Biden urges Congress to hold bank executives accountable after collapses

Congress must take action to strengthen ability of federal government to hold senior management accountable, White House says

18/03/2023 Saturday
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US President Joe Biden on Friday urged Congress to action to hold senior bank executives accountable.

“Congress must take action to strengthen the ability of the federal government to hold senior management accountable when their banks fail and enter FDIC ( Federal Deposit Insurance Corporation) receivership,” the White House said in a statement.

“Specifically, when banks fail because of mismanagement and excessive risk taking, it should be easier for regulators to claw back compensation from executives, to impose civil penalties, and to ban executives from working in the banking industry again,” the statement added.

Biden called on the Congress to expand the FDIC’s authority to “claw back compensation” from executives of the “failed” banks, such as Silicon Valley Bank (SVB) and Signature Bank, and to strengthen the FDIC’s authority to bar executives from holding jobs in the banking industry.

He also urged Congress to expand the FDIC’s authority to fine the executives of the collapsed banks.

“The President is eager to work with Congress to strengthen accountability in these three areas – and others that Members of Congress identify,” the White House said, stressing that “no one is above the law.”

The two American banks collapsed in less than a week as the Federal Deposit Insurance Corporation (FDIC) took control of SVB’s and Signature Bank’s assets.​​​​​​​

East Palestine Soil Contains Dioxin Levels Hundreds of Times Over Cancer Risk Threshold

"I certainly wouldn't be comfortable living there," said one organic chemist.

Ohio EPA and EPA contractors collect soil and air samples from the Norfolk Southern train derailment site on March 9, 2023 in East Palestine, Ohio.
(Photo: Michael Swensen/Getty Images)

JAKE JOHNSON

COMMONDREAMS
Mar 17, 2023

East Palestine, Ohio residents' concerns about the enduring impact of last month's fiery train derailment are likely to intensify following the release of data showing that levels of dioxin in the soil near the wreck site are far higher than the cancer risk threshold recommended by federal scientists.

Dioxin is a toxic and carcinogenic byproduct of burning vinyl chloride, a hazardous chemical that at least five Norfolk Southern train cars were carrying when they derailed in early February, sparking a full-blown environmental and public health disaster.

Citing a report that Pace Analytical prepared for Ohio's neighbor Indiana, The Guardianreported Friday that "East Palestine soil showed levels of '2,3,7,8 TCDD toxicity equivalence' of 700 parts per trillion (ppt)," potentially stemming from the controlled burn of vinyl chloride in the wake of the crash.

"The level at which the EPA will initiate cleanup action in residential areas is 1,000 ppt," the newspaper explained. "However, the cleanup triggers are much lower in many states—90 ppt in Michigan, and 50 ppt in California... Moreover, EPA scientists in 2010 put the cancer risk threshold for dioxins in residential soil at 3.7 ppt, and the agency recommended lowering the cleanup trigger to 72 ppt."

The Obama administration tanked the EPA scientists' effort to formally lower the federal cleanup threshold, The Guardian noted.

Chemical experts and former EPA officials expressed alarm over the data while acknowledging it was limited to just two soil samples and more testing is needed.

"The levels are not screaming high, but we have confirmed that dioxins are in East Palestine's soil," Linda Birnbaum, former head of the U.S. National Toxicology Program, told The Guardian. "The EPA must test the soil in the area more broadly."

Carsten Prasse, an organic chemist at Johns Hopkins University, added that the dioxin concentrations in the soil samples examined are "actually concerning."

"My main concern is: is this reflective of the level in the area in East Palestine... and of the levels individuals who live near the rail are exposed to?" Prasse asked. "I certainly wouldn't be comfortable living there."

Despite outside experts' fears, EPA regional administrator Debra Shore insisted that the dioxin levels detected in the Indiana report are "very low."



The Guardian's reporting came days after Ohio's Republican attorney general filed suit against Norfolk Southern, accusing the rail giant of "recklessly endangering" East Palestine residents.

"Ohio shouldn't have to bear the tremendous financial burden of Norfolk Southern's glaring negligence," said AG Dave Yost said. "The fallout from this highly preventable incident may continue for years to come, and there's still so much we don't know about the long-term effects on our air, water, and soil."

In Congress, a bipartisan group of lawmakers is working to build support for legislation that would impose more strict regulations on trains carrying hazardous materials such as vinyl chloride.

During Senate testimony last week, Norfolk Southern CEO Alan Shaw refused to endorse the bill.

"If Norfolk Southern had paid a little more attention to safety and a little less attention to its profits—had cared a little more about the Ohioans along its tracks, and a little less about its executives and shareholders—these accidents would not have been as bad, or might not have happened at all," Sen. Sherrod Brown (D-Ohio), the lead Democratic sponsor of the Railway Safety Act, said during the hearing.

Protests resume across France after Macron forced through contested pension reform

Issued on: 18/03/2023

01:27

People took to the streets across France on Saturday after President Emmanuel Macron imposed an unpopular pension overhaul without a parliament vote.

Violence erupts at French pension protests for 3rd night

DW

5 hours ago

Authorities banned protests near the National Assembly building in Paris over plans to raise the retirement age. A location change failed to stop angry demonstrators from facing off with riot police.

Violence broke out between protesters and security forces for a third night in central Paris on Saturday over the government's decision to abandon a parliamentary vote on unpopular pension reforms.

President Emmanuel Macron's overhaul will raise the standard retirement age by two years to 64, which he says is essential to ensure the system does not go bust.

After ministers approved the plan by decree on Thursday, bypassing the lower house of parliament, rival opposition parties filed two separate no-confidence motions, which are due to be debated on Monday afternoon. They are expected to fail.

What happened on Saturday?

Police said around 4,000 people gathered in Place d'Italie after being banned from demonstrating close to the National Assembly building due to angry clashes on previous nights.

The ban was ordered because of "serious risks of disturbances to public order."

Le Monde newspaper said a group of protesters started trash fires, broke class on billboards and bus shelters and thew barriers, used to block streets, at police.



The paper said 73 people were arrested and just as on previous nights, riot police used tear gas and water cannon to disperse the crowd.

Earlier Saturday, dozens of students and activists marched through Paris' Forum des Halles shopping mall, chanting loudly and letting off red smoke.

Violence was also reported in the southeastern city of Lyon for a second night when small groups confronted police several times, prompting a response that included tear gas.

On Friday, more than 30 people were detained after a group of demonstrators tried to break into a town hall and set fire to the building.

French protest against Macron's pension reforms

01:46

Mostly peaceful marches took place in several other French cities, including Marseille, Montpellier and Nantes — where one placard read "Death to the king," seemingly in reference to Macron.

Workers continued protests in several cities over the government's handling of pension reforms

STEPHANE MAHE/REUTERS

What next for the protest movement?

A broad alliance of France's main unions has said it would continue to mobilize members to try to force a U-turn on the pension changes.

Some unions ordered workers to continue their rolling strikes, severely affecting high-speed and regional rail services this weekend, among other services.

Paris' municipal rubbish collectors have kept up their action, and by Friday an estimated 10,000 tons of trash were left festering in the streets.

Some French airports will see almost a third of flights canceled on Monday as a result of walkouts, union leaders predicted.

The CGT union said its members had shut down the TotalEnergies oil refinery in Normandy on Friday evening. A similar blockade of a refinery in southern France began earlier in the day.

A day of nationwide industrial action is also scheduled for Thursday — the ninth since mid-January.

Public hostility not enough to quash plans

Opposition to the pension reform was already high, with two-thirds of the French population against the plan, according to polls.

But the sudden move to avoid a parliamentary vote, invoking the controversial article 49.3 of the constitution, caused not only public outrage but also criticism among the political class.

French government forces through pension reform

01:54

In parliament next week, opposition lawmakers hope to garner enough support to topple the cabinet in the no-confidence votes and repeal the law.

But Prime Minister Elisabeth Borne's cabinet is largely expected to survive.

The motion would need backing from around half the group of opposition right-wing Republicans, a scenario seen as highly improbable. They would also need the shared support of the powerful extreme left and extreme right factions in the National Assembly.

Macron put the pension reforms at the center of his re-election campaign last year.

While his government argued France needed to fall in line with its European neighbors where the retirement age is typically higher, critics say the changes are unfair to people who work from a young age in physically tough jobs and women who interrupt their careers to raise children.

The unrest is reminiscent of the Yellow Vest protests which erupted in late 2018 over high fuel prices, which forced Macron into a partial U-turn on a carbon tax.

Macron had also planned pension reforms for his first term as president but had to row back on the idea, campaigning last year on a pledge to finish the job.

mm/msh (AFP, AP, Reuters)

FRIDAY

France: Pension reform spells crisis for Macron

Lisa Louis in Paris
03/17/2023

March 17, 2023

French President Emmanuel Macron is trying to push through a pension reform without a parliamentary vote. That has triggered a political crisis ― and could help the far right.

It was an extraordinary scene that epitomized the political storm France has walked into.

As Prime Minister Elisabeth Borne was making her way to the National Assembly's podium Thursday afternoon, lawmakers from the opposition stood up, chanting the Marseillaise and holding signs saying "no to 64 years" and "democracy."

The Assembly's president interrupted the session for things to calm down.

But when Borne took the floor a few minutes later, she still had to drown out the parliamentarians' boos.

"Based on article 49.3 of the constitution, I engage the government's responsibility," she yelled, announcing that a controversial pension reform increasing France's minimum retirement age from 62 to 64 years would be pushed through without a vote in the lower house of parliament.

"No to 64 years!" Prime Minister Borne was faced with protest from parliamentarians as she announced the pension reform

PASCAL ROSSIGNOL/REUTERS

'Something's not right in the French political system'

Paragraph 3 of Article 49 allows the prime minister to act unilaterally. The only way to stop a bill that was passed under this rule would be to bring down the government.

"What happened was absolutely unheard of ― it was terrible to see how the National Assembly went completely crazy," Bruno Cautres from Paris-based think tank Centre for Political Research told DW.

Headwinds against what was by many perceived as an authoritarian move were also blowing outside the parliament, following weeks of protests against the pension reform.

Thousands of demonstrators took to the streets of Paris and other cities across the country, some of them staying late into the night and clashing with riot police. Further protests are expected over the weekend.

"This highlights that something's not right in the French political system ― we can see that in our regular polls, which show that people want a more participative democracy where unions and civil society are involved in the elaboration of legal texts," Cautres said.

Opposition parties have filed two no-confidence motions that will be put to the vote on Monday.

Will the government to survive the no-confidence vote?

The French government has received the support of the leaders of the conservative Republicans. Their 60 votes would give President Emmanuel Macron's minority coalition the needed majority to fend off the no-confidence votes.

And yet, the same leaders had already pledged their party's backing for the pension reform. But not enough Republicans agreed to follow that lead, which is why President Macron deemed a parliamentary majority for his reform unlikely and decided to trigger the 49.3.

Vincent Martigny, a professor for political science at Nice University and Paris-based Ecole Polytechnique, thinks the move has plunged France into a political crisis that is here to stay, at least in the medium term.

While President Macron's job is not directly threatened, running the country seems set become a headache.

French protest against Macron's pension reforms

01:46

Government is 'fatally injured'

"The government in its current form is fatally injured, just like during a corrida, a bullfight," Martigny said to DW, adding that PM Borne would almost certainly have to step down.

"If one of the no-confidence votes gets through, the government will fall and the president is likely to dissolve the National Assembly," Martigny said.

"If the government survives the vote, Macron can either withdraw the reform, which seems highly unlikely, or stick to it, which will spark a social crisis with consequences unknown that could include snap parliamentary elections," he added.

The president, meanwhile, argues France needs the reform to maintain its financial credibility on international markets, where it refinances its debt that stands at about 110 percent of France's GDP.

"I consider that the financial and economic risks [of not carrying out the reform] are too big," Macron said in front of the cabinet on Thursday, as per a statement from his office.

"But as opposed to people in countries like Germany, the French don't care about public debt – for them, it's a side issue," Martigny underlined.

Macron's path ahead is unclear after he pushed through his unpopular pension reform

STEPHANE MAHE/AFP

A country with 'welfare nationalism'

The pension system, by contrast, lies at the heart of their concerns.

"The French practice what I'd call welfare nationalism ― they are very attached to their system of redistribution and consider it as a crucial part of their identity," Martigny said.

He added that even in politically stable times, it was a challenge to carry out welfare reforms in France.

"But we are in dire economic times with a war in Ukraine and rising inflation. On top of that, Macron has hardly negotiated with the unions and wants to push the reform through by force," Martigny said. "All this is causing a huge uproar."


Is there a way out of the political crisis?

Cautres from the Centre for Political Research thinks the only way for Macron to get back into calmer political waters in the medium term is to reach a majority in parliament.

"Either he forms a stable coalition agreement with the Republicans or he dissolves the National Assembly hoping for a better result in the subsequent parliamentary elections," the expert said.

But Benjamin Morel, a political analyst and lecturer for public law at University Paris 2 Panthéon-Assas, doubts these strategies will work.

"The Republicans are not reliable partners ― they seem to be a group of free electrons without much party discipline," he told DW.

And snap parliamentary elections could harbor another risk.

"The far right is likely to gain ground, as it has managed to build up a respectable image during the debates in parliament while being against the reform and on the side of the people. And democratic fatigue, as we are seeing it now, often leads to either abstention or a vote for the extremes," Morel said.

Edited by: Carla Bleiker

Paris drowns in garbage amid strikes

Several unions are on strike to protest a pension reform, with garbage collectors among those to walk out. Now, streets are filling up with garbage and its stench. The strike is expected to last at least until Monday.

Image: Stevens Tomas/ABACA/dpa/picture alliance

Weeks of protest in France
For weeks, hundreds of thousands of people have taken to the streets across France to protest against the government's planned pension reform. On Wednesday, too, people gathered for protest marches in the course of the afternoon — as here in Paris. Nationwide, police expect slightly fewer participants than last time: around 750,000 demonstrators.

Aurelien Morissard/AP Photo/picture alliance

Untold masses of trash

Critics say the planned increase in the retirement age from 62 to 64 could be particularly hard on people in physically demanding jobs. Public sector workers have gone on strike, with garbage remaining uncollected in many cities for more than a week. Thousands of tons of garbage are already piling up on the streets of the capital, Paris, alone.

Rats in tourist hotspots
Rats are everywhere, one woman told the French AFP news agency: "It's disgusting. Some people can hardly get into their houses anymore." One German tourist said she had been wanting to take a romantic trip with her partner but that the trash had spoiled the city's charm. " Mark from the US complains, "It's unsanitary and not good for tourism."

Reform against the will of the people?
Around 70% of people in France reject the reform. Socialist Paris Mayor Anne Hildago is also backing the strikers. She is fully behind the protests, she declared on Monday: "If this affects people who work in the public sector — as well as those who are employed by private companies — then I say to the government: Talk to them!"

Waiting for action — but for how long?

It is not ye clear when the garbage trucks will leave their garage at the waste incineration plant in Ivry-sur-Seine. For Natacha Pommet, general secretary of the CGT General Confederation of Trade Unions, the government is responsible for the strike: "The problem is that we have a government that is desperate to implement a reform that the majority of people don't agree with."

Hopes for last-minute change of plan

Public sector workers wanted to continue striking at least until next Monday. Meanwhile, a mediation committee is meeting in Parliament. The government is confident that the Parliament will finally approve the reform on Thursday; the Senate has already agreed. The strikers, on the other hand, continue to hope that they will be able to stop the reform plans at the last minute.

Is German industry migrating to the US?

Klaus Ulrich

DW

18/03/23

The Biden administration is luring companies with big subsidies. What would it mean for Germany as a business location if German companies were to invest more in the US and build new production sites there.

German companies love America. According to the German-American Chamber of Commerce, around 5,600 of them have invested in the US market. As of September 2022, that's an investment volume of almost $650 billion (€605 billion). And it's not only big firms like Siemens, Volkswagen or Linde that are currently looking to strengthen their commitment to the United States — in some instances, even building entire new production facilities.

"There are various reasons for it," says Dirk Dohse, who heads the Innovation and International Competition Research Center at the Kiel Institute for the World Economy (IfW). "One is the increase in geopolitical tensions. Many German companies see the US as a 'safe harbor.' Other reasons are the comparatively low energy costs and the very generous subsidies provided under the Inflation Reduction Act."
Inflation Reduction Act is attracting companies

The Inflation Reduction Act (IRA) is a multi-billion-dollar subsidy program initiated by the US government under President Joe Biden. Despite its name, its goal is not so much reducing inflation as climate protection. There are around 430 billion dollars in the IRA pot, of which 370 billion are earmarked for the promotion of CO2-saving technologies, with rest designated to go toward healthcare.

Joe Biden's Inflation Reduction Act seeks to bring investment back to the US

However, the subsidies and tax credits are linked to the companies benefitting from them either using American products or manufacturing their own products in the United States. Thus, for example, the buyer of an American electric car with a battery that was also made in the USA would receive a premium of around 7,500 dollars. Wind turbines or solar farms with American components will also be subsidized. From an American perspective, primary products from countries with which the US has a free trade agreement, such as Mexico or Canada, are also acceptable.
Companies are already reacting

The US government's subsidy plans under the IRA have already resulted in delays to electric car battery production plants in Germany, or the threat of them being stopped altogether — Tesla in Grünheide near Berlin, for example, or the Swedish company Northvolt, which has been planning to build a factory in Heide, Schleswig-Holstein, but will now probably invest in the US first.

So should Germany be worried about its status as a manufacturing location? "It's true that the manufacturing sector's share of the total value added in Germany has been declining since 2016," says Dirk Dohse of the IfW. "However, we're also starting at a high level. I don't see deindustrialization happening across the country."

There's a Tesla factory just outside Berlin but the US wants jobs to move back home

Patrick Pleul/dpa/picture alliance

Chancellor Olaf Scholz and the president of the EU Commission, Ursula von der Leyen, have already made representations to US President Joe Biden, warning that the lavish US subsidies may lead to a distortion of competition for European companies vis-a-vis their US rivals.

Shortly afterward, it was announced that Brussels intends to counter the IRA with its own green program for industry, and will also give EU states greater freedom to provide subsidies of their own.
Danger of a "subsidy spiral"

Economists think a confrontation like this would be a dangerous move. "I don't think we should get into a race for subsidies," says Dohse. "In the end, this is taxpayers' money. We need to think carefully about whether this is going to pay off for society in the long term."

Amazon is one of the American companies with the highest turnover in Germany

 Stefan Ziese/Zoonar/picture alliance

It was, he said, extremely disappointing when innovative companies, such as those working in the field of "green technologies," which have been grown, sustained and nurtured with German or European taxpayers' money, are then enticed to the US by the subsidies available to them there. "But throwing more taxpayers' money after them is not the solution," Dohse says. He suggests that one approach to consider would be linking individual federal subsidy programs for young companies to a certain degree of loyalty to location.

Germany as a location: praise and criticism

So if many German companies are investing more heavily in the United States in order to benefit from the IRA subsidies, how do internationally active American companies rate Germany as a business location?

"Europe's largest economy remains an important and attractive location for many US companies," Simone Menne, the president of the American Chamber of Commerce in Germany (AmCham Germany), told DW. "Its many very well-trained skilled workers, dense infrastructure networks, first-rate technical colleges and universities, great political stability, strong presence on the EU market, and other factors are important arguments in favor of investing in Germany."

The American car maker Ford is based in the western German city of Cologne

 Oliver Berg/dpa/picture alliance

However, the annual Transatlantic Business Barometer, the latest edition of which was published on March 16, is less optimistic. According to this AmCham Germany survey of US companies in Germany, the country's location rating dropped in 2023 for the third year in a row.

In last year's Business Barometer survey, 59% of US companies in Germany rated their location as "good or very good." In 2023, that figure went down to 34%. There is praise for the quality of the workforce (94%), supplier networks (68%), and research and development (68%). However, only 38% of the US companies expected Germany to improve as a location over the next three or four years, compared to 43% in 2022.
High energy prices are a deterrent

However, it is also the case that many of the American companies surveyed in Germany in 2022 reported an increase in turnover (68%), number of employees (42%), and investment (42%). 53% of those surveyed expect their turnover to increase in 2023, and the same number said they would be expanding their operations over the next three to four years.

The disadvantages they see in Germany are the cost of labor, the digital infrastructure, and a lack of skilled workers. However, they reserved their strongest criticism for the high energy prices, even compared to other countries, and even before Russia instigated the war in Ukraine.

Apple CEO Tim Cook at the company's engineering hub in Munich where they plan fresh investments

 Apple/dpa/picture alliance

"They play an important part in location decisions, especially with energy-intensive companies," says the AmCham president, Simone Menne. Germany therefore needs to be even more convincing in other ways, she says. It must improve its offer by securing skilled workers, reducing bureaucracy, and broadening digitalization. "This will be helpful not only in securing investment from the United States," Menne says.

IfW economist Dirk Dohse points to a decision by the US technology giant, Apple: It is about to spend another billion euros extending its chip design center in Munich. "If Germany invests wisely in research, training, and infrastructure, instead of wasting taxpayers' money on subsidies, it will remain an attractive location for foreign investors in the future," Dohse believes.

This article has been translated from German.

UBS in talks to acquire embattled Credit Suisse: Financial Times

Mega-merger in Swiss banking sector could be on the cards

 Times of Malta | 03/18/2023

Credit Suisse could be bought up by UBS. Photo: AFP

Switzerland's largest bank, UBS, is in talks to buy all or part of Credit Suisse, according to a report by the Financial Times.

Credit Suisse -- Switzerland's second-biggest bank -- came under pressure this week as the failure of two US regional lenders rocked the sector. By the close of markets Friday, its shares had dropped eight per cent.

The Swiss National Bank (SNB) and financial markets watchdog FINMA told their US and British counterparts their "plan A" to stop the crisis of confidence facing Credit Suisse was to merge it with UBS, the FT reported Friday, citing unnamed sources.

The Swiss central bank "wants the lenders to agree on a simple and straightforward solution before markets open on Monday", the source said, while acknowledging there was "no guarantee" of a deal.

UBS wants to assess what risks a full or partial takeover of its rival could pose to its own business, another source told the FT.

When reached by AFP, both SNB and Credit Suisse declined to comment, while UBS and Finma did not respond immediately.

Credit Suisse, which has been in turmoil for two years, has been seen as a weak link in the banking sector due to a series of scandals and a major restructuring programme launched last October.

Its market value took a heavy blow this week over fears of contagion from the collapse of two US banks -- Silicon Valley Bank and Signature Bank -- along with the publication of its annual report, which cited "material weaknesses" in internal controls.

But shares nosedived to historic lows Wednesday after its main shareholder, Saudi National Bank, said it would not raise its stake in the group due to regulatory constraints.

By Wednesday evening, SNB had stepped in with a $53.7 billion lifeline to reinforce the group.

The idea of a takeover by UBS was also floated this week by analysts at JP Morgan, calling it "the most likely" scenario.

The idea of Switzerland's biggest banks joining forces regularly resurfaces but is generally dismissed due to competition issues and risks to the Swiss financial system's stability, given the size of the bank that would be created by such a merger.

UBS and Credit Suisse: similar Swiss banks with differing fortunes


Nathalie OLOF-ORS
Sat, March 18, 2023 


UBS and Credit Suisse, the two biggest banks in Switzerland, are in takeover talks, according to several media -- a move long deemed unthinkable as the pair are so similar.

The negotiations, which would see UBS take over its embattled smaller domestic rival, are being orchestrated by the Swiss regulators in an attempt to reassure the markets before they re-open on Monday.

Credit Suisse is still looking shaky despite taking a $54-billion lifeline thrown by the Swiss central bank. Investors remain nervous about its future following the collapse of two banks in the United States that sparked contagion fears.

During the week, US analysts had already floated the possibility of a takeover by UBS, which made a healthy $7.6 billion dollars in net profit in 2022.

Rivals Credit Suisse, headquartered no more than 300 metres away in central Zurich, meanwhile suffered a loss of 7.3 billion Swiss francs ($7.9 billion).

- Wealth management, investment banking -

Both banks derive most of their revenue from wealth management and investment banking.

UBS is the world leader in wealth management and generated nearly 15 percent of its $34.5 billion in turnover in 2022 through this global arm.

At Credit Suisse -- level with the United States' Morgan Stanley in second place -- wealth management contributed 22 percent of the 22.4 billion Swiss francs in turnover.

Investment banking represents 25.2 percent of UBS's turnover, compared to nearly 20.6 percent at Credit Suisse, with the pair running many similar activities such as mergers and acquisitions advice.

In October, Credit Suisse began a major restructuring project that plans to separate its investment banking from the rest of its activities, after a series of scandals.

However, many investors consider the revamp to be too complex -- and UBS might want to steer clear of taking over Credit Suisse's problematic investment banking.

- Retail banking in Switzerland -

Both banks are active in asset management and retail banking. UBS relies on a network of nearly 200 branches in Switzerland, compared to 95 for Credit Suisse.

The Swiss domestic branch of Credit Suisse, considered one of its jewels, is particularly active in mortgages and loans to small- and medium-sized businesses.

In a note Thursday, analysts at US financial services giant JPMorgan thought this arm of Credit Suisse would probably have to be spun off or listed separately on the stock exchange in the event of a merger.

Switzerland's Competition Commission might be reluctant to approve a merger in this field.

- Pillars of Swiss banking -

UBS and Credit Suisse are at the apex of banking in a country known worldwide for its banking industry.

UBS, in its modern form, was born in 1998 when the Swiss Bank Corporation merged with the Union Bank of Switzerland.

SBC's origins date back to 1854 when six wealth management establishments in Basel joined forces, while the Union Bank of Switzerland dates back to 1852 and the creation of a bank in Winterthur, a city at the heart of the industrial revolution in Switzerland.

Credit Suisse was born around the same time in 1856, at the instigation of Alfred Escher who wanted to finance the Swiss railway boom.

Credit Suisse has also contributed to the emergence of insurance stalwarts, such as Swiss Life and Swiss Re, and industrial giants like Brown Boveri, ancestor of the ABB engineering group.

Today the two banks are global groups, with UBS employing 72,597 people and Credit Suisse 50,480.

- Careers crossing between banks -

With the two banks' headquarters so close to each other, it is not uncommon for careers to be made with one and then continue at the other.

Credit Suisse chairman Axel Lehmann spent more than 11 years at UBS before being called to the rescue in 2021 to turn Credit Suisse around.

And Credit Suisse chief executive Ulrich Korner left the bank to join UBS before returning, first to save the asset management branch and then the whole bank by taking the CEO hotseat.

noo/rjm/jj

Troubled bank stocks drop despite $84bn liquidity boost

03/17/2023

European shares logged their steepest weekly drop in five months amid continued turbulence in the global banking sector. German Chancellor Olaf Scholz doesn't think Europe is heading for a new financial crisis.

Shares of First Republic Bank and Credit Suisse dove back deep into the red on Friday as concerns of a wider banking crisis in the United States and Europe remained elevated.

The US regional lender's perceived value slumped 25% while Switzerland's second-largest bank closed down 8%, despite massive financial lifelines thrown by regulators over the previous 24 hours.

Larger US banks, including JPMorgan Chase & Co and Morgan Stanley, stepped in on Thursday to inject $30 billion (€28 billion) into First Republic to prevent it from suffering a run by depositors similar to Silicon Valley Bank and Signature Bank — two regional lenders that went under last week.

The shoring up of First Republic reflected "funding and liquidity strains on banks, driven by weakening depositor confidence," said ratings agency Moody's, which this week downgraded its outlook on the US banking system to negative.
Swiss intervention buys time

In Europe, the Swiss central bank gave Credit Suisse an emergency loan of up to $54 billion, also on Thursday.

But many analysts, investors and bankers think the loan facility has only bought Credit Suisse some time to work out what to do next.

The US and Swiss moves did initially boost stock markets. However, the selloff resumed Friday and the stock prices of other major banks also fell, with JP Morgan, Citigroup and Bank of America down at least 3% at one point. Many of their European peers ended Friday down around 1.5%.

Bank fears spread as Credit Suisse gets help

02:25

Eswar Prasad, a Cornell University economist, said Credit Suisse has become "an important bellwether of fragilities in the global banking system" and if it failed, it could shake confidence in the banking system, causing further central bank intervention.

In a sign of falling confidence, Morningstar Direct said the Swiss bank had seen more than $450 million in net outflows from its US and European-managed funds from March 13 to 15.

Reuters, meanwhile, cited five unnamed sources as saying that at least four major banks, including Societe Generale SA and Deutsche Bank AG, have put restrictions on their trades involving Credit Suisse Group AG or its securities.
Scholz says no 'danger' of new financial crisis

Despite the market volatility, German Chancellor Olaf Scholz told business daily Handelsblatt Friday that he doesn't believe that Europe is heading for a crisis.

"I don't see that danger," Scholz said, adding that deposits are safe. "We live in a completely different time," he told the paper, referring to comparisons with the 2008 financial crisis. Scholz is also a former finance minister.

Meanwhile, Reuters reported Friday that supervisors at the European Central Bank (ECB) saw no contagion for eurozone banks from the turmoil.

A source told the news agency that members of the Single Supervisory Board were told deposits remained stable across eurozone banks. Exposure to Credit Suisse was said to be immaterial.

The meeting — a reaction to rapid developments in the banking sector and market jitters — was the second of its kind this week.

Despite the reassurances, investors are betting that banking jitters would rein in the ECB's ability to raise interest rates much further after the central bank hiked by 0.5% on Thursday.

All eyes on next Fed meeting

Focus now shifts to the US Federal Reserve next week, with traders now seeing a 67% likelihood of a smaller 0.25% increase in interest rates in the world's largest economy.

Speculation on when the Fed might start slowing its increases had been ripe for months, but the SVB collapse poured fuel on that fire last week.

SVB's demise was largely blamed on the sharp rise in borrowing costs, and concerns that other banks could suffer a similar fate, even sparking speculation that the Fed could cut rates to provide some stability. However, SVB's critics see the fault lying in the bank's own strategic errors, remaining overexposed to low-yield, long-term bonds even as interest rates and inflation were wiping out their returns.

Later Friday, SVB Financial — the parent company of Silicon Valley Bank — filed for a court-supervised reorganization under Chapter 11 bankruptcy protection.

The filing sets up a legal battle over the bank's remaining assets between the creditors of the holding company and regulators who are looking to make depositors whole.

SVB Financial Group believes it has approximately $2.2 billion of liquidity and has said it has other valuable securities and assets that are being considered for sale.

mm/msh (AFP, AP, Reuters)

Credit Suisse to borrow $54 billion from Swiss central bank

The move to borrow from the Swiss National Bank makes Credit Suisse the first major global bank to be extended such a lifeline since the 2008 global financial crisis.


DW

03/16/2023
https://p.dw.com/p/4OkND

Switzerland-based global bank Credit Suisse AG said it would borrow 50 billion Swiss francs (€50.7 billion, $54 billion) from the country's central bank on Thursday, in a move meant to strengthen its liquidity and deposit reserves.

Shares of the embattled investment bank and financial firm soared in trading after the announcement, which followed the worst trading day in Credit Suisse's history.

What's so significant about the move?

The move to borrow from the Swiss National Bank (SNB) makes Credit Suisse the first major global bank to be extended such a lifeline since the 2008 global financial crisis. Swiss authorities on Wednesday said Credit Suisse met "the capital and liquidity requirements imposed on systemically important banks" and that it could access central bank liquidity if needed.

Central banks across the world extend liquidity to banks during periods of market turmoil, including that induced by the COVID pandemic. The steps come during a severe slump in Credit Suisse's share price that triggered larger fears of a broader bank deposit crisis.

The bank also made a buyback offer on $2.5 billion worth of US debt and €500 million in European debt.

"These measures demonstrate decisive action to strengthen Credit Suisse as we continue our strategic transformation to deliver value to our clients and other stakeholders," said the investment firm's Chief Executive Officer, Ulrich Körner.

What triggered the selloff?

Credit Suisse's stock fell as much as 30% on Wednesday triggered by a Bloomberg TV interview where Mr. al-Khudairy of the Saudi National Bank — Credit Suisse's largest shareholder — said it would "absolutely not" push more liquidity into the bank. He later clarified that his staunch position was to abide by regulatory rules and statutory limitations.

The market, already on edge from last week's collapse of two mid-size US firms Silicon Valley Bank and Signature Bank, continued to sell Credit Suisse shares despite reassurance that the bank had a strong liquidity base with a 150% cash deposit ratio. A cash deposit ratio is the amount of money a bank should have available as a percentage of the total amount of money its customers have deposited in the bank.

Meanwhile, two supervisory sources told Reuters news agency that the European Central Bank had contacted banks on its watch to question them about their exposures to Credit Suisse. The US Treasury also said it is monitoring the situation around Credit Suisse and is in touch with global counterparts, according to a Treasury spokesperson.

mk/sms (Reuters, AFP)

IF COMPASSION IS SPELLED;'BIGOTRY'
Britain defends Rwanda asylum plan as 'compassionate'

March 19, 2023 - 

The UK's conservative government has made tackling illegal immigration a priority

Britain's interior minister defended a controversial plan to deport asylum seekers arriving in the UK to Rwanda during a visit there Saturday, when she inspected the centres where they will be held.

"Many countries around the world are grappling with unprecedented numbers of illegal migrants," said Suella Braverman.

The agreement between Britain and Rwanda "will lead the way in finding a solution which is both humanitarian and compassionate and also fair and balanced", she added.

Braverman was speaking after a visit to the Bwiza estate where the centre for the resettled migrants is being built, and declared herself "incredibly impressed" with what she had seen.

She spoke to journalists at a news conference attended by Rwanda's Foreign Minister Vincent Biruta, who also defended the agreement signed between the two countries.

"This will not only help dismantle criminal human-smuggling networks, but also save lives," he said.

The UK's conservative government has made tackling illegal immigration a priority, and it was a key promise as the country left the European Union.

It is seeking to outlaw asylum claims by all illegal arrivals and transfer them to "safe" third countries, such as Rwanda, in a bid to stop thousands of migrants from crossing the Channel on small boats.

- 'Safe passage, not Rwanda' -

More than 45,000 migrants arrived on the shores of southeast England on small boats in 2022 -- a 60-percent annual increase on a perilous route that has been used by more people every year since 2018.

Britain's government, which is trailing in opinion polls, has been striving for years to tackle the crossings.

It had hoped the threat of a one-way ticket to Rwanda, where migrants would remain if accepted for asylum, would deter the cross-Channel journeys.

But that plan, announced by the then prime minister Boris Johnson last year, was blocked at the last minute by the European Court of Human Rights (ECHR), which is separate to the EU.

The government scheme is still mired in appeals in the High Court in London. To date, no deportation flights to Rwanda have taken place.

Rights groups accuse Rwanda -- ruled with an iron fist by President Paul Kagame since the end of the 1994 genocide that killed around 800,000 people -- of cracking down on free speech and opposition.

In Britain on Saturday, thousands of people took to the streets of cities including London, Glasgow and Cardiff to demonstrate against the plan.

Protesters in the British capital carried signs reading "no human being is illegal" and "Safe passage, not Rwanda".

Some British media including the BBC and The Guardian newspaper were not invited to cover the interior minister's visit to Rwanda.

str-dyg/jj/imm

Britain defends Rwanda asylum plan as 'compassionate'

Some British media including the BBC and The Guardian newspaper were not invited to cover the interior minister’s visit to Rwanda

British Home Secretary Suella Braverman (centre) defended a controversial plan to deport asylum seekers to Rwanda, during a visit to the country on March 18, 2023. 

PHOTO: REUTERS

KIGALI - Britain’s interior minister defended a controversial plan to deport asylum seekers who arrive in the UK illegally to Rwanda during a visit to the country on Saturday, saying it was “compassionate”.

The UK’s conservative government has made tackling illegal immigration a priority, and it was a key promise as the country left the European Union.

It is seeking to outlaw asylum claims by all illegal arrivals and transfer them to “safe” third countries, such as Rwanda, in a bid to stop thousands of migrants from crossing the Channel on small boats.


“I sincerely believe that this world-leading partnership between two allies and two friends, the United Kingdom and Rwanda, will lead the way in finding a solution which is both humanitarian and compassionate,” Home Secretary Suella Braverman said in Kigali.

She spoke alongside Rwandan Foreign Minister Vincent Biruta, who said the move “will not only help dismantle criminal human-smuggling networks, but also save lives”.

More than 45,000 migrants arrived on the shores of south-east England on small boats last year – a 60 per cent annual increase on a perilous route that has been used by more people every year since 2018.

‘Safe passage, not Rwanda’

The government, which is trailing in opinion polls, has been striving for years to tackle the crossings.

It had hoped the threat of a one-way ticket to Rwanda, where migrants would remain if accepted for asylum, would deter the cross-Channel journeys.

But that plan, announced by former prime minister Boris Johnson last year, was blocked at the last minute by the European Court of Human Rights (ECHR), which is separate to the EU.

It was then upheld by the High Court in London, but has been mired in appeals. No flights to Rwanda have yet taken place.

MORE ON THIS TOPIC

Britain unveils plan to detain and deport all Channel migrants

Britain tenders $100m contract to transport migrants

Rights groups accuse Rwanda – ruled with an iron fist by President Paul Kagame since the end of the 1994 genocide that killed around 800,000 people – of cracking down on free speech and opposition.

In Britain on Saturday, thousands of people took to the streets of cities including London, Glasgow and Cardiff to demonstrate against the plan.

Anti-racism protesters in the British capital carried signs reading “no human being is illegal” and “Safe passage, not Rwanda”.

Some British media including the BBC and The Guardian newspaper were not invited to cover the interior minister’s visit to Rwanda

AFP

Etgar Keret: Israel's democracy is in danger

Stefan Dege

DW
18/03/23
In Israel, protests against Prime Minister Benjamin Netanyahu's planned judicial reform have been going on for weeks. Cultural activists say Israel's democracy is in danger. Writer Etgar Keret explains why.

Etgar Keret is a superstar of Israel's literary scene. The Jewish Museum in Berlin is currently dedicating an exhibition to him titled "Inside Out" in which the author's work and life is presented. Keret, who was born in 1967 in Israel, is considered a master of short story writing and stands firm on his political views, including protesting the judicial reform in his country. "All the demonstrators have one thing in common," Keret said back in February in an interview with journalist Uri Schneider reporting for DW from Israel, "they don't want democracy to be robbed from them."

Keret is also one of the signatories of a letter to the ambassadors of Germany and the UK in Israel. In the letter, around 1,000 Israeli artists, writers and intellectuals called for Prime Minister Benjamin Netanyahu's inaugural visits to Berlin and London to be cancelled.

According to a report in the Israeli news outlet "Haaretz," the cultural activists who signed the letter say Israel is in the most serious crisis in its history and is "on the way from a vibrant democracy to a theocratic dictatorship." Prominent signatories include writer David Grossmann and sculptor Sigalit Landau. Nevertheless, Netanyahu arrived in the German capital on March 16 where he met German Chancellor Olaf Scholz and German President Frank-Walter Steinmeier.

Israelis protest proposed judicial overhaul
02:21

Less power for the Supreme Court

The new reform calls for more power for the government and less rule of law controlled by an independent judiciary. Critics accuse Netanyahu and his right-wing religious coalition of weakening the judicial system and thus undermining democracy. The government in Jerusalem, which has been in office since December, wants the reform to strengthen its influence in selecting judges, among other things.

Under the new law, the Supreme Court's powers will be restricted. Authorities justify such a move with claims that judges have interfered in politics. Netanyahu, who is in coalition with ultra-Orthodox and right-wing extremists, is currently facing trial for corruption charges. "The whole state," Keret says, "is hostage to this man who — like Nero or Caligula — considers himself more important than the state."

"This protest movement doesn't need writers to explain the world," Keret said in the interview. "Every liberal democrat understands that a court under the control of the prime minister is a weak court." The same is true, he said, if the government hires a "misogynist, homophobic racist" in the Education Ministry. "My son then learns misogynistic and homophobic attitudes. You don't have to be a genius to understand that. Everybody gets that."

Benjamin Netanyahu visited Chancellor Scholz in Berlin on March 16, 2023

Matthias Rietschel/REUTERS

A widespread protest movement

In Keret's observation, the protest movement unites people in Israel, across political divides. "In my whole life, I've never been to demonstrations with so many people with whom I have almost nothing in common," reports Keret. "To my left are hipsters with a joint in their mouth, to my right are high tech entrepreneurs, and behind me are communists. A range of rich and poor, people from the army and conscientious objectors." What they all have in common, he said, is a fear of losing democracy.

Older people in particular took to the streets. There's a reason for that, Keret said, and it's because Israel is a country of immigration. "A large part of the people who came here did so because they watched the democracies they came from collapse." Older people in particular shaped the image of the demonstrations today, he said, "They are the ones who come week after week. In the rain. In the cold. Maybe because they know the price we will pay if these government plans go through."

Protesters against the judicial reform have taken to the streets in recent weeks

Saeed Qaq/imago images/ZUMA Wire

Religious fundamentalists in the government

The State of Israel, founded in 1948, defines itself as Jewish and democratic, Keret said. "But it's actually a Jewish state that is also democratic as a hobby." Those who talk to members of the religious camp, he said, are told: "Democracy is a temporary phenomenon." Judaism existed before and will exist after democracy, he said. "They don't care about the weakening of democracy, because in the end only God decides anyway."

The interview was conducted by Uri Schneider and this article was translated from German.

SEE LA REVUE GAUCHE - Left Comment: Search results for CARL SCHMITT 

Israelis protest for 11th consecutive week against Netanyahu's judicial reform plans

Issued on: 18/03/2023 - 

Text by:NEWS WIRES

Israelis gathered in towns and cities nationwide on Saturday for an 11th straight week of protests against the judicial reform plans of the hard-right government of Prime Minister Benjamin Netanyahu.

The protesters fear that the proposed reforms, which are already moving through parliament and would increase the power of politicians over the courts, are a threat to Israeli democracy.

In Tel Aviv's Dizengoff square, thousands of demonstrators waved the blue and white Israeli flag of Israel, as well as the rainbow flag of the LGBTQ community.

The demonstrators blocked roads as they set off on a march through the heart of the city. "Saving Democracy!" said one placard held aloft by the crowd.

"I'm worried not about myself, but for my daughters and grandchildren," said Naama Mazor, 64, a retiree from the city of Herzliya.

"We want to keep Israel democratic and liberal, Jewish of course, but liberal. We are very concerned it is going to become a dictatorship," she told AFP.

"There isn't a half-democracy. We're either a democracy or a dictatorship. There is nothing in between."

Sagiv Golan, 46, from Tel Aviv, said the government was "trying to destroy civil rights, women's rights, LGBTQ rights and every thing that democracy stands for... We want to show the voice of democracy."

Israeli media reported demonstrations in more than 100 towns and cities, including Haifa, Jerusalem and Beersheba.

Compromise plan nixed

Since Netanyahu's government announced the reforms in January, days after taking office, massive demonstrations have regularly taken place across Israel.

Opponents of the package have accused Netanyahu, who is on trial on corruption charge he denies, of trying to use the reforms to quash possible judgements against him. The prime minister has rejected the accusation.

Expressing concern over the deepening rift in Israeli society, President Isaac Herzog presented a proposed compromise on Wednesday, but the government immediately rejected it.

"Anyone who thinks that a genuine civil war, with human lives, is a line that we could never reach, has no idea what he is talking about," Herzog said.

Leaders of opposition parties said in a joint news conference on Thursday they supported Herzog's outline.

"The offer is not perfect," said former premier Yair Lapid. "It is not what we wanted, but it is a fair compromise that allows us to live together."

The ruling coalition, which includes ultra-Orthodox Jewish and extreme-right parties, argues the proposed reforms are necessary to correct a power imbalance between elected representatives and Israel's top court.

Immediately after Herzog's announcement, Netanyahu called it a "unilateral compromise", the "key points" of which "only perpetuate the existing situation and do not bring the required balance between the powers".

The reforms would, among other things, allow lawmakers to scrap supreme court rulings with a simple majority vote.

Other proposals would give more weight to the government in the committee that selects judges and would deny the supreme court the right to strike down any amendments to so-called Basic Laws, Israel's quasi-constitution.

(AFP)

FLASHBACK

At least six killed in Peru clash with Shining Path


Issued on: 18/03/2023 - 

Members of the Peruvian Army in a central area known as the VRAE, where the military says six people died in a recent clash involving holdout members of the Shining Path guerrilla group © CRIS BOURONCLE / AFP/File


Lima (AFP) – At least six people were killed in a clash between remnants of the defunct Shining Path rebel group and a military patrol in a coca-growing valley in central Peru, a Defense Ministry unit reported Saturday.

The statement from the Joint Command of the Armed Forces did not give the date of the confrontation, in which it said that five members of the Sendero Luminoso, as the guerrilla group is known in Spanish, and an Army soldier died.

It said the clash took place in Vizcatan del Ene, in central Peru, as part of an operation that tried to capture Victor Quispe Palomino, alias Comrade Jose. He is the leader of holdout troops of the leftist rebels defeated militarily in the 1990s.

Quispe Palomino was not found, the statement said. One member of the Maoist group, known as "Paulino," "died when he was preparing to mine the combat area."

The Vizcatan del Ene area is in the central department of Junin, part of a large coca-growing area where remnants of the Shining Path allied to drug traffickers have long taken refuge, authorities said.

Coca leaves are the raw material from which cocaine is made.

Shining Path emerged in 1980 when it launched a "people's war" in what the government said was an act of "terrorism." Two decades of clashes with security forces left 69,000 people dead or disappeared, according to Peru's Truth and Reconciliation Commission.

Most of the guerrilla leaders are dead or imprisoned, but the military estimates that 200 to 350 ex-combatants are still active in an area known as the VRAE -- the Spanish-language acronym for the Apurimac and Ene River Valley, some 175 miles (280 kilometers) southeast of Lima.

© 2023 AFP

At least 13 dead after strong earthquake hits Ecuador and northern Peru

Magnitude 6.7 tremors shook area 50 miles south of Ecuador’s second city, Guayaquil, with one death reported so far in Peru

Associated Press

Sat 18 Mar 2023

A strong earthquake shook southern Ecuador and northern Peru on Saturday, killing at least 13 people, trapping others under rubble, and sending rescue teams out into streets littered with debris and fallen power lines.

The US Geological Survey reported an earthquake with a magnitude of 6.7 in the country’s coastal Guayas region. Its centre was about 50 miles (80 kilometres) south of Guayaquil, which has a metropolitan area of more than 3 million people.

The Ecuadorian president, Guillermo Lasso, in a televised address said the earthquake killed 12 people. In a tweet, he also asked people to remain calm.

The Peruvian prime minister, Alberto Otárola, said a four-year-old girl had died from head trauma she suffered in the collapse of her home in the Tumbes region, on the border with Ecuador.

Cristian Torres, head of the Risk Management Secretariat, Ecuador’s emergency response agency, said in a radio interview that 11 of the victims in the country died in the coastal state of El Oro and one in the highlands state of Azuay.

The victim in Azuay’s Andean community of Cuenca was a passenger in a vehicle crushed by rubble from a house, the agency said.

In the coastal province of El Oro, people were trapped under rubble, the agency reported. In the community of Machala, a two-storey home collapsed before people could be evacuated, a pier gave way and a building’s walls cracked, trapping an unknown number of people.

Machala resident Fabricio Cruz said he was in his third-floor apartment when he felt a strong tremor and saw his television hit the ground. He immediately headed out.

“I heard how my neighbours were shouting and there was a lot of noise,” said Cruz, a 34-year-old photographer. He added that when he looked around, he noticed the collapsed roofs of nearby houses.

The agency said firefighters worked to rescue people while the national police assessed damage, their work made more difficult by downed lines that interrupted telephone and electricity services.

In Guayaquil, about 170 miles south-west of the capital, Quito, authorities reported cracks on buildings and homes, as well as some collapsed walls. Authorities ordered the closure of three vehicle tunnels.

Videos shared on social media show people gathered on the streets of Guayaquil and nearby communities, and people reported objects falling inside their homes.

One video posted online showed three TV presenters darting from their studio desk as their set shook. They initially tried to dismiss the tremors as a minor quake but soon fled off camera. One anchor indicated the show would go to a commercial break, while another repeated: “My God, my God.”

A report from Ecuador’s adverse events monitoring directorate ruled out a tsunami threat.

The earthquake was also felt in Peru, from its northern border with Ecuador to the central Pacific coast. No deaths or injuries were immediately reported. In the northern region of Tumbes, the old walls of an army barracks collapsed, authorities said.

Ecuador is particularly prone to earthquakes. In 2016, a quake centred farther north on the Pacific Coast in a more sparsely populated area of the country killed more than 600 people.