Federal lawmakers “released a blitz of competing coronavirus relief proposals Tuesday, reigniting stalled talks but without any clear signs that Democratic and Republican leaders would be able to reach a consensus,” the Wall Street Journal reported. “A bipartisan group from the House and Senate unveiled a roughly $900 billion compromise proposal, offering one route between House Democrats’ last $2.4 trillion bill and Senate Republicans’ recent $650 billion proposal.”
Meanwhile, “Senate Majority Leader Mitch McConnell circulated a new plan to his caucus that he said reflected what President Trump would be willing to sign into law in the waning days of his administration, after speaking with White House officials. In another sign of the new urgency, House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin held their first phone conversation since the election on relief measures and spending legislation.”
The bipartisan proposal, “led by Mark Warner, the Virginia Democrat, and Susan Collins, the Maine Republican, reflects the growing anxiety in Washington over the state of the economy,” the Financial Times said. “Negotiations on a new stimulus package faltered prior to the November election and have not resumed.”
Sen. Mark Warner, D-Va., wears a protective mask while speaking to members of the media at the Capitol in Washington on Dec. 1, 2020.
Stefani Reynolds/Bloomberg
Separately, Mnuchin and Fed Chairman Jerome Powell, in a joint appearance before the Senate Banking Committee, expressed their differing views on stimulus. Mnuchin defended his Nov. 19 decision to end several credit facilities with the Fed because “he believed he lacked the authority to do so,” a move that “drew a rare objection from the Fed,” the Journal said.
“My motivation was not political. It was purely legal,” Mnuchin said. “If you want to extend this, bring back legislation that would authorize me to do it.”
“Any central banker would tell you it’s premature to be pulling back support for the economy,” Powell said.
The hearing “revealed diverging opinions on the state of the recovery and how to keep it going” among the senators present, the Washington Post reported. “Support for the emergency lending facilities set up at the start of the pandemic has waned among Republicans who say it’s time to phase out the programs. By contrast, Democrats say cutting them off too soon jeopardizes the economic recovery.”
Meet the team
Meanwhile, Janet Yellen was introduced by President-elect Biden as his nominee for Treasury secretary, and she made no bones about where she stood on the issue, warning against “more devastation” if additional fiscal stimulus isn’t enacted, according to the Financial Times.
Incoming Citigroup CEO Jane Fraser “is resolutely upbeat about what she must do, even when it comes to the ‘consent order’ slapped on Citi by its top regulators in the U.S.,” the FT says in a lengthy interview. “This, along with the $400 million fine, was one of the toughest penalties ever handed down in such a situation and requires a costly and far-reaching overhaul of the bank’s sprawling risk and operations systems.”
“Never miss the opportunities afforded by consent orders to really galvanize an organization,” Fraser said, noting that the orders will “accelerate” actions the bank already had planned.
Filippo Alloatti, a senior credit analyst at Federated Hermes, told the FT that the weakest banks have been the biggest beneficiaries. “The worse a bank is, the more disproportionately it benefits from this type of macro event,” he said.
The Chicago-based bank, which failed Friday in the first bank failure of 2025, caused a $28.5 million hit to the Deposit Insurance Fund. The FDIC was appointed receiver and Millennium Bank will assume all deposits.
The Providence, Rhode Island-based company launched its private bank in 2023 after a spate of bank failures left holes in the market. "It's not like I'm asking anybody to wait for delayed gratification," CEO Bruce Van Saun said Friday.
Citing concerns about going outside its statutory mandate, the Federal Reserve Board of Governors voted to leave the Network of Central Banks and Supervisors for Greening the Financial System.
Organizations that represent Amazon, Apple, Meta, PayPal, OpenAI and many other large technology companies accuse the consumer watchdog, which has given itself authority over companies that facilitate at least 50 million consumer payment transactions per year, of regulatory overreach.
Wakefield, Massachusetts-based The Savings Bank named Raichelle Kallery as its president and CEO; Los Angeles-based Banc of California is donating $1M to launch a recovery fund in response to the wildfires devastating Southern California; Amazon agreed to acquire the Bengaluri-based fintech Axio; and more in this week's banking news roundup.
