The collision demonstrated how closely the U.S. and Russia are operating on the margins of a conflict zone, even as they aim to avoid incidents that could inflame tensions between them and widen the war in Ukraine. While the U.S. has provided Kyiv more than $30 billion in military aid and equipment, as well as intelligence, it has said it wanted to avoid conflict with Russia. Tuesday's incident demonstrated the challenges of supporting the war while, as the U.S. warned Tuesday, avoiding potential "unintended escalation."
GLOBAL NEWS
Fed to Consider Tougher Rules for Midsize Banks After SVB, Signature Failures
WASHINGTON-The Federal Reserve is rethinking a number of its own rules related to midsize banks following the collapse of two lenders, potentially extending restrictions that currently only apply to the biggest Wall Street firms.
A raft of tougher capital and liquidity requirements are under review, as well as steps to beef up annual "stress tests" that assess banks' ability to weather a hypothetical recession, according to a person familiar with the latest thinking among U.S. regulators.
February Retail Sales to Show if Consumers Pulled Back
A report on February retail sales will show whether Americans pulled back on spending after a strong start to the year, aided by unseasonably warm weather and a strong labor market.
U.S. consumers have shown surprising vigor in early 2023, after their spending weakened late last year. Retail sales, a measure of spending at stores, online and in restaurants, rose by a seasonally adjusted 3% in January, the Commerce Department said. That was the largest monthly gain in nearly two years and came after sales fell in November and December.
Where Investors Are Parking Their Cash Now
Rattled by a volatile stock market and the Federal Reserve's spate of interest-rate increases, more investors are hiding out in cash-alternative mutual funds and short-term bond exchange-traded funds.
Total inflows into money-market funds through mid-March were a net $96.8 billion, according to Refinitiv Lipper, the largest inflow over the first 2 1/2 months of a calendar year since 2008. Short-term U.S. Treasury bond funds saw their third-largest monthly inflows on record-$10 billion-in February.
IT Leaders Reassess Vendor Risks After Silicon Valley Bank Collapse
Corporate information technology leaders say they are reassessing vendor relationships and putting greater emphasis on risk management as they navigate the aftermath of the Silicon Valley Bank collapse.
"You can be proactive all you want, but the response to a crisis, the response to a disruption no one saw coming, is just as important," said Sineesh Keshav, chief technology officer and chief information officer at logistics real-estate company Prologis Inc. He and other executives spoke Tuesday at The Wall Street Journal's CIO Network Summit in Palo Alto, Calif.
Startup Fundraising Gets Harder After SVB Collapse
Many venture capitalists have all but paused investments in startups in the aftermath of Silicon Valley Bank's collapse, with players focused on managing the evolving situation even after regulators stepped in Sunday to guarantee all deposits of SVB.
Saxon Baum, a partner at Tampa, Fla.-based early-stage venture-capital firm Florida Funders, said that deal making has been essentially put on hold at his firm and others he has been in contact with as investors are still managing the fallout of Silicon Valley Bank's failure.
SVB Collapse Puts Pressure on Enterprise-Tech Pipeline
The abrupt collapse of Silicon Valley Bank is expected to put a damper on innovation in the enterprise-technology market-at least in the short term-with emerging software startups facing new fundraising challenges and higher-priced loans, corporate technology chiefs, investors and industry analysts say.
Beyond added financial pressures, they say, enterprise-tech developers-which make business software tools for companies-will also have to adjust to the sudden loss of the bank as a networking hub at the center of the startup ecosystem, which has helped foster the growth of countless go-to enterprise software products and services.
China's Economy Rebounds, Spurred by Consumption
SINGAPORE-Economic activity in China rebounded in January and February as the country emerged from almost three years of tough Covid-19 controls, adding to signs of resilience in the global economy after the sudden collapse of two U.S. banks unnerved investors.
The data suggest China's expected recovery is broadly on track after posting one of its weakest years for growth in decades in 2022. A pickup in retail sales suggests consumption is taking over as the engine of growth while factories contend with sinking exports and the real-estate sector shrinks, figures published Wednesday show.
China's Central Bank Keeps Key Policy Rates Unchanged
China's central bank kept its key policy rates unchanged on Wednesday, suggesting a hold on benchmark lending rates later this month.
The People's Bank of China injected 481 billion yuan ($70 billion) worth of liquidity into the banking system via its one-year medium-term lending facility at an interest rate of 2.75%. The MLF interest rate, which is used to price the nation's benchmark loan prime rate, was the same as the previous operation.
South Korea Pushes for $422B Investment in Key High-Tech Sectors by 2026
South Korean President Yoon Suk Yeol's administration has announced a new high-tech industry development initiative, seeking to funnel about $422 billion of private money into key sectors like semiconductors by 2026.
The initiative was announced at an economic policy meeting held in Seoul Wednesday with economic ministers and corporate executives. It calls for 550 trillion won, equivalent to nearly $422 billion, of investment in six high-tech sectors and the construction of new industrial complexes.
Investor Anxiety Hits a Fever Pitch After Silicon Valley Bank Collapse
Investors are scrambling to protect against the possibility of a protracted stock-market downturn.
The collapse of three banks in the past week has exacerbated a bout of recent volatility that has quickly crested through stock, bond and derivatives markets. Many traders are reaching for bets that would pay out if the haywire stretch for U.S. markets continues.
China and Russia Denounce U.S., Allies Over Submarine Deal
Moscow joined Beijing in criticizing as provocative and destabilizing a plan set this week to speed the sale of U.S. nuclear-powered submarines and technology to Australia, with both U.S. rivals expressing concern that the arrangement risks further proliferation of weapons.
President Biden hosted Australian Prime Minister Anthony Albanese and British Prime Minister Rishi Sunak on Monday in San Diego as they moved ahead with the submarine plans within their existing alliance and a grouping known as Aukus.
Biden to Tout Economic Message in Campaign Battleground State of Nevada
LAS VEGAS-President Biden is visiting the battleground state of Nevada to raise campaign cash and tout his economic message, as the state's Democratic Party completes a tumultuous leadership change that saw the ouster of a divisive liberal as party chair.
Fast-growing Nevada and its six electoral votes could be key in a tight presidential election. The state has voted for a Democrat in the past four election cycles for president. Margins have been tight, however, and Republicans see opportunity heading into next year's contest. The state will be one of the first on the 2024 primary calendar for both parties, though Mr. Biden appears unlikely to face a serious challenge from a fellow Democrat in his expected re-election campaign.
Chinese Doctor Who Sounded the Alarm on SARS Dies
Jiang Yanyong, a military surgeon who sounded the alarm on Chinese authorities' efforts to cover up the extent of a 2003 outbreak of severe acute respiratory syndrome, or SARS, died over the weekend at age 91, according to people close to Dr. Jiang and his family.
Unlike Li Wenliang, a Wuhan doctor who was initially punished for circulating an early warning about the spread of Covid-19 before his death from the disease in 2020, Dr. Jiang wasn't penalized for drawing attention to the impact of SARS in 2003. Both doctors were eventually hailed as folk heroes in state media.
Lawmakers Split on Tighter Rules After Silicon Valley Bank Failure
WASHINGTON-Republican and Democratic lawmakers largely agree that bank regulators were right to step in over the weekend to stop the failure of Silicon Valley Bank from becoming a contagion. They also think bank examiners and the company's management have many questions to answer.
But they disagree on many other fronts. Democrats want to look at tightening regulations on midsize banks they say are too loose, while Republicans are pointing the finger at Democratic spending as a root cause of the bank's weakness. Differences emerged within each party as well. These disagreements mean that any legislation to get ahead of potential future bank problems faces an uphill fight.
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This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
03-15-23 0701ET
