The Federal Deposit Insurance Corp (FDIC) is reportedly considering directing a significant portion of the costs related to recent bank failures towards big banks. The FDIC is facing around $23bn in costs related to the recent collapses of Silicon Valley Bank and Signature Bank, which have reportedly left the deposit insurance fund set to take hits. Officials are believed to be looking at limiting the strain on community lenders by shifting a sizeable portion of the expense towards much larger institutions, some of whom could already face multi-billion-dollar bills. This approach is being seen as the most politically acceptable option. Questions have been raised about who will pay for the failures, particularly after a decision to backstop all of the banks' deposits. These moves saved tech start-ups and wealthy customers, whose balances far exceeded the FDIC's typical limit on coverage. Talks about the size and timing of an assessment are in the early stages.
FDIC Considers Forcing Big Banks to Pay Up After $23 Billion Hit
A proposed new rule change for the management of multidistrict litigation proceedings (MDLs) has been met with a lukewarm reception from plaintiffs' attorneys. The proposed new Rule 16.1 outlines procedures for an initial management conference and advises the court to order parties to meet and provide a report before the first management conference. It also allows the court to enter a management order that controls the proceedings. However, some plaintiffs' attorneys have questioned the need for new rules, saying that judges already have the tools to manage mass litigation effectively. They also argue that the proposed rule would replace judicial education with rigid standards, limiting the creativity of judges and parties to craft orders and procedures. Defense attorneys have also criticized the proposal for ignoring real problems with MDLs, such as appointing leaders and ensuring adequate representation of all plaintiffs. Some have said that MDL judges prefer to avoid rules with teeth to force settlement rather than engaging in pre-trial proceedings. The proposed rule is currently open for public comment, pending approval from the Judicial Conference’s Standing Committee in June.
Multidistrict Litigation Rules Proposal Gets Chilly Reception
The Senate has approved a Republican-led resolution to overturn President Biden's “Waters of the US” (WOTUS) rule that expanded the definition of bodies of water protected by the Clean Water Act. The House had earlier passed a similar resolution. Neither chamber's vote was large enough to override a presidential veto, which the White House has confirmed will happen. The Biden rule essentially reinstated an Obama-era regulation that gave a broader definition of navigable waters and wetlands, which are subject to federal environmental protections. The interpretation of what qualifies as a body of water has been debated for 15 years, with the definition being narrowed or expanded according to the administration in power. Republican lawmakers argue that the WOTUS rule unfairly penalizes Americans and hinders growth. Democrats argue that the resolution will only increase uncertainty over water regulation, threatening the economy, agriculture, and clean water. The Supreme Court is expected to rule on the issue this year. Republicans have introduced a bill that would narrow the WOTUS regulation by excluding rain-induced "ephemeral waters" and other small waterways from federal jurisdiction under the Clean Water Act.
Senate Reverses Biden Water Rule, Courts White House Veto (1)
A New York grand jury investigating former President Donald Trump's alleged role in a hush-money payment to Stormy Daniels is expected to take a pre-scheduled break in April and is not expected to reconvene on the matter until after Easter. If indicted, Trump, who denies an affair took place, would become the first U.S. president to face a criminal charge in court. Trump faces several other criminal investigations, including one tied to the Jan. 6, 2021, assault on the U.S. Capitol by his supporters. He maintains his false claims that his 2020 defeat was the result of fraud.
N.Y. grand jury probing Trump to break for most of April -reports | Reuters
In the U.S. District Court, Eastern District of New York, Prosecutors have requested that US criminal charges be dropped against two former SocGen bankers for allegedly trying to rig the London interbank offered rate (LIBOR). The former head of SocGen Treasury desk in Paris and her boss were charged in 2017 with preparing inaccurate Libor submissions in 2010 and 2011. The US Attorney did not provide reasons for the request to dismiss the case.
By way of very brief background, the LIBOR scandal refers to the manipulation of the London Interbank Offered Rate (LIBOR), a benchmark interest rate used in financial markets around the world, by a number of major banks. The scandal broke in 2012 when it was discovered that traders at banks including Barclays, UBS, and Deutsche Bank had colluded to manipulate the LIBOR rate, artificially inflating or deflating it in order to benefit their trading positions. LIBOR was supposed to reflect the interest rate that major banks in London charged each other for short-term loans. It was used as a benchmark rate for financial products such as mortgages, loans, and derivatives. The rate was set daily by a panel of banks, and it was supposed to represent the average interest rate at which banks could borrow money from one another. However, the scandal revealed that some of the banks on the panel were manipulating the rate to benefit their own trading positions and profits, leading to a loss of trust and credibility in the financial industry. The banks were fined billions of dollars by regulators and faced public backlash, leading to reforms of the benchmark rate-setting process. The scandal highlighted broader issues of misconduct and lack of accountability in the financial industry.
U.S. prosecutors move to drop Libor case against ex-SocGen bankers | Reuters
