Presented by Apollo Global Management: Delivered daily by 8 a.m., Morning Money examines the latest news in finance politics and policy.
| | | | |  | | By Zachary Warmbrodt | Presented by Apollo Global Management | Editor’s note: Morning Money is a free version of POLITICO Pro Financial Services morning newsletter, which is delivered to our subscribers each morning at 5:15 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day’s biggest stories. Act on the news with POLITICO Pro. Republican lawmakers are all over the place when it comes to the turmoil underway in the banking industry. The latest reaction from the right: Sen. Ted Cruz announced late Thursday that he plans to investigate “Biden’s Big Tech Bank Bailout.” But one seasoned bomb-thrower is holding his fire and trying to head off an onslaught from his fellow conservatives: Patrick McHenry. The bow-tied North Carolinian made a name for himself by bashing the Bush and Obama bank bailouts. Now, he’s preaching restraint as the new chair of the Financial Services Committee. He says Biden administration officials have handled the situation well, and he was one of the first lawmakers on Thursday to throw his support behind the megabank rescue of First Republic. Wall Street loves it. “He’s a cool customer and he's a thoughtful person,” said one representative of a large bank. “We always appreciate when he weighs in on the debate because he plays it down the middle.” It may also give Democrats a glimmer of hope that there’s a top Republican they can talk to on big economic problems. “I worked with McHenry during this,” Senate Banking Chair Sherrod Brown says. “He seems to be responsible.” But it wasn’t always this way. Eleanor Mueller and your MM host talked to several players in McHenry’s orbit, and we report in a new piece how he transformed from an “extremely right-wing” upstart into someone who wanted to be “a serious conservative without being a jerk.” The big question in the days ahead is whether Republicans will follow his example. Some in the party are already chafing at the methodical approach he's taken this week. But McHenry’s allies say he's going down the right path at a precarious moment. "This isn't about poking either side of the aisle,” Rep, Blaine Luetkemeyer says. “This is a time when we feel our country's future is at risk here.” What’s the next shoe to drop? — Please send tips to zwarmbrodt@politico.com.
| | | | A message from Apollo Global Management: Every day at Apollo, we work to lead responsibly and drive positive impact across our workplace, marketplace, and in our communities. As a leading high-growth alternative asset manager, Apollo is at the forefront of innovation, leveraging its full platform to empower retirees, build and finance stronger businesses, and drive a more sustainable future. Apollo is investing in tomorrow, today. Discover more | | | | | | Coming soon: SVB hearings — Several sources told MM that House Financial Services is considering multiple hearings on the bank crisis later this month. Stay tuned. Big banks to the rescue — Eleven of the biggest U.S. banks agreed to deposit $30 billion at the troubled First Republic to keep the lender afloat. Reuters reports that the deal involved talks between Treasury Secretary Janet Yellen, Fed Chair Jerome Powell and JPMorgan Chase CEO Jamie Dimon, with Sullivan & Cromwell senior chair Rodgin Cohen playing a key role. U.S. stocks rallied on the news, with the S&P 500 up by 1.7 percent. Fed reveals rush of bank aid — Bloomberg reports that banks borrowed $164.8 billion from two of the Fed’s backstop programs over the past week, including a record $158.3 billion from the discount window. Banks tapped $11.9 billion from the new emergency facility that the Fed established Sunday. Another Bloomberg piece looks at how corporate executives unnerved by the wobbly financial system are “yanking money from their banks and depositing it at other lenders, moving it to money market funds, or buying Treasury bills directly.” The FT says U.S. money market funds had $120 billion of net inflows in the week ending Wednesday, the largest shift since June 2020. Small banks denounce Yellen comments — The Independent Community Bankers of America is rebuking part of Yellen’s Senate testimony Thursday in which she explained that only banks deemed by regulators to be a systemic risk would have all their deposits guaranteed. The ICBA’s response is part of an effort by the group to promote the safety of small banks and distance them from larger competitors after the failure of SVB and Signature. ICBA president and CEO Rebeca Romero Rainey called the policy “a bailout for big banks that rewards mismanagement and risky behavior to the detriment of community banks and the communities they serve.” Yellen tried to assure senators at the hearing that “Americans can feel confident that their deposits will be there when they need them.”
| | | | STEP INSIDE THE WEST WING: What's really happening in West Wing offices? Find out who's up, who's down, and who really has the president’s ear in our West Wing Playbook newsletter, the insider's guide to the Biden White House and Cabinet. For buzzy nuggets and details that you won't find anywhere else, subscribe today. | | | | | | | | ECB sticks to rate hikes —The European Central Bank raised interest rates by half a percentage point Thursday, opting to keep fighting inflation amid the bank crisis. Exclusive: Warren, Brown press the Fed on its own workers — Sens. Elizabeth Warren and Sherrod Brown in a new letter urged food service giant Sodexo to ensure that its employees who work at the New York Fed cafeteria are paid a “livable wage.” They also pressed the regional Fed’s chief, John Williams, “to utilize all tools at its disposal as Sodexo’s client to guarantee these workers a fair and just contract.” ICYMI, those workers earlier this month authorized a strike alongside other employees represented by Unite Here Local 100. Sodexo and Unite Here Local 100 head to the bargaining table today.
| | | | DOWNLOAD THE POLITICO MOBILE APP: Stay up to speed with the newly updated POLITICO mobile app, featuring timely political news, insights and analysis from the best journalists in the business. The sleek and navigable design offers a convenient way to access POLITICO's scoops and groundbreaking reporting. Don’t miss out on the app you can rely on for the news you need, reimagined. DOWNLOAD FOR iOS– DOWNLOAD FOR ANDROID. | | | | | | | | First look: Green groups challenge ag complaints about Scope 3 – Declan Harty reports that Earthjustice, Greenpeace USA and more than a dozen other organizations are pushing back on complaints that the SEC’s climate risk disclosure proposal could ensnare small farmers and ranchers. The groups said in a letter to the agency that the requirement for certain public companies to disclose carbon emission data about their suppliers and customers, known as Scope 3, is more flexible than critics say and could benefit some agricultural producers.
| | | | A message from Apollo Global Management:   | | | | | | Trade group investigates crypto ‘de-banking’ – The Blockchain Association said it submitted FOIA requests to the FDIC, Fed and OCC seeking documents and communications related to actions that may have discouraged banks from serving digital asset customers. The group is also asking industry participants to share their stories confidentially if they’ve been affected. But New York Magazine reports that crypto firms are starting to find a home for their money at JPMorgan Chase and "certain other 'too big to fail' banks."
| | | Peter Thiel left $50M of his personal cash in SVB – FT: “Peter Thiel said he had $50mn in Silicon Valley Bank when it went under, even after his venture fund warned portfolio companies that the tech-focused lender was at risk.” France hikes its retirement age – WSJ: “French President Emmanuel Macron’s government bypassed Parliament and invoked special constitutional powers on Thursday to raise the country’s retirement age, a step that places him at odds with France’s legislative branch and millions of protesters.” Why Biden’s TikTok ban might fail – WaPo: “it will likely face all the same challenges that doomed President Donald Trump’s bid in 2020, during which federal judges ruled the government had not provided proof that the app, which has more than 100 million U.S. users, presented enough of a national security risk to outweigh Americans’ First Amendment rights to free expression.”
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