FirstFT: Banks scramble to reassure investors and regulators

Completely happy St Patrick’s day. Struggling banks on each side of the Atlantic are unlikely to be in a festive temper as they proceed to dominate the headlines.

In Europe, Credit score Suisse shares closed yesterday 11 per cent beneath the place they began on Wednesday regardless of a $54bn lifeline from Switzerland’s central financial institution. Our in-depth learn discusses the lender’s remaining choices ought to deposits hold getting pulled.

Within the US, the nation’s largest banks are set to deposit $30bn into First Republic to forestall additional chaos after the collapse of Silicon Valley Financial institution.

Right here’s what I’m protecting tabs on at the moment:

• Financial knowledge: The OECD publishes its interim outlook on the worldwide financial system, whereas the Financial institution of England and Ipsos launch outcomes from a survey on public attitudes to UK inflation. The EU has its client value index for final month.

• Financial institution of Russia: The central financial institution holds its rate-setting assembly. Final month, it raised its key rate of interest to a five-year high of 9.5 per cent.

• UK politics: The Liberal Democrats open their spring convention in York.

Have a fantastic weekend, and thanks for studying FirstFT.

Right this moment’s high information

1. The biggest US banks are depositing $30bn into First Republic Financial institution in an try to bolster its funds and comprise the fallout from the collapse of Silicon Valley Financial institution. Here are the financial institutions involved in the deal.

• The ‘three Js’: US Treasury secretary Janet Yellen, JPMorgan chief Jamie Dimon and Federal Reserve chair Jay Powell pieced together the rescue deal over a number of calls.

2. Credit score Suisse’s bonds had been left firmly in distressed territory even after the lender turned to the Swiss central financial institution for assist and stated it could purchase again SFr3bn ($3.2bn) in debt. Read more on why the losses came despite a rebound in its shares.

• The FT View: Completely different banking woes on each side of the Atlantic underscore the febrility of monetary markets, the place crises are ones of confidence, writes the Monetary Occasions editorial board.

3. EXCLUSIVE: Carl Icahn has urged the Fed to maintain preventing the inflation “illness” forward of its rate-setting assembly subsequent week, regardless of SVB and different banking failures. Read the rest of the activist investor’s comments to the FT.

• Opinion: SVB reveals why we should always worry about “cool” banks that neglect the boring however vital job of threat administration, writes Anne-Sylvaine Chassany.

4. The UK is falling behind rivals in attracting funding for electrical autos, warns Bentley chief government Adrian Hallmark, including that different areas, significantly the US with its inexperienced subsidies, are offering more to support the car sector’s green transition.

5. Germany’s last-minute resolution to dam a ban on new combustion engines is triggering others in Europe to equally increase objections in a bid to defend their industries. Here’s how the pushback is threatening the EU’s ambitious climate agenda.

How effectively did you retain up with the information this week? Take our quiz.

Information in-depth

For buyers, it’s Credit score Suisse’s unprofitable enterprise mannequin relatively than its liquidity that’s the basic downside — a priority that will be exacerbated if shoppers continued to drag out property. What would come subsequent? The choices on the desk range from spinning off its Swiss unit to dissolving the bank.

We’re additionally studying . . . 

• Musk’s Twitter: The billionaire’s lieutenants have upended the company by figuring out who to fireside, refusing to pay distributors and renegotiating down payments.

• Pension modifications: Right here’s how one can make the most of the tax changes introduced in UK chancellor Jeremy Hunt’s Funds.

• Iran politics: Former crown prince Reza Pahlavi, the exiled son of Iran’s final shah, has emerged as a figurehead for individuals who suppose regime change is close to.

Graphic of the day

Buyers have funnelled more than $120bn to US money market funds over the previous week, the very best weekly influx since 2020, amid considerations over the protection of some financial institution deposits after the collapse of Silicon Valley Financial institution and Signature Financial institution.

Take a break from the information

It hasn’t been serviced in 86 years and its dial has been shamelessly scratched, however that most likely received’t stop this Patek Philippe Ref 96 Quantième Lune moonphase watch from fetching greater than $1mn when it crosses the block on the public sale home Phillips later this yr. Yes it’s ultra-rare, but equally significant is who it belonged to.

Further contributions by Gordon Smith and Emily Goldberg