Bloomberg - Evening Briefing - First Republic’s turn

Another day, another bank. Yesterday Credit Suisse was in the hot seat. But thanks to the Swiss government, the troubled lender has a new lease on life. Today, eyes turned back to the US, where in the span of a week three regional banks (Silvergate, Silicon Valley, Signature) went down for the count. A fourth midsize lender, First Republic, was looking like it might join them, its shares having plummeted in the aftermath of SVB’s implosion. Last night, Bloomberg broke news that First Republic was even exploring a possible sale. But on Thursday, Wall Street rode to First Republic’s rescue as the biggest US banks deposited $30 billion to tide it over. Among them, JPMorgan, Bank of America, Citigroup and Wells Fargo will each contribute $5 billion, while Goldman Sachs and Morgan Stanley will kick in $2.5 billion. “This show of support by a group of large banks is most welcome, and demonstrates the resilience of the banking system,” said US Treasury Secretary Janet Yellen, Federal Reserve Chair Jerome Powell and other government officials in a statement hailing the deal. One analyst proclaimed, that with the rescue of First Republic, “the banking crisis is over.” —David E. Rovella

But then again, maybe not. Banks borrowed heavily over the last week from two Fed backstop facilities. Data published by the central bank showed $152.85 billion in borrowing from the discount window—the traditional liquidity backstop for banks—in the week ended March 15. It was a record high and a staggering increase from the $4.58 billion borrowed the previous week. The prior all-time high? It was $111 billion during the 2008 financial crisis.

Meanwhile in Switzerland, Credit Suisse closed Thursday with a lifesaving $54 billion credit line from the Swiss National Bank. But on Friday, the lender awoke to rumblings of an arranged marriage with UBS. The Swiss government and lenders have been running through a range of scenarios beyond the liquidity backstop, including a breakup, while some on Wall Street see a takeover as the only way it all ends. Both banks see a takeover as a last resort. And for those who like charts, here are some showing just how Credit Suisse got here in the first place.

US stocks ended the day higher after First Republic’s rescue package was secured, sparking a rebound in shares of embattled regional lenders. Treasuries fell after the European Central Bank delivered a rate hike that added to bets the US central bank will also raise rates next week, despite the banking crisis. Here’s your markets wrap.

The Pentagon released its video of Russian planes harassing and eventually damaging a US military drone that subsequently crashed into the Black Sea. Poland said it will be the first to provide fighter jets to Ukraine, sending four Soviet-era fighters in the coming days. The Polish government said this week that several allies had also signaled readiness to send such aircraft, with Slovakia on Wednesday saying it was prepared to dispatch MiGs.

A Russian Su-27 fighter jet approaches a US Air Force MQ-9 drone over the Black Sea on March 14.  Source: US Air Force

China’s Communist Party unveiled its biggest revamp in years, placing the nation’s finance and technology sectors at the heart of its control as part of Xi Jinping’s drive to tighten his grip on the party.

President Emmanuel Macron will bypass parliament to push through his unpopular pension reform, raising the French retirement age to 64 as part of a plan to make the economy more competitive. The pension bill was debated in parliament for six weeks before it became clear Macron couldn’t muster enough votes, leading the government to invoke a constitutional provision that allows adoption without a vote. Opposition lawmakers immediately called for a vote of no-confidence.

Demonstrators at a protest against pension reform in Paris on Thursday Photographer: Benjamin Girette/Bloomberg

Bed Bath & Beyond isn’t paying severance to employees at stores across the US that it recently said it will close, a potentially negative indicator as the retailer tries to stabilize its floundering business. 

Bloomberg continues to track the global coronavirus pandemic. Click here for daily updates.

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Singapore’s Changi has regained its title as the world’s best airport after losing it to Qatar for two years running. The Asian hub edged Doha’s Hamad International Airport into second place, with Tokyo’s Haneda Airport bagging third in the Skytrax World Airport Awards 2023. The US was conspicuous by its absence in the top 10 (JFK fell to 88th).

Changi Airport  Photographer: Bloomberg

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