it’s not good for banks. The rise in yields has just been relentless.”
- Higher yields on newly issued Treasury bonds erode the value of portfolios that include lower coupon debt issued when rates were lower. Banks also tend to hold large exposure to commercial property loans that could be difficult to refinance if rates stay higher for longer.
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Important Takeaways:
- BMO, Wells Fargo and USAA are latest banks to report layoffs
- Between April 2021 and July 2023, total employment in credit intermediation jobs, which include loan officers and tellers at depository institutions, fell by 45,000 to 2.67 million, according to census data.
- BMO, which has a large presence in California through its acquisition of Bank of the West earlier this year, recently informed Golden State officials about plans for 248 layoffs. All of the jobs affected are listed as being based in the Bay Area, though the numbers may include remote workers.
- Wells Fargo, meanwhile, informed Florida officials in July and August of its plans for 105 layoffs in Orlando. The bank did not provide details about the types of jobs being cut or the reasons for the layoffs
- USAA, which offers banking, insurance and investment products, informed Texas officials in July of plans for 235 layoffs. The company listed the jobs as being based in San Antonio, where USAA has its headquarters.
- Those layoffs were part of a larger plan by Morgan Stanley — reported in May by CNBC — to eliminate some 3,000 positions.
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Revelations 13:16-18 “Also it causes all, both small and great, both rich and poor, both free and slave, to be marked on the right hand or the forehead, so that no one can buy or sell unless he has the mark, that is, the name of the beast or the number of its name. This calls for wisdom: let the one who has understanding calculate the number of the beast, for it is the number of a man, and his number is 666.”
Important Takeaways:
- $30,000,000,000 Exits US Banking System in One Week As Deposit Flight Grows
- According to stats compiled by the Federal Reserve Economic Data (FRED) system, depositors yanked $30 billion out of American bank accounts from May 10th through May 17th.
- That represents an increase of more than $4 billion over the previous week.
- The US banking system now has a total of $17.15 trillion in deposits, compared to $18.03 trillion one year ago.
- The deposit flight follows the failures of three large regional banks – Signature Bank, Silicon Valley Bank and First Republic.
- According to a Federal Reserve report, more than 700 American banks are considered to be facing “significant safety and soundness risk” due to unrealized losses that exceed 50% of their capital.
- In the report, the Fed calls out its own interest rate hikes as the core reason those banks are now in a precarious position.
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Revelations 18:9-11 “The kings of the earth who committed fornication and lived luxuriously with her will weep and lament for her, when they see the smoke of her burning, 10 standing at a distance for fear of her torment, saying, ‘Alas, alas, that great city Babylon, that mighty city! For in one hour your judgment has come.’ 11 “And the merchants of the earth will weep and mourn over her, for no one buys their merchandise anymore
Important Takeaways:
- PacWest, Western Alliance crash as regional bank fears continue to shake markets
- PacWest and Western Alliance were also among the financial institutions, along with First Republic, that came under intense scrutiny following the March 10 and March 12 failures of Silicon Valley Bank and Signature Bank.
- Both lenders, like First Republic, lost a sizable amount of deposits during the first quarter as customers sought the perceived safety of larger banks or higher yields being offered by money market funds. PacWest, a lender based in Beverly Hills, Calif., lost 17% of its deposits and Phoenix-based Western Alliance lost 11%, while First Republic lost 41%.
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Revelations 18:9-11 “The kings of the earth who committed fornication and lived luxuriously with her will weep and lament for her, when they see the smoke of her burning, 10 standing at a distance for fear of her torment, saying, ‘Alas, alas, that great city Babylon, that mighty city! For in one hour your judgment has come.’ 11 “And the merchants of the earth will weep and mourn over her, for no one buys their merchandise anymore
Important Takeaways:
- Depositors drained another $126 billion from U.S. banks during the week ending March 22, according to new Federal Reserve data. This time the outflow came from the nation’s largest institutions.
- The biggest 25 banks lost $90 billion on a seasonally adjusted basis, according to the Fed. The smaller banks, which suffered massive withdrawals the previous week as regulators seized regional lenders Silicon Valley Bank and Signature Bank, were able to stabilize their outflows.
- The challenge the deposit outflows create for all banks is that if they raise rates on their deposits to keep customers, that could make them less profitable. But if they lose too many customers, as Silicon Valley Bank did, they give up critical funding and may have to sell assets at a loss to cover withdrawals.
- Silicon Valley Bank customers withdrew $42 billion in one day, leaving the bank with a negative cash balance of $958 million.
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