Latest news with #depositors
Bloomberg
5 days ago
- Business
- Bloomberg
Chinese Banks Face Liquidity Test on Deposit Exodus, Maturities
Chinese banks are set for a liquidity test in June as they face record debt maturities and a potential exodus from deposits. The lenders are on the hook to repay a record 4.2 trillion yuan ($583 billion) of negotiable certificates of deposit, which are short-term debt instruments, next month. That comes at a time when regular savings deposits are shrinking as interest rate cuts prompt investors to turn to products with higher returns, with some analysts projecting the withdrawals to reach trillions of yuan.
Bloomberg
26-05-2025
- Business
- Bloomberg
Ring-Fencing Was a Good Idea That UK Banking No Longer Needs
UK banks want the government to abolish a key piece of post-financial crisis regulation that forces them to keep ordinary depositors' money legally separate from their trading and investment-banking business. This uniquely British setup, known as ring-fencing, limits the kind of lending banks can do and raises their costs. Well, most lenders don't like it. Barclays Plc alone is happy with the rules, which may be because it is uniquely placed to benefit from any protections they afford. I was always a big supporter of the idea behind this separation, but I'm no longer convinced the setup achieves much at all — for depositors or for Barclays.
Bloomberg
20-05-2025
- Business
- Bloomberg
US Set to Hit Deposit Insurance Fund Target Ratio by End of 2025
The US government's bedrock fund meant to protect depositors in the event of a bank failure is poised to reach its legal target ratio by the end of 2025 — about three years ahead of schedule. The Federal Deposit Insurance Corp., which manages the fund by levying assessments on banks, is required by law to ensure the pool of money meets a reserve ratio of at least 1.35%. At the end of 2024, the agency said the balance stood at $137.1 billion and had reached a reserve ratio of 1.28%.
New York Times
17-05-2025
- Business
- New York Times
Capital One to Pay $425 Million to Settle Suits Over Savings Accounts
Capital One agreed to pay a $425 million settlement after it faced nationwide litigation accusing it of cheating savings depositors out of higher interest rates by failing to advertise higher-yield accounts, according to a federal court filing. The preliminary settlement, which is pending a judge's approval, was filed in a notice on Friday in the U.S. District Court for the Eastern District of Virginia. Depositors who sued the bank said that Capital One falsely promised higher interest rates on 360 Savings accounts, which had a fixed rate of 0.3 percent, and did not adequately advertise its better rates on 360 Performance Savings accounts. The higher-yield account had an interest rate that was as high as more than 4 percent, according to the suit. As a part of the settlement, $300 million will go to depositors to make up for the interest they would have earned in the higher-yield account. The remainder of the settlement will go to depositors with open 360 Savings accounts as additional interest. Legal fees will also be paid out of the settlement. As a part of the agreement, Capital One admitted no wrongdoing. Representatives for Capital One and several lawyers for the plaintiffs did not immediately respond to requests for comment on Saturday. The litigation in Virginia was combined from several separate lawsuits across the country. On Wednesday, Letitia James, the New York attorney general, sued Capital One on behalf of depositors in her state for failing to notify 360 Savings account customers, who faced 'artificially low' rates, that they could have switched to the account with better interest rates, according to a news release. 'Capital One assured high returns with no catches, then pulled the rug out from under their customers and hoped nobody would notice,' Ms. James said in the news release. 'Big banks are not allowed to cheat their customers with false advertising and misleading promises.' The suit brought by Ms. James was not subject to the settlement filed on Friday. Capital One said it would defend itself in court and rejected her claims. The Consumer Financial Protection Bureau similarly sued the bank at the close of President Joseph R. Biden Jr.'s term in January, arguing that Capital One cheated consumers out of more than $2 billion in interest payments. The Trump administration has since dropped that case.
