Biden says financial system is safe but all seized banks’ management should get sacked and tougher rules are needed

BYKEN SWEET, CHRISTOPHER RUGABER, CHRIS MEGERIAN, CATHY BUSSEWITZ AND THE ASSOCIATED PRESS

March 13, 2023 

President Joe Biden speaks about the banking system in the Roosevelt Room of the White House, Monday, March 13, 2023 in Washington.
AP PHOTO/ANDREW HARNIK

President Joe Biden on Monday told Americans the nation’s financial systems were safe, seeking to project calm following the swift and stunning collapse of two banks that prompted fears of a broader upheaval.

“Your deposits will be there when you need them,” he said.

U.S. regulators closed the Silicon Valley Bank on Friday after it experienced a traditional bank run, where depositors rushed to withdraw their funds all at once. It is the second largest bank failure in U.S. history, behind only the 2008 failure of Washington Mutual. But the financial bloodletting was swift; New York-based Signature Bank also failed.

The president, speaking from the White House shortly before a trip to the West Coast, said he’d seek to hold those responsible accountable, and pressed for better oversight and regulation of larger banks. And he promised no losses would be borne by taxpayers.

“We must get the full accounting of what happened,” he said. “Americans can have confidence that the banking system is safe.”

Biden also said management of the banks should be fired. “If the bank is taken over by the FDIC, the people running the bank should not work there anymore,” he said, referring to the Federal Deposit Insurance Corp., the agency responsible for ensuring the stability of the banking system.

At more than $110 billion in assets, Signature Bank is the third-largest bank failure in U.S. history. Another beleaguered bank, First Republic Bank, announced Sunday that it had bolstered its financial health by gaining access to funding from the Fed and JPMorgan Chase.

The developments left markets jittery as trading began Monday. The Asian and European markets fell and while U.S. markets traded higher, shares in midsized commercial banks were hammered despite assurances from Biden.

The Bank of England and U.K. Treasury said early Monday that they had facilitated the sale of a Silicon Valley Bank subsidiary in London to HSBC, Europe’s biggest bank, ensuring the security of 6.7 billion pounds ($8.1 billion) of deposits.

In an effort to shore up confidence in the banking system, the Treasury Department, Federal Reserve and FDIC said Sunday that all Silicon Valley Bank clients would be protected and able to access their money.

“This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth,” the agencies said in a joint statement.

Under the plan, depositors at Silicon Valley Bank and Signature Bank, including those whose holdings exceed the $250,000 insurance limit, will be able to access their money on Monday.

Britain also moved quickly, working throughout the weekend to arrange the sale of Silicon Valley Bank UK Ltd., the California bank’s British arm, for the nominal sum of one pound.

While the bank is small, with less than 0.2% of U.K. bank deposits according to central bank statistics, it had a large role in financing technology and biotech startups that the British government is counting on to fuel economic growth.

Jeremy Hunt, Britain’s Treasury chief, said some of the country’s leading tech companies could have been “wiped out.”

“When you have very young companies, very promising companies, they’re also fragile,” Hunt told reporters, explaining the why authorities moved so quickly. “They need to pay their staff and they were worried that as of 8 a.m. this morning, they might literally not be able to access their bank account.”

He stressed that there was never a “systemic risk” to Britain’s banking system.

Silicon Valley Bank began its slide into insolvency when it was forced to dump some of its treasuries at at a loss to fund its customers’ withdrawals. Under the Fed’s new program, banks can post those securities as collateral and borrow from the emergency facility.

The Treasury has set aside $25 billion to offset any losses incurred. Fed officials said, however, that they do not expect to have to use any of that money, given that the securities posted as collateral have a very low risk of default.

Though Sunday’s steps marked the most extensive government intervention in the banking system since the 2008 financial crisis, the actions are relatively limited compared with what was done 15 years ago. The two failed banks themselves have not been rescued, and taxpayer money has not been provided to them.

Some prominent Silicon Valley executives feared that if Washington didn’t rescue their failed bank, customers would make runs on other financial institutions in the coming days. Stock prices plunged over the last few days at other banks that cater to technology companies, such as First Republic and PacWest Bank.

Among the bank’s customers are a range of companies from California’s wine industry, where many wineries rely on Silicon Valley Bank for loans, and technology startups devoted to combating climate change.

Tiffany Dufu, founder and CEO of The Cru, a New York-based career coaching platform and community for women, posted a video Sunday on LinkedIn from an airport bathroom, saying the bank crisis was testing her resiliency.

Given that her money was tied up at Silicon Valley Bank, she had to pay her employees out of her personal bank account. With two teenagers to support who will be heading to college, she said she was relieved to hear that the government’s intent is to make depositors whole.

“Small businesses and early-stage startups don’t have a lot of access to leverage in a situation like this, and we’re often in a very vulnerable position, particularly when we have to fight so hard to get the wires into your bank account to begin with, particularly for me, as a Black female founder,” Dufu said.


___

Rugaber and Megerian reported from Washington. Sweet and Bussewitz reported from New York. Associated Press Writers Hope Yen in Washington, Jennifer McDermott in Providence, Rhode Island, and Danica Kirka in London contributed to this report.

Illegal Immigration Bill: Protest to take place outside parliament as Conservative MPs set to rebel over controversial law


Protesters and MPs will oppose the Illegal Immigration Bill as parliament votes on the second reading on Monday evening.

GREG BARRADALE
13 Mar 2023

The Prime Minister, Rishi Sunak holds a press conference on the small boats bill at No.9 Downing Street. Picture by Rory Arnold / No 10 Downing Street

Voting on the new Illegal Immigration Bill will be set against a backdrop of protest and rebellion on Monday evening as thousands are expected to gather outside parliament in opposition and the government faces open dissent — albeit small — from its own MPs.

Organisers say thousands are expected to turn out to Parliament Square for the protest, supported by the Fire Brigades Union, the Muslim Association of Britain, human rights charities and opposition MPs.

“We’re standing up in Westminster today alongside countless others to show our solidarity with people seeking safety here, and demonstrate the widespread and growing resistance to this government’s deplorable new anti-refugee bill,” said a spokesperson from the Joint Council for the Welfare of Immigrants.

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“Sunak’s latest headline-chasing asylum plans will effectively bulldoze people’s right to seek refuge here, pushing people who’ve fled danger into prison-like asylum camps for indefinite amounts of time and stripping protections away from children, pregnant people and victims of trafficking.

“No caring, compassionate person wants to see fellow human beings treated like this – that’s why so many of us are protesting the bill today, and demanding safe routes and community welcome instead.”
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Prime minister Rishi Sunak and home secretary Suella Braverman have insisted the bill is delivering on “the people’s priority” of stopping small boat crossings to the UK. Recent polls have shown the cost of living crisis is consistently the biggest concern for UK voters, followed by immigration and the NHS crisis.

The bill, designed to stop people crossing the Channel in small boats to claim asylum and praised by far-right groups at home and abroad, would stop anybody arriving through this route from making a claim, and make them liable for deportation to a third country such as Rwanda.

“This Government’s Refugee Ban Bill is a rotten divide and rule tactic and a stain on the UK’s reputation. It’s no surprise that people are taking to the streets and I back them in doing so,” said Green Party MP Caroline Lucas.

“When we have a government that’s willing to break international law, and a national broadcaster that’s bending to their will, it’s essential that the voice or humanity and compassion is heard.”

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Inside parliament on Monday, MPs will vote on the second reading of the bill. However, former minister Chris Skidmore and Conservative MP Caroline Nokes have both said they would not be voting with their party.

“I am not prepared to break international law or the human rights conventions that the UK has had a proud history of playing a leading role in establishing,” Skidmore said on Twitter.

“I will not be voting for the bill tonight.”

This followed fellow Tory MP, and former immigration minister, Caroline Nokes saying she would not vote for the bill, expressing “absolute horror at the prospect”.

Zoe Gardner, a migration policy expert and one of the organisers of the protest, said she would be among those demanding the bill be scrapped.

“The Refugee Ban Bill threatens to lock up refugee children and criminalise people wanting to rebuild their lives and be reunited with loved ones. It’s a cruel, vindictive piece of legislation that’s losing support fast,” Gardner said.

“The suspension of Gary Lineker from Match of the Day, and the solidarity shown by his fellow pundits, has really drawn a clear divide. On the one side is the Conservative party and their friends in the media, and on the other the many millions of us who see this nasty piece of legislation for the divide and rule tactic that it is.”

Tory MP says she’s ‘horrified’ by migrant bill and will vote against it

The bill goes to the Commons for its second reading on Monday amid rumours of a widespread backbench revolt.

 by Jack Peat
2023-03-13 08:07
in Politics


Conservative MP Caroline Nokes has said she is “horrified” by the Illegal Migration Bill and will vote against it in parliament, suggesting there could be widespread backbench unrest in the party.

The bill goes to the Commons for its second reading on Monday.

Some backbenchers are concerned the legislation could see children and families being detained and deported, with former home secretary Priti Patel reportedly considering a potentially explosive intervention over the issue.

Ahead of the debate, shadow home secretary Yvette Cooper said: “Rishi Sunak’s Bill is unravelling. It is a con which will make our broken asylum system worse.

“Not only will it fail to tackle dangerous boat crossings, but it shows the repeated false claims and promises that both the Prime Minister and Home Secretary have made.”

Caroline Nokes also gave this interview to Times Radio which has been widely lauded on social media

Sudden unexpected infant deaths spiked among Black babies in 2020, CDC finds

THEARA COLEMAN

Oscar Wong/Getty Images

A new study shows that the rate of sudden and unexpected infant deaths spiked in the first year of the pandemic, especially amongst black infants, "even as overall infant mortality dropped to a record low," CNN reports. 

The findings were part of research published Monday by the Centers for Disease Control and Prevention. The study found 3,300 sudden infant deaths among babies of all races in 2020, a 15 percent increase from the previous year. Around one out of every six cases was classified as sudden unexpected infant deaths (SUID), "a broad classification of deaths that includes sudden infant death syndrome, known as SIDS, along with accidental suffocation and strangulation in bed and other unknown causes," CNN explains. While the SUID rate for white babies was at its lowest since 2017, "the rate for Black babies in 2020 was the highest it has been since then." 

The researchers believe that the rising SUID rates in 2020 were "likely attributable to diagnostic shifting — or reclassifying the cause of death," The Washington Post writes. While the causes of the spike in "sleep-related deaths" of Black babies remain unclear, the jump coincided with the beginning of the COVID pandemic, which, the Post says, "disproportionately affected the health and wealth of Black communities." The researchers pointed out that the "pandemic exacerbated overcrowded housing, food insecurity, and other stressors, particularly among Black families — potentially leading to less safe sleeping practices, such as bed-sharing."

Sharyn Parks, one of the study's co-authors and an epidemiologist at the CDC's Division of Reproductive Health, said there are two key takeaways from the study — the need for scientists to examine factors like economic disparities, "as well as the need for parents to remember the practical steps they can take," per the Post. 

"We want to continue emphasizing safe infant sleep practices, putting babies on their backs and removing all soft bedding," Parks said.

Moose eat so much, they may be worsening climate change

DEVIKA RAO

Hawk Buckman / 500px / Getty Images

Research has found that moose may actually be contributing to climate change. The mammal's enormous appetite (eating up to 60 pounds per day!) may actually be reducing forests' ability to store carbon, The Washington Post writes.

"It was really a surprise to see how much moose can influence vegetation growth, the carbon cycle, and the climate system," said co-author of the study Xiangping Hu in a news release. Moose reportedly consume 10 percent of the Norwegian forestry industry's yearly harvest as well as "alter land cover properties ... with direct implications for the climate," per the report.

"Moose are an ecosystem engineer in the forest ecosystem," said Gunnar Austrheim, one of the study's co-authors, adding that they "strongly impact everything from the species composition and nutrient availability in the forest." Along with eating forest trees which act as carbon sinks, moose feeding also impacts surface albedo or "fraction of reflected solar energy radiation." As the animals eat the trees, they allow more light to reflect off the forest floor, cooling it until the canopy regrows.

Moose have been found to benefit the forestry industry by eating deciduous trees and leaving the coniferous species, which tend to get harvested. "So moose to some extent, are helping them because they're reducing competition," explained Francesco Cherubini, also an author of the study. However, this is not necessarily good for climate change because it reduces the biodiversity of the region as well as the ability to hold carbon.

"I think as we get more of an understanding of how all these different things are interrelated, land managers could come up with an optimal plan," Cherubini remarked. "That could be a much-needed win-win solution for climate, for biodiversity, and for timber value."

 'ENTIRELY AVOIDABLE'

Sen. Elizabeth Warren: 'I wish I'd been wrong' predicting SVB collapse

RAFI SCHWARTZ

Tom Williams/CQ-Roll Call, Inc via Getty Images

Sen. Elizabeth Warren (D-Mass.) wrote a scathing opinion essay for The New York Times on Monday, saying "we know who is responsible" for last week's stunning collapse of Silicon Valley Bank and ensuing financial fallout.

"In the aftermath of the 2008 financial crisis, Congress passed the Dodd-Frank Act to protect consumers and ensure that big banks could never again take down the economy and destroy millions of lives," wrote Warren, whose political reputation has been predicated in large part on fighting corporate greed. That law, however, was defanged in 2018 under then-President Donald Trump following intense lobbying pressure from various Wall Street and banking interests including, Warren pointed out, "Greg Becker, the chief executive of Silicon Valley Bank."

Indeed, one of the crucial rollbacks enacted by Trump was raising the threshold of how much money a bank possessed before it was considered "too big to fail" and thereby requiring certain regulatory oversight. Now sitting comfortably below the limit of $250 billion, SVB was therefore subject to fewer regulations over the past five years, leading to what Warren deemed "a toxic mix of risky management and weak supervision." This included relying largely on startups as its main batch of depositors — a move that left the bank particularly vulnerable to the economic flux of a single industry, rather than diversifying its stakeholder group. 

"Had Congress and the Federal Reserve not rolled back the stricter oversight," Warren said, Silicon Valley Bank "would have been subject to stronger liquidity and capital requirements to withstand financial shocks." And while the damage in this particular instance is done (although the Biden administration has vowed to cover deposit insurance above the usual $250,000 limit for bank customers), Warren nevertheless proposes a series of steps to prevent the next medium-size bank meltdown from occurring. Her suggestions include returning to Dodd-Frank-levels of regulation, amending deposit insurance rules to better protect payrolls and ordinary banking transactions, and — perhaps most importantly — ensuring that "those responsible not be rewarded" with the government empowered to not only "claw back" excessive executive bonuses, but also investigate potential civil and criminal lawbreaking on the part of those at the top of SVB. 

"These bank failures were entirely avoidable if Congress and the Fed had done their jobs and kept strong banking regulations in place since 2018," Warren concluded, warning "Washington must act quickly to prevent the next crisis."

How to explain the Silicon Valley Bank failure without needlessly creating panic

Plus, why the bank is important beyond its customers, how to explain the FDIC, a promising breakthrough in bone cancer treatment, and more.

The Silicon Valley Bank headquarters and branch in Santa Clara, Calif. 

By: Al Tompkins
March 13, 2023

Federal officials spent the weekend trying to calm fears around the sudden closure on Friday of Silicon Valley Bank that could cause another round of destabilization. The Federal Deposit Insurance Corp. announced emergency measures that would protect bank customers big and small as another bank, the third in a week, closed over the weekend.

On Sunday, New York regulators shut down Signature Bank, best known as a bank that law firms used to park escrow funds for clients. The New York Times said the bank was hit hard Friday by customers pulling funds. Bank officials told the Times they thought things had settled down on Sunday, but regulators moved in.

Signature also was a big player in the cryptocurrency world, second only to Silvergate, which also announced it would liquidate last week.

In an attempt to calm jitters and prevent a panicked rush to withdraw money, Treasury Secretary Janet Yellen announced late Sunday that the FDIC would back all deposits, whether they are covered under the $250,000 cap or not. And, the secretary added, taxpayers would not pay the cost. Instead, the cost would be paid by banks through “special assessments.” The Treasury Department and the FDIC posted:

After receiving a recommendation from the boards of the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve, Treasury Secretary Yellen, after consultation with the President, approved actions to enable the FDIC to complete its resolutions of Silicon Valley Bank and Signature Bank in a manner that fully protects all depositors, both insured and uninsured. These actions will reduce stress across the financial system, support financial stability and minimize any impact on businesses, households, taxpayers, and the broader economy.

Yellen said Sunday that the government would not bail out Silicon Valley Bank. Yellen told CBS News, “Let me be clear that during the financial crisis, there were investors and owners of systemic large banks that were bailed out, and we’re certainly not looking.”

Today will also provide insight into whether the problems at Silicon Valley Bank are wider than that fairly small institution, which ranked 16th in size in the U.S. banking industry. Silicon Valley also had international branches that could scare depositors outside of the U.S., including in China, Denmark, Germany and India.

On Sunday, Shalanda Young, the director of the White House Office of Management and Budget, told CNN that the banking system in the U.S. is healthy and more resilient now than in the 2008 banking crisis. She said, “It has a better foundation than before the (2008) financial crisis. That’s largely due to the reforms put in place.”

To give you an idea of what happened last week, Axios calculates, “Silicon Valley Bank’s customers withdrew $42 billion from their accounts on Thursday. That’s $4.2 billion an hour, or more than $1 million per second for ten hours straight.”

Silicon Valley Bank is and was especially important to tech sector startups. If those businesses fear they could lose their assets, they could continue the bank run and withdraw their accounts and cause more problems.

This is the first U.S. bank failure since 2020. In some ways, it can trace its problems to the fact that Silicon Valley Bank got much of its business from the tech sector, which has been reeling in recent months. But as small as Silicon Valley Bank is compared to giants like Bank of America, Citigroup and JP Morgan Chase, all of those stocks took a beating on the news of the Silicon Valley Bank failure.

Unlike the 2008 banking crisis, which was mainly the result of risky loans made to people who bought overpriced houses, it appears that this banking failure (at least at Silicon Valley Bank) is linked to rising interest rates. The Federal Reserve has been raising interest rates since early 2022 and plans to send them higher. People saw that they could earn risk-free income by buying treasuries, which had higher interest rates thanks to the Federal Reserve, and the bank had to find a way to raise the cash to cover those withdrawals. The quickest way to do that is to sell portions of a bank’s loan portfolio. When you liquidate quickly, you take a loss.

Business Insider’s Matthew Fox reports:

The bank’s collapse was a byproduct of the Federal Reserve’s hiking of interest rates by 1,700% in less than a year. Once risk-free Treasurys started generating more attractive returns (5%) than what SVB was offering, people started withdrawing their money, and the bank needed a quick way to pay them.

(The United States Treasury offers five types of Treasury marketable securities: Treasury Bills, Treasury Notes, Treasury Bonds, Treasury Inflation-Protected Securities and Floating Rate Notes.)

The bank had to sell its loan portfolio at a massive loss. Fox does a terrific job explaining how the collapse unfolded:

Back in 2020 and 2021, tech startups were buzzing with sky-high valuations, stock prices were soaring to record highs on an almost weekly basis, and everyone was flush with cash thanks to trillions of dollars of stimulus from the government.

In this environment, Silicon Valley Bank, which had become the go-to bank for start-ups, thrived. Its deposits more than tripled from $62 billion at the end of 2019 to $189 billion at the end of 2021. After receiving more than $120 billion in deposits in a relatively short period of time, SVB had to put that money to work, and it’s loan book wasn’t big enough to absorb the massive influx in cash.

So, SVB did a normal thing for a bank — just under terms that ended up working against it. It purchased US Treasury bonds and mortgage backed securities. Fast forward to March 16, 2022 when the Fed embarked on its first interest rate hike. Since then, interest rates have soared from 0.25% to 4.50% today.

Suddenly, SVB’s portfolio of long-term bonds, which yielded an average of just 1.6%, were a lot less attractive than a 2-year US Treasury Note that offered nearly triple that yield. Bond prices plunged, creating billions of dollars in paper losses for SVB.

Ongoing pressure on tech valuations and a closed IPO market led to falling deposits at the bank. That spurred SVB to sell $21 billion of bonds at a loss of $1.8 billion, all in an effort to shore up its liquidity but which essentially led to a run on the bank.
Why is Silicon Valley Bank important beyond its customers?

The New York Times explains that this bank has been a lifeblood for the tech industry and some of the big players in it:

The fall of Silicon Valley Bank was especially troubling because it was the self-described “financial partner of the innovation economy.” The bank, founded in 1983 and based in Santa Clara, Calif., was deeply entangled in the tech ecosystem, providing banking services to nearly half of all venture-backed technology and life-science companies in the United States, according to its website.

Silicon Valley Bank was also a bank to more than 2,500 venture capital firms, including Lightspeed, Bain Capital and Insight Partners. It managed the personal wealth of many tech executives and was a stalwart sponsor of Silicon Valley tech conferences, parties, dinners and media outlets.

The bank was a “systemically important financial institution” whose services were “immensely enabling for start-ups,” said Matt Ocko, an investor at the venture capital firm DCVC.
Explain the FDIC

In times of uncertainty, it is a great public service for journalists to explain the basics of the financial system and the safeguards in place to protect people’s money.

The Federal Deposit Insurance Corp. traces its history to the Banking Act of 1933, after the Great Depression caused a panicked run on banks. The FDIC says, since 1934, “no depositor has lost a single penny of insured funds due to bank failure.” Read what President Franklin Delano Roosevelt said back in 1933 when the panic began. It was a chilling address and nothing like a small bank in California closing — as long as it remains just one banking company.

The FDIC does not protect 401(k) retirement funds that are not invested in bank products. For instance, the FDIC would not protect losses in stocks, bonds, mutual funds, annuities, insurance products and crypto assets. If a brokerage that managed your funds went out of business, you might get help from the Securities Investor Protection Corporation, but when you invest in stocks and such, you could lose (and gain) money. SIPC explains its function this way:

If a firm closes, SIPC protects the securities and cash in a customer’s brokerage account up to $500,000. The $500,000 protection includes up to $250,000 protection for cash in the account.

SIPC protects customers if:The brokerage firm is a SIPC member.
The customer has securities at the brokerage firm.
The customer has cash at the brokerage firm on deposit in connection with the purchase or sale of a security. SIPC protection is only available if the brokerage firm fails and SIPC steps in.

SIPC does NOT protect: Investments if the firm is not a SIPC member.
Market loss.

Promises of investment performance.
Commodities or futures contracts except under certain conditions.

SIPC does not protect market losses because market losses are a normal part of the ups and downs of the risk-oriented world of investing. Instead, in a liquidation, SIPC replaces the missing stock and other securities when it is possible to do so.

The best advice is to be sure your broker is SIPC insured. Here is a list of 3,500 insured members. One of the most infamous SIPC cases involved Bernie Madoff. That case so far has distributed more than $14 billion.

When you put money in an FDIC-insured bank product, it is protected up to $250,000. You could, of course, have multiple accounts, including a savings account, a CD account and a trust. Each is insured up to $250,000. A husband and wife could each have accounts.

Biden Reassures Depositors Of SVB, Signature Bank After Third Failure In A Week Meanwhile, Silicon Valley Bank's British subsidiary was taken over by HSBC in BoE and government facilitated transaction 

By - Mohammed Kudrati | 13 Mar 2023 

US President Joe Biden assured depositors of full access to the entirety of their funds as New York-based Signature Bank was taken over by regulators in a late-night manoeuvre on March 12. The bank had $114 billion in assets and is the third largest US bank failure. This marks the third US bank to fail in a week in what poses to be major challenge to US regulators since the 2008 financial crisis. Another crypto-linked bank, Silvergate Bank, was liquidated by its parent, Silvergate Capital. 

The bank popularly held an account of the crypto-exchange FTX, which went through troubles last year. Its founder and CEO Sam Bankman-Fried who was arrested on charges on fraud and is currently out on bail. Last Friday, Silicon Valley Bank failed and was taken over by Californian regulators. If Signature Bank was the third largest US bank failure by assets, Silicon Valley Bank was the second. It had assets worth $206 billion and was stable till last week. But it was a victim of a run on the bank and had to meet $42 billion in a day due to its close proximity to the tech sector and its growing need for cash upfront. The New York State Department of Financial Services took over the Signature Bank and appointed the Federal Deposit Insurance Corporation (FDIC) as receiver, like California's regulator did with SVB. The FDIC is the federal deposit insurer, that guarantees bank deposits up to $250,000.

 Further, the assets of the bank have been made marketable by referring them to a new holding entity and full-service bank - Signature Bridge Bank N.A. - to make it more marketable. Such secondary banks are called 'bridge banks' to help sell off the assets of a beleaguered bank to help it reach a meaningful resolution. "A bridge bank is a chartered national bank that operates under a board appointed by the FDIC. It assumes the deposits and certain other liabilities and purchases certain assets of a failed bank. The bridge bank structure is designed to “bridge” the gap between the failure of a bank and the time when the FDIC can stabilize the institution and implement an orderly resolution," the FDIC says. Further, this comes at a time when economic projections are seesawing as to whether it will face a recession later this year. 

Contagion spreads abroad Ripples of a banking system fallout can be seen in Europe. SVB's British arm was purchased today by HSBC for £1 in a transaction brokered by the Bank of England and British government. The measures were announced by Chancellor of the Exchequer, Jeremy Hunt. The powers to facilitate the transaction was derived from regulation to strengthen the financial system after the financial system. The solution resembles one that the US government is currently mulling - a takeover of the bank by a financial institution that is larger. "Today the government and the Bank of England have facilitated a private sale of Silicon Valley Bank UK; this ensures customer deposits are protected and can bank as normal, with no taxpayer support. I am pleased we have reached a resolution in such short order", Hunt is quoted as saying. 

In Germany, the banking regulator BaFin imposed an operational moratorium on SVB's local branch. The German arm of the bank had assets worth $341 million, with the regulators said that the situation posed no "threat to financial stability", Reuters reported. Germany is Europe's largest economy. India's Minister of State Rajeev Chandrashekhar has reportedly met with founders of affected startups over this issue. The UK's FTSE 100 index is down sharply at 1.92%, trading at 7,598 points while Germany's DAX has tumbled 2.68%, trading at 15,024 points. Germany's consolidated bank index has fallen nearly 9.53% on the Frankfurt Stock Exchange. Indian stocks ended lower with NIFTY50, the benchmark of the National Stock Exchange, 1.5% lower at 17,154 points. BANKNIFTY, the benchmark bank index on the NSE, has fallen 2.27% at 39,564 points.

HSBC UK acquires Silicon Valley Bank UK for £1, saving hundreds of innovative UK companies

RUSSELL KIDSON
Mar 13, 2023

HSBC UK has announced its acquisition of Silicon Valley Bank UK for a nominal amount of £1. The transaction followed a weekend of intense negotiations among the U.K. government, regulators, and various potential buyers after the U.K. subsidiary of the troubled U.S. entity entered insolvency procedures on Friday.

This acquisition will provide significant relief to the U.K. technology sector, which was particularly vulnerable to the collapse of both SVB and its U.K. arm. The rapid completion of the deal will be perceived as a sign of the government's endorsement of the technology industry and its trust in the financial system as a whole.

According to a statement released by HSBC, the transaction has been completed immediately, and the acquisition will be financed using existing resources. The bank further stated:

‘As at 10 March 2023, SVB UK had loans of around £5.5 billion and deposits of around £6.7 billion. For the financial year ending 31 December 2022, SVB UK recorded a profit before tax of £88 million. SVB UK’s tangible equity is expected to be around £1.4 billion. Final calculation of the gain arising from the acquisition will be provided in due course.’

The Bank of England has assured the safety of all depositors' funds with SVB UK, as the acquisition guarantees the continuity of banking services. As a result, SVB UK will not be subjected to insolvency proceedings.

U.K. Chancellor Jeremy Hunt confirmed that the government, in collaboration with the Bank of England, has facilitated a private sale of Silicon Valley Bank UK to HSBC. He further stated that depositors' funds will be protected without the need for any financial assistance from taxpayers.

The Bank of England has confirmed that Silicon Valley Bank UK's business operations will continue as usual under the ownership of HSBC. All services will remain unchanged, and customers should not anticipate any disruptions to their banking experience. Customers are encouraged to contact SVB UK through the regular communication channels, and loan repayments should continue to be made to SVB UK as usual. SVB UK's employees will remain employed by the bank, and the institution will retain its authorization from the PRA/FCA.

The Bank's statement also supersedes its previous declaration on March 10 that, in the absence of any significant additional information, it intended to seek a court order to place SVBUK into a Bank Insolvency Procedure. The emergence of a credible purchaser for SVBUK has led the Bank to exercise its resolution powers for stabilizing failing banks, rendering the previous statement moot.

The Bank of England also confirmed that no other U.K. banks will be materially affected by these actions or the resolution of SVBUK's U.S. parent bank, and that the wider U.K. banking system remains secure, robust, and adequately capitalized.

Noel Quinn, the CEO of HSBC Group, has expressed his enthusiasm for the acquisition of Silicon Valley Bank UK and extended a warm welcome to its customers in a statement. He affirmed that the deal aligns with the bank's strategic vision for the U.K. market and will reinforce its commercial banking capabilities, particularly in serving innovative and rapidly growing firms, including those in the technology and life science sectors, both in the U.K. and internationally.

Quinn further assured SVB UK customers that they could continue to bank with the same level of convenience and safety they are accustomed to, with the added assurance that their deposits are backed by the strength and security of HSBC. The CEO also expressed his eagerness to collaborate with SVB UK colleagues and strengthen the bank's position in the U.K. financial sector.

Dom Hallas, the Executive Director of Coadec, a non-profit organization that advocates for the interests of tech startups, has lauded the efforts of the U.K. government in facilitating the acquisition. He acknowledged the significant role played by various government bodies, including HM Treasury and the civil servants who worked tirelessly to secure the deal. Hallas also highlighted the importance of the government's intervention in protecting hundreds of the U.K.'s most innovative companies.

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US to drill for oil in Alaska as Biden OKs $8B Willow Project, 180K barrels a day

By Mark Moore
March 13, 2023 1

The Biden administration on Monday approved a massive oil drilling project in Alaska that is sure to put the president on a collision course with far-left factions of his Democratic Party.

The Willow Project has come under fire from environmental groups, who are already accusing President Biden of reneging on campaign promises to battle climate change and end drilling on public lands.

Some Republicans, meanwhile, lauded the move by Team Biden to finally do something to offset the rising cost of gasoline and start to make the US energy-independent.

Under the plan announced by the Department of the Interior, Houston-based ConocoPhillips can drill at three sites on Alaska’s North Slope — about 219 wells in all — but the federal agency denied the company’s proposal for another two sites.

ConocoPhillips, which is seeking to develop oil and gas leases it purchased in the 1990s, will also have to give up rights to about 68,000 acres in the National Petroleum Reserve-Alaska.

The $8 billion Willow Project, according to the company, could produce up to 180,000 barrels of oil a day and create as many as 1,800 jobs during construction and 300 long-term jobs, as well as generating billions of dollars in royalties and tax revenues for the state and federal government.

While the project enjoyed widespread support in Alaska, it has been the subject of an aggressive social media campaign by environmental groups.


Biden to sign off on $8 billion oil drilling project in Alaska: reports

The Biden administration has also been under increasing political pressure to ramp up domestic energy production after historic highs in gasoline prices.

The Natural Resources Defense Counsel said in a Twitter posting that it would continue to fight against the project.

​”​It’ll escalate the climate crisis and lock us into decades of dependence on Big Oil executives hell-bent on destroying the planet. The fight isn’t over and we will consider every tool available to stop this climate bomb​,” the organization said.

Sierra Club executive director Ben Jealous said in a statement that by giving the Willow Project the green light, the Biden administration has “made it almost impossible to achieve the climate goals they set for public lands.”

A map shows the area of the Willow Project in the National Petroleum Reserve-Alaska.Associated Press

The environmental group also addressed the administration’s attempt on Sunday to offset the blowback it would receive for approving the ConocoPhillips plan by preventing or limiting oil drilling in 16 million acres in Alaska and the Arctic Ocean.

“While we celebrate the administration’s unparalleled protections for Alaskan landscapes and waters, the decision to approve the Willow Project may very well wipe out many of these climate and ecological benefits,” Jealous said.

“And by approving one of the largest oil and gas extraction projects on federal public lands, one must ask the question what the Biden administration has in store for the Arctic Refuge,” he said.

Sen. Dan Sullivan​ (R-Alaska) called the Willow Project “critically important” to the state’s economy and national security.​

“Producing much-needed American energy in Alaska with the world’s highest environmental standards and lowest emissions enhances the global environment,” Sullivan said in a statement. ​

Alaska’s other GOP senator, Lisa Murkowski, said approval of the project is a “huge and needed victory for all Alaska.”

​​”This project will produce lasting economic and security benefits for our state and the nation​,” she said on Twitter. ​

Biden administration approves controversial Willow oil drilling project in Alaska



By —Matthew Daly, Associated Press
By —Chris Megerian, Associated Press

Politics Mar 13, 2023 

WASHINGTON (AP) — The Biden administration said Monday it is approving the major Willow oil project on Alaska’s petroleum-rich North Slope, one of President Joe Biden’s most consequential climate choices that is drawing condemnation from environmentalists who say it flies in the face of the Democratic president’s pledges.

The announcement comes a day after the administration, in a big move toward conservation, said it would bar or limit drilling in some other areas of Alaska and the Arctic Ocean.

READ MORE: Biden blocks other oil drilling in Alaska while considering Willow project

Biden’s Willow plan would allow three drill sites initially, which project developer ConocoPhillips has said would include about 219 total wells. A fourth drill site proposed for the project would be denied. The company has said it considers the three-site option workable.

Houston-based ConocoPhillips will relinquish rights to about 68,000 acres of existing leases in the National Petroleum Reserve-Alaska.

Climate activists have been outraged that Biden appeared open to greenlighting the project, which they said put Biden’s climate legacy at risk. Allowing oil company ConocoPhillips to move forward with the drilling plan also would break Biden’s campaign promise to stop new oil drilling on public lands, they say.

The administration’s decision is not likely to be the last word, with litigation expected from environmental groups.

ConocoPhillips Alaska’s Willow project could produce up to 180,000 barrels of oil a day, create up to 2,500 jobs during construction and 300 long-term jobs, and generate billions of dollars in royalties and tax revenues for the federal, state and local governments, the company says.

The project, located in the federally designated National Petroleum Reserve-Alaska, enjoys widespread political support in the state. Alaska Native state lawmakers recently met with Interior Secretary Deb Haaland to urge support for Willow.

But environmental activists have promoted a #StopWillow campaign on social media, seeking to remind Biden of his pledges to reduce planet-warming greenhouse gas emissions and promote clean energy.

Christy Goldfuss, a former Obama White House official who now is a policy chief at the Natural Resources Defense Council, said she was “deeply disappointed” at Biden’s decision to approve Willow, which NRDC estimates would generate planet-warming greenhouse gas emissions equivalent to more than 1 million homes.

“This decision is bad for the climate, bad for the environment and bad for the Native Alaska communities who oppose this and feel their voices were not heard,” Goldfuss said.

Anticipating that reaction among environmental groups, the White House announced on Sunday that Biden will prevent or limit oil drilling in 16 million acres in Alaska and the Arctic Ocean. The plan would bar drilling in nearly 3 million acres of the Beaufort Sea — closing it off from oil exploration — and limit drilling in more than 13 million acres in the National Petroleum Reserve.

The withdrawal of the offshore area ensures that important habitat for whales, seals, polar bears and other wildlife “will be protected in perpetuity from extractive development,″ the White House said in a statement.

The U.S. Bureau of Land Management, as part of an environmental review, advanced in February a development option for Willow calling for up to three drill sites initially, which it said would include about 219 total wells. ConocoPhillips Alaska said it considered that option workable.

Alaska’s Republican U.S. senators warned any further limits could kill the project, rendering it uneconomic.

Alaska’s bipartisan congressional delegation met with Biden and his advisers in early March to plead their case for the project, while environmental groups rallied opposition and urged project opponents to place pressure on the administration.

City of Nuiqsut Mayor Rosemary Ahtuangaruak, whose community of about 525 people is closest to the proposed development, has been outspoken in her opposition, worried about impacts to caribou and her residents’ subsistence lifestyles. The Naqsragmiut Tribal Council, in another North Slope community, also raised concerns with the project.

But there is “majority consensus” in the North Slope region supporting the project, said Nagruk Harcharek, president of the group Voice of the Arctic Iñupiat, whose members include leaders from across much of that region.

READ MORE: Biden administration faces dilemma in conflict over major Alaska oil project

The conservation actions announced Sunday complete protections for the entire Beaufort Sea Planning Area, building upon President Barack Obama’s 2016 action on the Chukchi Sea Planning Area and the majority of the Beaufort Sea, the White House said.

Separately, the administration moved to protect more than 13 million acres within the petroleum reserve, a 23-million acre chunk of land on Alaska’s North Slope set aside a century ago for future oil production.

The Willow project is within the reserve, and ConocoPhillips has long held leases for the site. About half the reserve is off limits to oil and gas leasing under an Obama-era rule reinstated by the Biden administration last year.

Areas to be protected include the Teshekpuk Lake, Utukok Uplands, Colville River, Kasegaluk Lagoon and Peard Bay Special Areas, collectively known for their globally significant habitat for grizzly and polar bears, caribou and hundreds of thousands of migratory birds.

Abigail Dillen, president of the environmental group Earthjustice, welcomed the new conservation plan, but said if the Biden administration believes it has authority to limit oil development in the petroleum reserve, officials should extend those protections to the Willow site.

“They have the authority to block Willow,″ she said in an interview Sunday.

Associated Press writers Becky Bohrer in Juneau, Alaska and Matthew Brown in Billings, Montana contributed to this story.

Biden administration to limit oil leasing in Arctic amidst ConocoPhillips’ “Willow” oil project approval

Jennifer A. Dlouhy, Bloomberg March 13, 2023

(Bloomberg) — President Joe Biden is limiting oil leasing in Arctic waters and sensitive areas of Alaska, taking steps to expand conservation as his administration prepares to approve a mammoth ConocoPhillips oil development in the region.

Biden is expanding an Obama-era ban on new oil and gas leasing in U.S. Arctic waters and will write new rules barring the sale of new oil drilling rights across much of the National Petroleum Reserve-Alaska, where ConocoPhillips’s 600 million-barrel Willow venture is planned, the Interior Department said in a news release.

Environmentalists have been imploring the administration to go further and reject the ConocoPhillips oil project, citing International Energy Agency warnings that the world must forsake developing new oil and gas fields to avoid the worst consequences of global warming and shift to net zero emissions by 2050.

Senior Biden advisers have signed off on the Willow approval — one of the most significant environmental decisions yet for Biden, who campaigned on promises to shift away from fossil fuels. He also enacted the Inflation Reduction Act, a sweeping climate law that dedicates more than $360 billion to clean energy and advanced manufacturing.

New restrictions intended for the National Petroleum Reserve-Alaska could thwart future oil and gas leasing across more than 13 million acres in the 23 million-acre site, which is roughly the size of Indiana.

The NPR-A was set aside for oil supply needs roughly a century ago and ConocoPhillips has held leases tied to its $8 billion Willow development since 1999. The Biden administration viewed that as limiting its options to stop or significantly curtail the Willow project, an administration official said.

Yet new conservation moves are seen by the administration as a firewall against future leasing and expanded oil development across much of the Arctic, the official added. 

The offshore development limits, imposed under a once-obscure 1953 law, build on former President Barack Obama’s 2016 decision to block new oil and gas leasing across most U.S. Arctic waters. Biden will expand the ban by effectively preventing future oil and gas leasing across the remaining 2.8 million acres of the Beaufort Sea north of Alaska.

The offshore leasing withdrawal “provides additional protections for Teshekpuk Lake, guarding against the potential that future Beaufort Sea oil and gas developments would seek to build onshore pipeline infrastructure into the NPR-A,” the Interior Department said in a news release.

Former President Donald Trump invoked the same 1953 law Biden is wielding now to rule out oil leasing in waters near Florida, Georgia and the Carolinas through mid-2032.

The Interior Department cast the actions as part of Biden’s work delivering “on the most aggressive climate agenda in American history,” after securing “record investments in climate resilience and environmental justice” and “reducing America’s reliance on oil.”

Environmentalists hailed the new conservation measures, but said they do nothing to make up for a potential approval of the Willow oil project.

While it would take years for crude to flow, ConocoPhillips eventually expects Willow to produce 180,000 bopd, or roughly 1.6% of current U.S. oil production.

Supporters have said that oil would be produced under stronger environmental protections than other crude supplies it could replace, helping boost U.S. energy security while providing an economic lifeline to Alaska’s North Slope.

Biden administration approves massive Willow oil project in Alaska

The Interior Department approved the project with three drill pads after saying last month it was concerned about the greenhouse gas impacts of Willow.

By

 Nichola Groom, Reuters, Valerie Volcovici, Reuters

 -

13 March 2023

1

A sign on the North Slope points the way to the two wells that are part of ConocoPhillips Willow discovery in the National Petroleum Reserve-Alaska, in this 2017 file photo. (Judy Patrick / ConocoPhillips)

LOS ANGELES/WASHINGTON — The Biden administration is approving a scaled-back version of ConocoPhillips’ $7 billion oil and gas drilling Willow project in Alaska, the U.S. Department of Interior said on Monday, drawing cheers from Alaska officials and the oil industry but criticism from environmental advocates.

The decision follows an aggressive eleventh-hour campaign from opponents who had argued the development of the three drill sites in northwestern Alaska conflicts with President Joe Biden’s highly publicized efforts to fight climate change and rapidly shift to cleaner sources of energy.

Alaska’s elected officials say the project will create hundreds of jobs and bring billions of dollars in revenue to state and federal coffers. The state relies heavily on revenue from oil production, but output has declined dramatically from its peak in the 1980s.

“I feel the people of Alaska have been heard,” U.S. Representative Mary Peltola, a Democrat from Alaska, said on a call with reporters. “The state of Alaska cannot carry the burden of solving our global warming issues alone.”

The fate of the project has been closely watched by Alaska officials, the oil and gas industry and green groups as Biden seeks to balance his goals of decarbonizing the U.S. economy with calls to increase domestic fuel supplies to keep prices low.

The Interior Department approved the project with three drill pads after saying last month it was concerned about the greenhouse gas impacts of Willow. ConocoPhillips had sought to build up to five drill sites and project infrastructure including dozens of miles of roads and pipelines and seven bridges.

The agency said the smaller scope will reduce the impact on habitats for species like polar bears and yellow-billed loons.

The administration also announced late on Sunday sweeping new protections for Alaska lands and waters that would keep nearly 3 million acres of the Beaufort Sea in the Arctic Ocean “indefinitely off limits” for oil and gas leasing, effectively closing off U.S. Arctic waters to oil exploration. It also issued protections for 13 million acres of “ecologically sensitive” special areas within Alaska’s petroleum reserve.

Teshekpuk Lake is seen in the National Petroleum Reserve Alaska. (Richard Kemnitz / BLM)

Environmental groups, however, criticized the Biden administration, saying it was trying to have it “both ways” on climate change.

“Promoting clean energy development is meaningless if we continue to allow corporations to plunder and pollute as they wish,” Food & Water Watch Executive Director Wenonah Hauter said.

Green groups have said they would challenge the project in court. U.S. Senator Dan Sullivan of Alaska said the congressional delegation is expecting an imminent legal challenge and is preparing an amicus brief to defend the project in court.

Houston-based ConocoPhillips welcomed Monday’s decision, having already endorsed the trimmed-down version of the project.

“This was the right decision for Alaska and our nation,” ConocoPhillips Chief Executive Ryan Lance said in a statement.

U.S. Senator Lisa Murkowski, an Alaska Republican, on Monday welcomed the “good news,” saying “this will mean jobs and revenue for Alaska” by bringing upwards of 180,000 barrels of oil per day into the Trans Alaska Pipeline.

Reporting by Nichola Groom in Los Angeles and Valerie Volcovici in Washington. Additional reporting by Susan Heavey in Washington and Toby Chopra.

Cyclone Freddy kills more than 60 on return to Mozambique, Malawi

ByFrank Phiri and Manuel Mucari
March 14, 2023 — 

Blantyre, Malawi: Mozambique and Malawi are counting the cost of Tropical Storm Freddy, which has killed more than 60 people, injured scores and left a trail of destruction as it ripped through southern Africa for the second time in a month over the weekend.

Freddy is one of the strongest storms ever recorded in the southern hemisphere and could be the longest-lasting tropical cyclone, according to the World Meteorological Organisation.

People cross a raging river in Blantyre, Malawi.

It pummelled central Mozambique on Saturday, ripping roofs off buildings and bringing widespread flooding around the port of Quelimane, before moving inland towards Malawi with torrential rains that caused landslides.

The full extent of the damage and loss of life in Mozambique in particular is not yet clear, as the power supply and phone signals were cut off in some parts of the affected area.


In Malawi’s main commercial hub of Blantyre, the central hospital had received at least 60 bodies by early afternoon, Doctors Without Borders (MSF) country director Marion Pechayre told Reuters by telephone, adding that some 200 injured were being treated in the hospital.

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The injuries were from falling trees, landslides and flash floods, she said. “A lot of [houses] are mud houses with tin roofs, so the roofs fall on people’s heads.”

Casualties were still arriving from affected areas, said Chipiliro Khamula, spokesperson for the department of disaster management.

Police spokesperson Peter Kalaya said rescue teams had been looking for people in Chilobwe and Ndirande, two of the worst-affected townships in the country’s second-largest city Blantyre, where it was still raining on Monday and many residents were without power.

“Some missing people are feared buried in rubble,” Kalaya said.

At least six people died in Mozambique’s Quelimane, which was struck hard by the storm, authorities told the public broadcaster on Monday.

The tropical cyclone caused widespread damage in Madagascar (pictured) and dumped “dangerous and exceptional rainfall levels” on Mozambique.

Scores more people were injured, Health Minister Armindo Tiago said on Radio Mozambique.

“The situation is critical in Zambezia province. We can’t advance with an accurate picture of the scale of damage because there’s no communications with all the regions,” he said from a hospital in Quelimane.

The total number killed by storm Freddy in Mozambique, Malawi and Madagascar since it first made landfall last month is now nearing 100.

Guy Taylor, chief of advocacy, communications and partnerships for UN children’s agency UNICEF in Mozambique, told Reuters from Quelimane that humanitarian agencies there did not have the capacity to deal with a disaster of this size.

“We saw a lot of destroyed buildings and clinics. People’s homes had their roofs torn off by the wind. Even before the cyclone hit we saw localised flooding,” he said.

The wind had died down on Monday but there was still a lot of flooding that had destroyed crops and created a risk of waterborne diseases, he said.

Mozambique has seen more than a year’s worth of rainfall in the past four weeks.

Malawi has been battling the deadliest cholera outbreak in its history, and U.N. agencies have warned the situation could now get worse. Scientists say climate change is making tropical storms stronger, as oceans absorb heat from greenhouse gas emissions and when warm seawater evaporates heat energy is transferred to the atmosphere.

Reuters