USA

The Week in Business: A Banking Crisis


After the Federal Deposit Insurance Corporation stepped in last weekend to take over Silicon Valley Bank and Signature Bank, panic spread through the banking industry, prompting government interventions to prop up other struggling banking institutions. On Thursday, 11 of the nation’s largest banks combined resources to pump $30 billion into First Republic Bank, the 14th-largest U.S. bank, which found itself on the brink of collapse. The infusion was the result of a deal reached between Treasury Secretary Janet L. Yellen and Jamie Dimon, the chief executive of JPMorgan Chase, whose bank rescued several rivals during the 2008 financial crisis. echoes of 2008 in this banking crisis, the White House wishes to avoid comparisons. Despite sweeping actions by the Federal Reserve, Treasury, and FDIC to protect customer deposits and assets and bolster confidence in the nation’s banks, President Biden is loath to use the term “bailout.”

Meta announced last week that it would lay off another 10,000 employees, or 13% of its workforce, as it shrinks after a hiring boom that accelerated during the pandemic. The mass layoff is the second to upset Meta in recent months: in November the company laid off 11,000 workers across all departments and regions. Since then, Meta has announced that it is taking restructuring charges of $4.2 billion for the fourth quarter and expects additional restructuring costs of $1 billion in 2023 to accommodate its termination plans. certain office leases, revamping certain data center projects and paying severance payments for terminated employees. Similar efforts to cut costs are underway at Amazon, Alphabet, Microsoft and Salesforce as the tech industry’s boom times come to an end.

Data released on Tuesday showed annual inflation eased slightly, with the consumer price index climbing 6% on the year to February, from 6.4% in January. But more troubling signs lurk beneath the surface of the report: Core inflation, which stifles volatility in food and fuel prices, rose 0.5% from the previous month, beating analysts’ expectations. and resulting in the fastest monthly recovery since September. Federal Reserve officials have been waiting for the data to inform their decision on interest rate increases at their next meeting this week.

Shou Zi Chew, the chief executive of TikTok, will testify again before Congress on Thursday as the app faces increasing scrutiny from President Biden and other policymakers in Washington. Last week, TikTok said the Biden administration wanted its Chinese owner, ByteDance, to sell the app, threatening a ban in the United States if it couldn’t strike a deal. Central to the concerns of Washington lawmakers is fear that Beijing will request the data of the 100 million Americans who use the app. But a sale could be hard to pull off: TikTok’s price tag of $50 billion or more would be too high for all but a tech giant like Meta or Google — but those companies would likely want to avoid the antitrust battle that could arise trying to acquire the social media juggernaut.

As the Federal Reserve prepares to meet on Tuesday and Wednesday, central bankers face a more complicated math than they might have imagined a few weeks ago. There is new economic data, including employment and inflation reports, to factor into their decision to raise interest rates – or raise them at all. But officials are also eyeing the collapse of three banks that were caught off guard by the previous rate hike, which dramatically reduced the market value of their holdings. So while a relatively warm labor market and persistent inflation give Fed officials reason to continue on the path of aggressive rate hikes, turmoil in the banking sector has left analysts uncertain about the next move. from the Fed.

On Tuesday, attorneys for Dominion Voting Systems and Fox News will present their oral arguments for summary judgment in Dominion’s lawsuit accusing Fox of defaming it by portraying the company as a villain as the network amplified false claims about the presidential election of 2020. Dominion sought summary judgment, which is a process for deciding a case without going to trial. The company argued that Fox had provided no new evidence to support its campaign plots and that the news network had previously admitted it knew the on-air statements were false. His court filing includes numerous recently published private messages that Fox News anchors and other staffers exchanged, expressing skepticism about the narrative the network was promoting its shows.

Emmett Shear, the chief executive of live streaming site Twitch, said on Thursday he was stepping down after 16 years. A federal regulator last week approved a $31 billion rail merger, paving the way for the creation of a railroad linking Canada, the United States and Mexico. And CNN’s prime-time viewership has plummeted since the network revamped its 9 p.m. schedule.

nytimes

Not all news on the site expresses the point of view of the site, but we transmit this news automatically and translate it through programmatic technology on the site and not from a human editor.
Back to top button