FirstFT: Banks are struggling to reassure investors and regulators

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Happy Saint Patrick’s Day. Struggling banks on both sides of the Atlantic are unlikely to be in a festive mood as they continue to dominate the headlines.

In Europe, Credit Suisse shares closed 11 percent lower yesterday than Wednesday, despite a $54 billion lifeline from the Swiss central bank. Our detailed reading discusses the remaining lender options if deposits continue to be withdrawn.

In the US, the nation’s largest banks are set to pump $30 billion into the First Republic to prevent further chaos following the collapse of Silicon Valley Bank.

Here’s what I’m following today:

  • Economic data: The OECD publishes its interim forecast for the global economy, while the Bank of England and Ipsos publish the results of a survey on the attitude of the population to inflation in the UK. In the EU, there is a consumer price index for the last month.

  • Bank of Russia: The Central Bank holds a meeting to set the interest rate. Last month, he raised the key interest rate to five-year high 9.5 percent.

  • UK Policy: The Liberal Democrats open their spring conference in York.

Have a great weekend and thanks for reading FirstFT.

Today’s top news

1. The largest US banks are investing $30 billion in First Republic Bank. in an attempt to bolster their finances and contain the fallout from the collapse of Silicon Valley Bank. Here are the financial institutions involved in the deal.

  • “Three J”: US Treasury Secretary Janet Yellen, JPMorgan CEO Jamie Dimon and Federal Reserve Chairman Jay Powell put together a rescue deal on multiple calls.

2. Credit Suisse bonds remain in troubled territory even after the lender turned to the Swiss central bank for support and said it would buy back the CHF3bn ($3.2bn) debt. Learn more about why the losses went despite the rebound in stocks.

  • Type FT: Various banking problems on both sides of the Atlantic highlight the volatility of financial markets, where crises are crises of confidencewrites the Financial Times.

3. EXCLUSIVE: Carl Icahn urged the Fed to keep fighting the “disease” of inflation. ahead of next week’s rate-setting meeting, despite SVB and other bank failures. Read the rest of the FT Activist Investor Comments.

  • Opinion: SVB shows why we should worry about “cool” banks who forget the boring but important job of risk management, writes Anne-Sylvain Chassani.

4. UK lags competitors in attracting investment for electric vehicles, warns Bentley chief executive Adrian Hallmark, adding that other regions, especially the US with its green subsidies, offering more to support the green transition of the automotive sector.

5. Germany’s last-minute decision to block a ban on new internal combustion engines has excited others in Europe. likewise raise objections in an attempt to protect their industry. Here’s how failure threatens the EU’s ambitious climate agenda.

How well have you been following the news this week? Take our test.

Detailed news

Credit Suisse

© Francesca Volpi/Bloomberg

For investors, Credit Suisse’s loss-making business model, not its liquidity, is the fundamental problem – a worry that will be exacerbated if clients continue to withdraw assets. What will happen next? Options on the table ranges from the spin-off of its Swiss division to the dissolution of the bank.

We also read. . .

  • Twitter Mask: billionaire’s assistants turned the company around determining who to fire, refusing to pay suppliers, and reviewing invoices.

  • Retirement changes: That’s how you can make most of the tax changes This is reported in the budget of British Chancellor Jeremy Hunt.

  • Iran Policy: Former crown prince Reza Pahlavi, exiled son of the last Shah of Iran, acted as a proxy for those who think a regime change is close.

Graphics of the day

Investors sent over $120 billion in US money market funds over the past week, the highest weekly inflow since 2020 amid concerns about the safety of some bank deposits after the collapse of Silicon Valley Bank and Signature Bank.

2-Day Flow Bar Chart (billion dollars) showing cash flow into US money market funds.

Take a break from the news

It hasn’t been serviced for 86 years and its dial has been shamelessly scratched, but that probably won’t stop the Patek Philippe Ref 96 Quantième Lune moon phase watch from selling over $1 million when it later crosses the block at the Phillips auction house. this year. Yes, it is very rare, but no less important is who it belonged to..

Patek Philippe Ref 96 Emperor Aisin-Joro Puyi

Additional material by Gordon Smith and Emily Goldberg

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