By David Lawder

WASHINGTON (Reuters) – The U.S. nominee to lead the World Bank, former Mastercard CEO Ajay Banga, returns to his native India on Thursday, capping a three-week global tour to drum up support and discuss development and climate needs with donor and borrowing countries.

The Treasury said Banga will visit New Delhi on March 23 and 24, where his likeness has already been posted on billboards. He will meet with Prime Minister Narendra Modi as well as the minister of finance, Nirmala Sitharaman, and the minister of external affairs, Subrahmanyam Jaishankar.

“These discussions will focus on India’s development priorities, the World Bank, and global economic development challenges,” the Treasury said in a statement.

India’s government endorsed the candidacy of Banga, a longtime finance and development executive who is now a U.S. citizen, soon after his nomination was announced in late February.

He has won the support of enough other governments to virtually assure his confirmation as the next World Bank president, including Britain, France, Germany, Italy, Japan, Bangladesh, Colombia, Egypt, Ivory Coast, Kenya, Saudi Arabia and South Korea.

The World Bank will accept nominations from other countries until March 29, but no competitors have been announced. The World Bank has been led by an American since its founding at the end of World War Two, while the International Monetary Fund has been led by a European.

U.S. President Joe Biden last month nominated Banga, 63, to replace David Malpass, who announced his resignation after months of controversy over his initial failure to say he backed the scientific consensus on climate change.

In India, Banga will also visit a vocational skills development institute funded in part by the World Bank, the Treasury said.

Over the past month, Banga has met with government officials, civil society groups, business leaders and other stakeholders on a “global listening tour” that started in Africa before progressing to Europe, Latin America and Asia.

(Reporting by David Lawder; Editing by Leslie Adler)

By Dietrich Knauth

(Reuters) – Bankrupt crypto exchange FTX has reached a deal to recover more than $400 million in cash from hedge fund Modulo Capital, pulling back 97% of the money that FTX companies sent to the hedge fund in 2022, according to court documents filed on Wednesday.

Bahamas-based Modulo agreed to pay $404 million in cash and give up its claim to $56 million in assets held on FTX’s crypto exchange, according to a filing in U.S. bankruptcy court in Delaware.

FTX filed for bankruptcy protection in November, saying it was unable to completely repay customers who had deposited funds on its exchange. FTX’s new CEO, John Ray, has said his top priority was recovering assets to repay FTX customers.

FTX’s affiliated hedge fund Alameda Research sent $475 million to Modulo in a series of transfers beginning in May 2022, a time when FTX was losing money and heading toward bankruptcy, according to the court filings.

Alameda, at the direction of FTX founder Sam Bankman-Fried, had paid $25 million to acquire a stake in Modulo and contributed $450 million to an investment fund managed by Modulo, according to the filings.

The settlement recovers most of those payments and takes 99% of Modulo’s remaining assets, according to the filings.

FTX and Alameda will give up their claim to any ownership of Modulo as part of the settlement. FTX also agreed to not take further actions against Modulo or its principals Xiaoyun Zhang and Duncan Rheingans-Yoo related to the 2022 payments, according to the filings.

FTX, Bankman-Fried, and Modulo Capital did not immediately respond to requests for comment.

FTX has previously recovered more than $5 billion in its quest to repay customers of the bankrupt crypto exchange. FTX said last week that it was investigating more than $3.2 billion that was transferred out of the company through payments and loans to company founders and key employees.

Bankman-Fried has been charged with stealing billions of dollars in FTX customer funds to cover losses at Alameda Research, and making tens of millions of dollars in illegal political donations to buy influence in Washington, D.C.

He denies wrongdoing and is fighting to stay out of jail pending his scheduled Oct. 2 fraud trial.

(Reporting by Dietrich Knauth; Editing by Alexia Garamfalvi and David Gregorio)

By David Lawder and Douglas Gillison

WASHINGTON (Reuters) -The brewing U.S. banking crisis seems far removed from the northeastern Vermont town of St. Johnsbury, but local Passumpsic Bank executive Daniel Kimbell grew concerned when he heard U.S. Treasury Secretary Janet Yellen’s congressional testimony last week.

Yellen told a U.S. Senate hearing on March 16 that uninsured deposits would only be guaranteed in banks deemed a contagion threat, raising fears that banks like Passumpsic, with $900 million in assets, might see business deposits above the $250,000 insurance limit flee for perceived safety to far larger institutions.

“A lot of us were kind of offended at what had come out, that the Treasury was going to guarantee all of the deposits for the larger banks — the too-big-to-fails — and us smaller banks were going to be on our own,” Kimbell told Reuters at an American Bankers Association conference in Washington.

While big banks have dominated headlines, the country’s 4,258 community banks, which are more risk-averse, account for more than 90% of all chartered banks.

They held just 11% of the $23.6 trillion in U.S. banking assets at the end of 2022, but nearly half are chartered in counties with populations of 50,000 or less, making them a key source of capital for small-town America and minority urban communities alike.

Yellen, President Joe Biden and the Federal Reserve and Federal Deposit Insurance Corp boards had invoked “systemic risk exceptions” after the failures of California’s Silicon Valley Bank and New York’s Signature Bank that allowed them to protect uninsured deposits, including those of wealthy technology executives and cryptocurrency investors.

Yellen on Tuesday shifted her emphasis, vowing to safeguard deposits at smaller banks and saying that the Treasury and regulators were prepared to intervene if further deposit runs threaten more banking contagion.

On Wednesday, she clarified that this would not include a swift government move to grant “blanket insurance” on all U.S. bank deposits without Congressional approval, but said that depositors in community banks, just like those in larger institutions, may qualify for systemic risk protections if those banks’ failures could spark contagious bank runs.

Her comments marked a shift in emphasis to include community banks that were not mentioned in her earlier testimony.

“The community banks in this country, we know, are strong and resilient. And I think banks need to reassure their customers, that they are strong and resilient, and the government needs to do exactly the same thing,” Yellen said.

Kimbell, who heads wealth management at Passumpsic Bank, said her reassurances “took the anxiety out of the room” over deposits, which was shared by banks large and small.

The chairman of the Independent Community Bankers Association said that member banks have not reported widespread withdrawals in response to the SVB and Signature failures, partly because the institutions are closely tied to their local markets.

“The community banks we’re talking to just aren’t seeing the negative reaction from our customers,” said Derek Williams, CEO of Century Bank & Trust Co in Milledgeville, Georgia.

Yellen’s shift to include community banks “was certainly better, it was an attempt for her to kind of restate what she was saying and acknowledging the importance of the community banks,” Williams said. She “gave the impression” that the government would step in to protect depositors, he added.

Community banks play an important political role. There are often dozens of such institutions in every congressional district, and the Biden White House is concerned about further consolidation in financial services. They were a key pillar in COVID-19 pandemic programs to keep small businesses afloat and their employees paid during health lockdowns.

(Reporting by David Lawder and Douglas Gillison; additional reporting by Pete Schroeder; Editing by Heather Timmons, Jonathan Oatis and Leslie Adler)

By Nandita Bose, Lananh Nguyen and Saeed Azhar

NEW YORK (Reuters) -JPMorgan Chief Executive Jamie Dimon met Lael Brainard, the director of the White House National Economic Council on Wednesday, while in Washington this week, according to a person familiar with the situation.

The meeting agenda was unclear.

Brainard met with a range of business leaders including Dimon, part of a series of meetings she has had over the last month with business, labor, advocacy, and academic leaders, the source said.

The meeting comes as First Republic Bank’s efforts to secure a capital infusion continued on Wednesday, as the troubled regional lender started to plan for the possibility it may need to downsize or get a government backstop.

The CEOs of major banks gathered in Washington for a two-day meeting which started on Tuesday, sources familiar with the matter previously said.

The quarterly meeting of the Financial Services Forum included Dimon and Bank of America Corp CEO Brian Moynihan, who head the nation’s two largest lenders, the sources said.

The banks were aiming to work out details for what needs to be done for First Republic within the coming 24 hours, another source said.

Eleven lenders, including the eight members of the Financial Services Forum, threw First Republic a lifeline of a combined $30 billion in deposits last week.

Major banks and private equity firms have so far balked at offering First Republic the capital infusion it craves for fear of releasing losses on the bank’s loan book and investment portfolio amid a rise in interest rates.

On Tuesday, Reuters reported First Republic is examining how it can downsize and sell parts of its business, including some of its loan book, in a bid to raise cash and cut costs.

(Reporting by Lananh Nguyen and Saeed Azhar in New York and Nandita Bose in Washington; editing by Megan Davies, Jonathan Oatis and Anna Driver)

(Reuters) -The U.S. Securities and Exchange Commission (SEC) has threatened to sue Coinbase Global Inc over some of the crypto exchange’s products, turning up the heat on the largely unregulated sector.

Shares of Coinbase dropped nearly 13% to $67.33 in extended trading after the company said on Wednesday that the regulator had issued it a Wells notice – a formal declaration that SEC staff intend to recommend an enforcement action.

The potential enforcement actions would be tied to aspects of Coinbase’s spot market as well as its Earn, Prime and Wallet products, the company said.

The SEC has been ratcheting up efforts to crack down on the crypto industry since the implosion of FTX last year, and staking services such as Coinbase’s Earn are under increased scrutiny for not being registered.

Staking is a process in which cryptocurrency holders volunteer to take part in validating transactions on the blockchain. These products often offer customers eye-popping yields.

Last month, Kraken agreed to shut down its U.S. cryptocurrency staking service and pay $30 million in penalties to settle SEC charges that it failed to register the program.

Earlier in the day, the SEC charged Chinese cryptocurrency entrepreneur Justin Sun with fraud, and accused eight celebrities including actress Lindsay Lohan with illegally promoting his crypto assets.

Coinbase said its services continued to operate as usual after the notice was issued.

A Wells notice does not always result in charges or signal that the recipient has violated any law.

(Reporting by Niket Nishant in Bengaluru; Editing by Devika Syamnath)

By Patrick Wingrove and Leroy Leo

(Reuters) -Moderna Inc’s chief executive on Wednesday defended the company’s plan to quadruple the price of its COVID-19 vaccine, telling a U.S. Senate committee hearing it will no longer have the economies of scale from government procurement when the shots move into the private market.

Moderna CEO Stephane Bancel was called to testify after the company flagged plans to raise the vaccine’s price to as much as $130 per dose, drawing the ire of Democratic U.S. Senator Bernie Sanders, who chairs the influential Committee on Health, Education, Labor and Pensions (HELP).

Sanders on Wednesday asked Bancel to reconsider the price hikes, saying they could make it unaffordable for millions of Americans and were unjustified given the government’s research contributions and $1.7 billion in assistance in developing the vaccine. His comments echoed his January letter to Bancel.

Bancel said Moderna’s next COVID-19 shots will be more expensive because they will be sold in single-dose vials or pre-filled syringes for the commercial market versus the 10-dose vials it has sold to the government up until now.

The government in May plans to end the COVID public health emergency, putting much of the vaccine purchasing in the hands of the private sector.

Bancel also said the company anticipated that it would likely make more doses than needed to ensure it had enough for the private market and had calculated wasted shots into the price.

“On top of all this, we’re expecting a 90% reduction in demand,” Bancel said. “As you can see, we’re losing economies of scale.”

Moderna in February forecast $5 billion in COVID vaccine sales this year, far less than the $18.4 billion windfall in 2022, due to decreasing demand for the shots.

Sanders has for years railed against high U.S. drug prices and backed Medicare-for-all. His chairmanship of the HELP committee has further put drug companies in his crosshairs.

(Reporting by Sriparna Roy and Leroy Leo in Bengaluru and Patrick Wingrove in New York; Editing by Bill Berkrot)

By Stephen Culp

NEW YORK (Reuters) – Wall Street gyrated to end sharply lower on Wednesday after the U.S. Federal Reserve delivered a widely expected 25 basis point policy hike, while hinting that it was on the verge of pausing future increases in view of recent turmoil in the financial sector.

The three major U.S. stock indexes, which were mostly directionless prior to the Fed announcement, jumped higher then deflated as investors digested the accompanying statement and Chair Jerome Powell’s subsequent Q&A session.

By closing bell, all three indexes were off more than 1.6%.

“The market was encouraged when it heard that the Fed had considered pausing completely and then it was disappointed when Powell clarified that their hands weren’t tied and that they can keep raising rates if they need to,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina.

In the Fed’s statement, the members of the Federal Open Markets Committee (FOMC) said some additional tightening might be possible, but suggested it was on the verge of pausing future hikes in view of recent turmoil in the financial sector.

Gains pared during Powell’s remarks and Q&A session in which he vowed to use all available tools to keep the banking system sound, but reiterated the central bank’s commitment to reining in inflation.

“The indexes whipsaw because there’s so much at stake, being the first to evaluate the impact of the statement and the subsequent press conference,” said Sam Stovall, chief investment strategist of CFRA Research in New York. “Maybe investors were expecting the Fed to stop with this hike, expressing their displeasure that rate hikes might continue for one or two more meetings.”

Worries persist that the Fed’s aggressive battle against inflation could tip the economy into recession, and recent turmoil in the banking sector, sparked by failures of SVB Financial Group and Signature Bank, have exacerbated those fears.

The sell-off was exacerbated by Treasury Secretary Janet Yellen’s remarks before lawmakers that the Federal Deposit Insurance Corporation (FDIC) was not considering “blanket insurance” for deposits arising from recent strife in the sector.

The Dow Jones Industrial Average fell 530.49 points, or 1.63%, to 32,030.11, the S&P 500 lost 65.9 points, or 1.65%, to 3,936.97 and the Nasdaq Composite dropped 190.15 points, or 1.6%, to 11,669.96.

All 11 major sectors of the S&P 500 ended the session deep in negative territory, with real estate suffering the steepest percentage drop, its largest one-day plunge since Sept. 13.

The banking sector reversed course after a two-session rebound, with the S&P Banks index and the KBW Regional Bank index off 3.7% and 5.3%, respectively.

Shares of First Republic slipped 15.5% in volatile trade amid worries that it may need to downsize or seek government support.

Pacific Western Bank announced it had raised $1.4 billion from investment firm Atlas SP Partners. Its shares dropped 17.1%.

Western Alliance Bancorp fell 5.0%.

Retail darling GameStop Corp surged 35.2% after posting a surprise fourth quarter profit.

Used car e-commerce platform Carvana Co jumped 6.3% following its announcement that it expects a smaller current quarter loss as a result of cost-cutting measures.

Virgin Orbit Holdings Inc soared 33.1% following the satellite launch firm’s announcement it is resuming operations.

Nike Inc dropped 4.9% after the sports apparel maker raised its full-year revenue outlook on Tuesday but warned of margin pressures.

Declining issues outnumbered advancing ones on the NYSE by a 2.25-to-1 ratio; on Nasdaq, a 2.57-to-1 ratio favored decliners.

The S&P 500 posted six new 52-week highs and 13 new lows; the Nasdaq Composite recorded 44 new highs and 179 new lows.

Volume on U.S. exchanges was 11.84 billion shares, compared with the 12.70 billion average over the last 20 trading days.

(Reporting by Stephen Culp in New York; Additional reporting by Sinead Carew in New York, Amruta Khandekar and Shubham Batra in Bengaluru; Editing by Marguerita Choy)

By David Shepardson

WASHINGTON (Reuters) -Chinese-owned short video app TikTok faces a “pivotal moment” as a growing number of U.S. lawmakers seek to ban the popular app over national security concerns, CEO Shou Zi Chew said.

Chew said in a video posted on TikTok early on Tuesday that the app now has more than 150 million active monthly U.S. users, representing almost half of the country’s population and up from the 100 million U.S. users it had in 2020.

Chew, who will testify Thursday before the House Energy and Commerce Committee, noted that some politicians were talking about banning TikTok.

“This comes at a pivotal moment for us,” he said on the video that featured the U.S. Capitol in the background and received more than 3.8 million views since it was posted earlier in the day.

“Some politicians have started talking about banning TiktTok. Now this could take TikTok away from all 150 million of you.”

Chew asked TikTok users to leave comments about what they wanted U.S. lawmakers to know about “what you love about TikTok”, and thousands responded in support.

TikTok’s critics fear that its U.S. user data could be passed on to China’s government by the app, which is owned by the Chinese tech company ByteDance. TikTok rejects the spying allegations.

Last week, TikTok said the Biden administration demanded that its Chinese owners divest their stake in the app or it could face a U.S. ban.

On Wednesday, TikTok creators and New York Representative Jamaal Bowman, a Democrat, will hold a press conference outside the U.S. Capitol to oppose a TikTok ban.

Bowman described the push to ban TikTok as “fear mongering” in an interview with Reuters.

He said the United States needed comprehensive “Big Tech regulation” that addressed Facebook, Alphabet’s YouTube, Twitter and others, but singling out TikTok was “unacceptable.”

Banning TikTok “would be another message to younger voters that we don’t care about what you think,” Bowman said.

Chew said 5 million U.S. businesses also used TikTok to reach customers.

TikTok also said Tuesday it had updated its community use guidelines and offered more details of its plans to secure the data of U.S. users.

The company said it had started to delete this month U.S. user protected data in data centers in Virginia and Singapore after it started routing new U.S. data to the Oracle Cloud last year.

TikTok, which has said it has spent more than $1.5 billion on rigorous data security efforts, said “if protecting national security is the objective, divestment doesn’t solve the problem: a change in ownership would not impose any new restrictions on data flows or access.”

A growing number of U.S. lawmakers support a ban on TikTok, including House Energy and Commerce Committee Chair Cathy McMorris Rodgers, congressional aides told reporters on a call Monday.

On Friday, six more U.S. senators backed bipartisan legislation to give Biden new powers to ban TikTok.

On March 1, the U.S. House Foreign Affairs Committee voted along party lines to give President Joe Biden new powers to ban TikTok.

(Reporting by David Shepardson; Editing by Andrew Heavens, Jane Merriman, Anna Driver and Jamie Freed)