Aurelia Butler

(Reuters) -Responsibility for the Federal Reserve’s oversight of large financial institutions like the failed Silicon Valley Bank rests with staff in Washington and not with any regional Fed bank chief, a former chair of the San Francisco Fed bank said on Friday.”I do not believe that (San Francisco Fed Bank President) Mary Daly is responsible for the regulatory mishaps in the SVB situation,” said Alex Mehran, who served on the San Francisco Fed’s board of directors for six years including two as its chair. “The responsibility for enforcing those regulations is not the purview of the (Reserve Bank) president, it’s the purview of the regulators in Washington.”SVB’s sudden demise two weeks ago is under intense scrutiny, and Democratic U.S. Senator Elizabeth Warren said she does not have faith in Daly after the collapse. Next week, lawmakers in both houses of the U.S. Congress hold public hearings on the issue, and have called Fed Vice Chair of Supervision Michael Barr to testify. Barr is heading up a Fed review of the situation, due to be published May 1. Supervision of large banks like SVB, which was the 16th biggest U.S. bank at the time of its failure, is a shared responsibility of bank examiners employed by the regional Fed bank and Fed Board staff in Washington. Fed Chair Jerome Powell said this week he wants to identify “what went wrong here”. Bank examiners at San Francisco Fed had flagged escalating problems at the Santa Clara-based bank suggesting issues with its ability to meet short-term cash needs like depositor withdrawals. Federal regulators closed SVB on March 10 after it was unable to meet rapid and massive demands from depositors for their money. That was soon followed by closure of Signature Bank (NASDAQ:SBNY) and emergency action by the Fed and the Treasury to shore up confidence in the banking sector. The fallout has continued, with UBS buying rival Credit Suisse, big U.S. banks staging a rescue of smaller First Republic, and banking shares under continued pressure. Republicans on the Senate Banking committee this week asked Daly and Powell for internal records on oversight of the bank, including Daly’s own calendar. As San Francisco Fed chair, Mehran headed the search committee that hired Daly for the top job at the bank in 2018. Reserve bank directors do not have a role in supervision or regulation. More

WASHINGTON (Reuters) -The multi-regulator U.S. Financial Stability Oversight Council agreed on Friday that the U.S. banking system remains “sound and resilient” despite stress on some institutions, the U.S. Treasury said in its latest statement to calm jittery markets and bank depositors.In a readout of a closed meeting chaired by Treasury Secretary Janet Yellen, the department said that FSOC participants heard a presentation on market developments from the staff of the Federal Reserve Bank of New York. “The Council discussed current conditions in the banking sector and noted that while some institutions have come under stress, the U.S. banking system remains sound and resilient,” the Treasury said in a statement.The videoconference meeting came as markets continued to seesaw amid concerns that a two-week-old banking crisis sparked by the failures of Silicon Valley Bank and Signature Bank (NASDAQ:SBNY) could worsen, spreading more runs on smaller banksThe body of financial regulators, led by Yellen and including the heads of the Federal Reserve, the Federal Deposit Insurance Corp (FDIC), the Office of the Comptroller of the Currency, the Securities and Exchange Commission and other regulatory agencies, last met on March 12.That was the same day that the FDIC, Fed and Treasury announced emergency actions to backstop all deposits in the two failed banks and create a new Fed lending facility to boost liquidity for all banks. Two prominent House of Representatives Republicans on Friday demanded that Yellen provide them with additional information about the March 12 meeting, including unredacted minutes, votes, details on timing and bank stress test results.”The events that have transpired over the last 12 days related to both Silicon Valley Bank and Signature Bank, the ensuing market instability, and your role raise a number of questions for policymakers,” wrote Representatives Bill Huizenga and Andy Barr who chair House Financial Services subcommittees, in a letter to Yellen. They added that the basis of the Treasury, Fed and FDIC determinations in the SVB and Signature cases “are of particular importance.”The Friday FSOC meeting came as global banking contagion fears again caused European bank stocks to fall sharply, with Deutsche Bank (ETR:DBKGn) and UBS knocked by worries that regulators and central banks have not yet contained the worst shock to the sector since the 2008 global financial crisis.But on Wall Street, shares recovered from an earlier sell-off as three Federal Reserve bank presidents said in separate remarks that there was no indication that financial stress was worsening this week, allowing them to raise interest rates by a quarter percentage point.Yellen again sought to calm fears of further bank deposit runs on Thursday, telling U.S. lawmakers that she was prepared to repeat actions taken in the Silicon Valley and Signature Bank failures to safeguard uninsured bank deposits if failures threatened more deposit runs.Those actions to invoke “systemic risk exceptions” were taken by Yellen, President Joe Biden, the FDIC, and the Fed, which supervised Silicon Valley and Signature. More

The reorganization, expected to be announced soon, would mean those working on manufacturing engineering would be asked to relocate to central Illinois or its headquarters in Irvine, California, according to the WSJ report.”In terms of ramping production, it’s helpful to have the manufacturing and engineering teams closer to our facilities in Normal as well as our headquarters in Irvine,” a Rivian spokesperson told Reuters, but declined to confirm if the company was relocating teams.Rivian, which makes R1T electric pickup trucks and R1S SUVs at its factory in Normal, Illinois, in February forecast 2023 production below analysts’ expectations as it grapples with lingering supply chain snarls.The electric-vehicle maker has been losing money on every vehicle it builds, and narrowly missed its annual production target of 25,000 units last year.Investors have been unnerved by weakening demand for EVs as interest rate hikes and fears of a looming recession creep in. More

Britain’s oil and gas companies are next week expected to be offered the prospect of windfall tax relief, as prime minister Rishi Sunak looks to boost investment and improve the country’s energy security.Ministers have been discussing with the sector a promise that the 35 per cent windfall levy on profits would cease to apply if energy prices fell below a specified “normal” long-term level.Officials close to the negotiations say Jeremy Hunt, the chancellor, is open to the idea because it would provide tax certainty to a sector that is being encouraged to invest in new energy projects.Sunak will set out a range of measures to boost Britain’s energy security and to help meet net zero targets next week at what Whitehall has dubbed “Green Day”.But Sunak’s allies insist the event should be called “energy security day”, an indication that the package will also include measures to boost oil and gas production in the North Sea. “It’s not Green Day,” said one.There is speculation in the industry that Sunak could launch the package in Aberdeen, the capital of the UK oil industry, although his allies insisted it had not been decided where the event will take place.Oil and gas companies have long argued hydrocarbons in the North Sea have a key role in Britain’s “transition” to net zero and in providing energy security.The industry has been pushing hard to limit the effect of the windfall tax — or energy profits levy — which was last May set at 25 per cent and contained a provision that it would switch off if energy prices dropped. Hunt announced last November that the tax would rise to 35 per cent and apply until 2028, even if energy prices fell sharply. Wholesale oil and gas prices have declined sharply in recent months, with Brent crude trading near $75 a barrel — roughly the level it was in late 2021, prior to Russia’s invasion of Ukraine. UK natural gas prices are still elevated compared to historic norms but are less than a quarter of their peak last August. People briefed on discussions between industry and the Treasury said Hunt was looking at a price floor so that the levy would not apply if energy prices fell below a certain level. The Treasury declined to comment.“We hope the government’s anticipated energy day will encourage growth, boost jobs, cut emissions and protect our energy security,” said David Whitehouse, chief executive of Offshore Energies UK, the industry body.“We need government to confirm its continued support for UK oil and gas production and provide clarity on the price floor for the energy profits levy.” He said this would give companies confidence to invest.The government said it would “set out further action later this month to ensure energy security in the UK”, adding that the windfall tax was already designed to encourage reinvestment of profits. The “energy security day” is also expected to be the moment the government rewrites its net zero strategy after a judge ruled last summer — in a case brought by the Good Law Project and environmental campaigners — that the previous version was insufficiently detailed.Several departments are refreshing their net zero policies ahead of next week. For example the transport department is poised to announce that a certain proportion of cars sold in the UK must be electric vehicles under a new initiative called the “EV mandate”. It has also drawn up a new plan to encourage the production of sustainable aviation fuel, perhaps through a new subsidy system. Other policy areas under review include a Green Finance Strategy which could include accelerating the issuance of green gilts and new incentives for more “green mortgages” provided to energy efficient homes. More