Blog

• A coalition of more than 100 mid-sized banks is calling for deposits to be insured for two years.
• The Mid-Size Bank Coalition of America asked regulators to extend protection, Bloomberg reported.
• It said action was needed to “restore confidence among depositors before another bank fails.” 

Federal regulators have been urged to protect all deposits for the next two years to prevent a wider run on banks following recent collapses, Bloomberg reported. 

The Mid-Size Bank Coalition of America, which represents more than 100 lenders, called on the Federal Deposit Insurance Corporation to put backstops in place and broaden its protection for smaller banks. 

“It is imperative we restore confidence among depositors before another bank fails, avoiding panic and a further crisis,” the MBCA wrote in a letter to regulators, per Bloomberg. 

The group said the FDIC should extend its cover to “reduce chances of more bank failures,” according to the outlet, which obtained a copy of the letter that was also sent to the Comptroller of the Currency, Treasury Secretary Janet Yellen and the Federal Reserve.

Only the first $250,000 in accounts are protected by the FDIC under existing rules.

The MBCA said the increased protection would stop the “exodus” of deposits from smaller banks and help “stabilize” the financial sector. 

If the FDIC did extend its insurance to all deposits for two years, banks could pay for it themselves by expanding the deposit-insurance risk assessment on lenders that chose to opt in, the MBCA suggested. 

The coalition also said that confidence has “eroded” in smaller banks and that more cash could be taken out of regional lenders if more banks failed, per the report.

Silicon Valley Bank and Signature Bank collapsed this month following a run by depositors, while First Republic Bank was bolstered by deposits to the tune of $30 billion from a number of bigger lenders. 

After taking control of SVB, regulators said they would “fully protect” all of its deposits in the bank.

The FDIC, OCC, Treasury and Federal Reserve all declined to comment to Bloomberg. 

• New research has found that working from home has created a boom in weekday golfing.
• While remote workers are hitting the green on weekday afternoons, productivity isn’t dropping.
• That’s good news for leisure businesses and shows remote work has changed people’s work structures.

“Don’t people have jobs? Why is it so busy out today?” one TikToker lip-syncs in a video while holding an iced coffee. The caption that reads, “Me, a 9-5 corporate working woman, at Sephora at 2:24 PM on a Thursday.” 

That TikToker is not alone, as anyone who’s had a friend or loved one working remotely can attest to. When work can be contained to a pocket-sized phone or a few jiggles of a mouse to prove you’re active, it can theoretically be done anywhere.

It’s turned the many American workers who are still in remote or hybrid roles into the professional version of college students: The days and afternoons are fair game for leisure or errands (or naps), and work can be done, much like a library all-nighter, during off-hours.

“The simple story is on work-from-home days, it’s a great opportunity to do things like go to the dentist, play golf, go shopping when it’s quiet,” Nick Bloom, a Stanford University economist whose research on remote work spans nearly 20 years, told Insider.

New research from Bloom and his colleague Alex Finan found that working from home created what they called “a huge boom in golfing.” Using car GPS data from Inrix and a map of 3,400 golf courses across the US, they were able to track when and how many people visited the greens from April 2019 to November 2022.

The results: More people were golfing overall, and the number of them doing it on weekday afternoons increased by 83% from August 2019 to August 2022. Wednesdays at 4 p.m. — right when workers are finally facing the back end of the workweek — was the peak time for weekday golfing. While the study focused solely on golf, the researchers said they believed people were likely using that time for other “leisure activities,” like going to the gym, playing sports, or shopping. 

While some companies have called employees back to the office, Bloom doesn’t think remote work is going anywhere. The share of work being conducted from home has fallen from its peak of roughly 60% in 2020 to roughly 27% today, Bloom’s research found. He said he expected it to stabilize around 25%.

All those remote workers hitting the green doesn’t necessarily mean people are working less. The “adult-student” economy could be a boon for services spending and for productivity.

“If employees remain productive, this indeed could be good,” Bloom and Finan wrote. “Golf courses are getting higher usage by spreading playing across the day and week, avoiding weekend and pre-, post-work peak loading. This will raise ‘Golf productivity’ — the number of golf courses played (and revenue raised) per course.”

Workers aren’t less productive than they were before the pandemic, according to the Federal Reserve Bank of St. Louis’ indicator. While labor productivity cooled off a bit in the first quarter of 2022 as the economy settled into its pandemic recovery, it grew in the last two quarters of 2022. Workers are working — just maybe not regular 9-to-5 hours.

Afternoons of leisure could end up being good for companies and a double-edged sword for workers

While not every afternoon golfer or shopper is working extra hours later to make up for it, Bloom’s research suggests many people are doing just that.

“We see work-from-home employees shift hours away from the working day when they work from home and into evenings and weekends,” he said, adding: “Much like students choose to spread work out — rather than just work 9 to 5 on Monday to Friday — employees are also choosing to spread work out.” 

Microsoft’s researchers dubbed it the “triple-peak day” after spotting an uptick in Microsoft Teams chats between 6 p.m. and 8 p.m. when the pandemic began. That’s in addition to the two traditional “productivity peaks” — before and after lunchtime.

This blurring of one’s work and personal lives might not leave all workers better off, though. Some have had a difficult time establishing work-life boundaries and are working more than they did when they were in an office. Of course, some workers have never had the luxury of working from home or are increasingly getting called back, meaning that they won’t get to experience weekday leisure.

US remote workers saved an average of 55 minutes by avoiding their daily commutes, a research paper Bloom coauthored found, but put some of this time saving toward work.

So that time on the golf course could be a double-edged sword, as any college student who’s partied on a weeknight can confirm: That hole in one might mean another hour working late.

“I think my colleague was taking his Zoom call from the golf course,” a tech executive in Palo Alto, California, told the researchers. “He was on mute and video off, but once when he was talking, I heard somebody talking about the fairway and strokes.”

Have you golfed, shopped, or done another leisure activity during work? We want to hear from you. Reach these reporters at jkaplan@insider.com and jzinkula@insider.com.

• Bill Ackman is sounding the alarm on Wall Street’s $30 billion show of faith in First Republic.
• The billionaire investor fears the move has put other banks at risk and could endanger the economy.
• Here’s why he’s worried and wants a temporary blanket guarantee on bank deposits.

Bill Ackman has warned that Wall Street’s rescue of First Republic threatens other banks, the financial system, and the US economy. Here’s a closer look at why he’s worried, and what he wants.

What’s going on?

JPMorgan, Bank of America, and nine other banks said on Thursday that they would make uninsured deposits totaling $30 billion in First Republic Bank (FRB) for at least 120 days.

Ackman cautioned that if FRB suffers a tidal wave of withdrawals and defaults on its debts, the Wall Street banks would be exposed and suffer losses as well.

The billionaire investor and Pershing Square chief argued the big banks’ show of faith hasn’t addressed the root problem — a lack of trust in the banking system.

Simply put, banks make money by taking their customers’ deposits and using them in two ways. They can lend the money out and collecting interest on the loans, or invest it in relatively safe assets such as US Treasuries and mortgage-backed securities.

As a result, they don’t keep the cash on hand — which makes it tricky if they have to satisfy a sudden surge of withdrawals.

Silicon Valley Bank collapsed last week because its money was tied up in long-dated bonds that had slumped in value due to rising interest rates, and a large number of its customers tried to pull out their money at the same time. 

The Federal Deposit Insurance Corporation (FDIC) took control of ailing SVB on Friday. Under a systemic risk exception, it agreed to insure deposits at both that lender and another, Signature Bank, on Sunday.

What could happen next?

FRB stock has tanked 70% since last Wednesday, as investors fear it could collapse as well. The San Francisco-based lender’s customer base has a similar profile and concentration to SVB’s, a high percentage of uninsured deposits, and substantial unrealized losses on its bond portfolio.

The bank has tried to assuage fears by securing access to $70 billion of liquidity from the Federal Reserve and JPMorgan, and agreeing to receive another $30 billion in deposits from its peers.

However, S&P Global and Fitch have both cut the lender’s credit rating to junk status, citing the risk of a wave of withdrawals.

Ackman described the Wall Street rescue as a “fictional vote of confidence,” and investors seem to agree as FRB shares were trading lower in premarket trading on Friday. He praised FRB as a healthy, well-run lender that shouldn’t be blamed for its current challenges.

“It is caught up in a bank run due to no fault of its own,” he said. “It does not deserve to fail.”

Ackman’s fear appears to be that bank runs will take down one lender after another, threatening the stability of the entire US banking system.

That could discourage banks from lending money, causing a credit crunch that could hurt consumers and businesses and hammer the entire economy.

“I am simply extremely concerned about financial contagion risk spiraling out of control and causing severe economic damage and hardship,” Ackman said.

“We need to stop this now,” he continued. “Tick-tock.”

“Three dominoes have fallen and another is on its way,” Ackman said in an earlier tweet, referring to Silicon Valley Bank, Signature Bank, and Silvergate. “Time is running short before the fire becomes a conflagration.”

What does Ackman want?

Ackman is urgently calling for a temporary, systemwide guarantee on all US deposits, as he believes that would shore up faith in lenders and discourage bank runs.

His longer-term solution is to raise the cap on deposit insurance from its current level of $250,000, and charge higher fees to less creditworthy banks to encourage them to act responsibly.