In the wake of Silicon Valley Bank’s collapse, turmoil has gripped Europe’s banking sector. After Credit Suisse shares plunged more than 30 per cent yesterday, Switzerland’s central bank stepped in with a $54bn lifeline.
Meanwhile, regulators are pointing fingers over SVB’s implosion, with European officials privately blaming American “incompetence” for the bank’s failure. In the US, Republican and Democratic lawmakers are squabbling over future financial legislation ahead of Treasury secretary Janet Yellen’s expected testimony in the Senate today on regulators’ interventions at SVB and Signature Bank.
Here’s what else to keep tabs on today:
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Interest rates: The European Central Bank is expected to raise its deposit rate by half a percentage point to 3 per cent.
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Economic data: The US has weekly unemployment claims.
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Results: Struggling UK retail group John Lewis, which just appointed its first chief executive, reports. Deliveroo and Savills also have results. Get the full list in our Week Ahead newsletter.
By the way, if you’re looking for a refresher on the UK Budget, read yesterday’s special issue of our Disrupted Times newsletter for a breakdown and get the highlights from our quick guide. Thank you for reading FirstFT.
Today’s top news
1. Credit Suisse plans to borrow up to SFr50bn ($54bn) from the Swiss central bank and buy back about SFr3bn of its debt, in an attempt to boost its liquidity and calm investors after its shares fells as much as 30 per cent.
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Opinion: European banks have built resilience, but faultlines can show up in unpredictable ways, writes Frontline Analysts managing director Daniel Davies.
2. Europe’s regulators are furious at the US handling of Silicon Valley Bank, privately accusing American authorities of tearing up a global rule book for failed banks that they had helped to write. Here’s why European officials are seething about their counterparts’ “incompetence”.
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Political division: SVB’s collapse has sparked debate over US banking reform as lawmakers from both parties trade blame and squabble over future laws.
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SVB’s culture: Insiders say the collapsed lender was a “very different type of bank” that more closely resembled the start-ups it served than Wall Street.
3. EXCLUSIVE: British American Tobacco is under pressure to move its primary listing to New York after top-five shareholder Rajiv Jain said it “makes no sense” to remain in London. The Financial Times speaks to the GQG Partners founder.
4. EXCLUSIVE: Brussels is expected to impose curbs on imports of Chinese green technologies today, demoting bidders for public contracts and making it harder for buyers to access subsidies. Read more details on the measures in the EU’s Net Zero Industry Act.
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Related: The US has threatened to ban TikTok if its Chinese owners do not sell their stake to address growing national security concerns.
5. UK chancellor Jeremy Hunt delivered a defiantly upbeat Budget that offered a £9bn tax break for business, an extension of free childcare and a surprise pension boost for the well-off yesterday. Read the full story here.
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The FT View: The chancellor’s announcements are a step in the right direction for UK growth, but there is a long way to go, writes the editorial board.
The Big Read
Ahead of the UN COP28 climate summit this year, the consensus over limiting a global rise in temperatures to 1.5C is crumbling as the target looks increasingly unachievable. Some are calling for far more drastic action to get back on track, while fossil fuel companies want to scrap it, worried about limits on the expansion of their industry.
We’re also reading . . .
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‘I need to make money’: Former US congressman Barney Frank, an architect of post-2008 financial rules, defends his decision to join Signature Bank’s board.
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Report card: Bank of England governor Andrew Bailey’s first three years have been a bumpy ride of crisis management and dealing with inflation.
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Israel-Palestine: Demolitions of Palestinian homes in East Jerusalem have risen sharply under Israel’s hardline government, threatening to further inflame tensions.
Chart of the day
Luck has given chancellor Jeremy Hunt some room for manoeuvre and the UK Budget, while not transformative, contains sensible ideas, writes Martin Wolf. But severe structural weaknesses persist in the British economy and his measures do too little to remove them.
Take a break from the news
How does the Boeing 787 Dreamliner compare with the Boeing 747, the double-decker “Queen of the Skies”? As the last of the 747s enters service, Mark Vanhoenacker shares a pilot’s perspective on how flying has evolved.
Additional contributions by Gordon Smith and Emily Goldberg
This post was originally published on Financial Times
