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Tag: Financial stability

  • This Valentine’s Day, Americans choose financial stability over romance

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    With Valentine’s Day on Saturday, a new survey shows that more Americans are looking for financial stability in a partner than for romance.

    The survey, from Ramsey Solutions’ Q4 State of Personal Finance, found 63% of respondents said they’d prefer a partner who is financially secure but not very exciting over one who is romantic but bad with money.

    56% also said they never had a serious conversation about money with their partner before getting married.

    The numbers come as so many Coloradans continue to worry about finances.

    Around 75,000 Coloradans lost their health coverage when Affordable Care Act subsidies expired at the start of 2026, and hundreds of thousands more saw their premiums skyrocket.
    Interest rates are higher than many would like.

    And the latest inflation data from the Bureau of Labor Statistics shows prices rose 0.3% in December and 2.7% over the last year—the Bureau’s new January numbers will be released on Friday, 2/13.

    “It isn’t really wanting to be with someone who has a lot of money, but wanting to be with someone stable and financially secure,” said University of Denver psychology research professor Galena Rhoades. “That’s a reflection of values: drive, motivation, but also that need for stability and security, especially in a time when things feel uncertain.”

    Denver7 asked Rhoades if that means values can change over time depending on what’s happening nationally. She said “yes.”

    “I think our values are malleable in many ways,” Rhoades added. “Maybe not our core values, but how we value different values and prioritize different values, especially with respect to what’s going on in our country.”

    She pointed to 2016 as another example. After President Donald Trump was elected in his first term, Rhoades says more people paid attention to a prospective partner’s political leanings as a prerequisite.

    “One of the things that we’re missing is actually the opportunity to observe someone in real life from a little bit of a distance,” Rhoades said. “So, if you meet someone at school, at work, through friends, you often get this opportunity to see them for some time before you fall in love with them, before you go on a first date, and and I think that’s missing in dating today, sort of the opportunity to observe someone and learn from how you see them in the real world.”

    Rhoades emphasized that the increase in financial stability doesn’t mean people no longer value romanticism.

    “I actually would bet that that doesn’t mean that people are valuing romance, love, and connection any less,” she said. “I think we’re seeing that that is elevated, that people want a partner who’s secure and stable, but not that we see a decrease in romance or love as part of that.

    Denver7 | Your Voice: Get in touch with Dan Grossman

    Denver7 morning anchor Dan Grossman shares stories that have an impact in all of Colorado’s communities, but specializes in covering consumer and economic issues. If you’d like to get in touch with Dan, fill out the form below to send him an email.

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    Dan Grossman

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  • EU capitals fear Russian retaliation and cyberattacks after asset freezes

    EU capitals fear Russian retaliation and cyberattacks after asset freezes

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    The EU’s unrelated effort to funnel cash to Ukraine from its central budget faced serious political resistance, prompting governments to look at alternative sources of money. It took weeks of diplomatic backchanneling before leaders convinced Hungary on Feb. 1 to lift its veto over the EU’s €50 billion cash pot for Ukraine.

    Financial stability

    The assets confiscation plan could generate over €200 billion to support Ukraine’s postwar reconstruction, according to backers of the proposal. G7 countries are aiming to come up with a coordinated roadmap amid growing pressure from the United States, which, along with the United Kingdom and Canada, has fewer qualms than EU countries such as Germany, France and Italy.

    In Europe, there are fears Moscow might retaliate by lodging a flurry of appeals against Euroclear, a Belgium-based financial depository that holds the vast majority of Russian reserves in Europe.

    “An institution like Euroclear is a very systemic financial institution,” Belgian Finance Minister Vincent Van Peteghem said | Nicolas Maeterlinck/Belga/AFP via Getty Images

    “An institution like Euroclear is a very systemic financial institution,” Belgian Finance Minister Vincent Van Peteghem told reporters at the end of January. “We should … try to avoid an impact [of Russian asset confiscation] on financial stability.”

    In a sign of the sort of retaliation countries fear might come, Russian entities have already filed 94 lawsuits in Russia demanding payback to Euroclear, which operates under Belgian law, after their investments and their profits in Europe were frozen, according to a Belgian official with knowledge of the proceedings.

    Top Russian lenders, including Rosbank, Sinara Bank and Rosselkhozbank, filed legal claims against Euroclear worth hundreds of millions of rubles.



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    Gregorio Sorgi

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  • Ryan Reynolds has transformed Wrexham. Who will save Britain’s other struggling towns?

    Ryan Reynolds has transformed Wrexham. Who will save Britain’s other struggling towns?

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    WREXHAM, Wales — Sitting in the Royal Oak, a narrow but implausibly long pub in Wrexham’s town center, Gary Tipping is reflecting on the rollercoaster fortunes of his favorite football team.

    Wrexham Association Football Club (A.F.C.) — a lower-league team barely recognizable since it was bought up by Hollywood stars Ryan Reynolds and Rob McElhenney in 2021 — has just lost its opening game of the season. But little can dampen the enthusiasm of Tipping or his fellow fans.

    “What they’ve done for this town, it’s beyond what I could have ever dreamed of,” he says.

    “People want to see the town and breathe in the atmosphere here,” adds his 21-year-old son Sam, who’s been going to the football with Gary since he was 5 years old. “There’s a hype around the place.”

    “Hype” was not a word formerly associated with Wrexham. The third-oldest professional football club in the world, it had fallen on hard times and was struggling to stay afloat in the 2010s. But everything changed when Reynolds and McElhenney arrived, in search of a project and with movie-star money to spend.

    Wrexham’s fortunes were transformed by new players and a new manager, financed by American dollars. The fans flooded back. A Netflix documentary series charting their progress, “Welcome to Wrexham,” was a smash hit on both sides of the Atlantic. In May, the rejuvenated team was promoted back into the professional football league after a 15-year absence.

    The town, too, feels like a different place.

    Strolling through a lively Wrexham high street on a Saturday night, local call center worker Christopher Lamb points out a raft of new bars that have opened over the past two years.

    “The town was going downhill for quite a while since 2010. But it’s changed a lot. Now you get a lot of American tourists here — though they don’t always go to the places that need the money,” Lamb says. 

    But not every ailing football club — nor every ailing town — finds a superhero.

    Football in the English leagues — where Wrexham play, despite the town’s north Wales location — is a wildly unequal game. The hundreds of millions of pounds powering top-level Premier League clubs contrast sharply with the tiny budgets of lower-league teams, most of whom struggle just to stay afloat.

    Wrexham faced the same endless financial battles before its unlikely takeover, with financial distress leaving the team at its lowest sporting ebb. Other clubs under constant threat of extinction look on in envy, and with a lingering sense of injustice.

    Wrexham’s fortunes were transformed by new players and a new manager, financed by American dollars | Malcolm Couzens/Getty Images

    Knights in shining armor?

    “You’ve got wonderful things like Wrexham — that’s a dream isn’t it?” says Jenny Chapman, formerly the MP for the northeast town of Darlington, and now a Labour member of the House of Lords. “We were hoping for that knight in shining armor.” 

    First elected to parliament in 2010, Chapman was thrust straight into a local nightmare: the imminent collapse of her town’s beloved football club.

    Darlington F.C. had been placed into emergency financial proceedings multiple times through the 2000s, having gambled unwisely on an outsized new stadium on the outskirts of the town. That purchase had been covered in part by a £4 million loan taken out by the club’s former owner, George Reynolds — who arrived with ambitions of taking the club to the Premier League, but ended up in prison for tax avoidance.

    “It was a very difficult period and it was overwhelming,” Chapman recalls.

    “I’m not a football fan at all, never pretended to be. But I felt very strongly that Darlington was a club with a real heritage to it and it was an important part of the community that needed to be supported and should survive,” she adds.

    As the club desperately looked for a buyer to save it from liquidation, Chapman spent hours each day on the phone with the club’s administrator, and tried to vet and cajole prospective buyers. 

    It was to no avail. Darlington was eventually expelled from the Football Association in 2012. A phoenix club — owned by fans — was formed in its place, and is currently attempting to rise from the very bottom of the English football pyramid.

    “There definitely wasn’t any support from Westminster,” Chapman recalls.

    But a decade on, there are signs Westminster is starting to pay attention. A similar collapse in 2019 at Bury F.C. — another lower-league cub in the north of England — grabbed headlines far beyond the Greater Manchester area, and happened just as the politics around football were starting to shift.

    The constituencies containing Wrexham, Bury and Darlington all flipped from Labour to the Conservatives in 2019. All could be characterized as the kind of “Red Wall” seats that the Tories had promised under Boris Johnson to “level up” and regenerate after years of post-industrial decline.

    Football is of particular importance in these seats. Research by the center-right Onward think tank earlier this year showed that people in the north of England “are more likely to view their local football team as one of the main sources of pride in the local area.”

    “You’ve got to think about the institutions that are fundamental and core to these places,” says Tory MP John Stevenson, chair of the Northern Research Group, a backbench Conservative caucus focused on supporting northern England.

    Bury F.C. was expelled from the English Football League in 2019, after failing in its bid to find a buyer | WPA pool photo by Danny Lawson/Getty Images

    “I always come up with two: one is universities and the second one is football clubs. As a social enterprise, an economic enterprise and a sporting one, football clubs are very much at the forefront of their communities.” 

    Dead and Bury’d

    Bury was expelled from the English Football League in 2019, after the cash-strapped club failed in its bid to find a buyer. Onward’s research shows that northern clubs — like Bury and Darlington — have been particularly exposed to financial stress, often by unscrupulous owners who stretched them far beyond their means.

    In response to Bury’s expulsion, Conservative MP and former Sports Minister Tracey Crouch was commissioned by Johnson’s government to carry out a fan-led review into the governance of English football clubs. The review, published in November 2021, recommended a new, independent regulator for English football and the introduction of tests to better police club ownership.

    The government accepted Crouch’s call to establish a regulator in a white paper — a draft legislative document — responding to her review. But there’s no sign yet of any legislation to formally enact her recommendations, prompting angry claims of foot-dragging.

    “The fan-led review went a long way … but it seems incredibly slow. It’s taken two years just for a white paper to come forward,” says Christian Wakeford, the MP for Bury North — who switched from the Conservatives to Labour last year.

    “There are so many clubs that are on that threshold of not existing anymore — we don’t want anymore Burys. It’s not fair for the fans and it’s not fair for a town,” he adds.

    Tory MP and NRG Chair Stevenson adds: “I’m of the belief that governments of all persuasions neglected [and] ignored northern communities. It’s not just about economies, it’s also about communities. And football clubs are very much part of that.”

    A government official pointed POLITICO to a speech made by Sports Minister Stuart Andrew in June to the English Football League’s annual conference, in which he acknowledged that there are “a number of clubs across the EFL that are in real distress today.” Andrew said the government intends to publish its response to a consultation on the white paper “in the coming weeks.”

    While some MPs eagerly await the government’s next move, not everyone is convinced it’s the state’s place to try to save clubs from the vagaries of the market — particularly given that the country’s top flight appears to be in rude health.

    Tory peer and West Ham United Vice Chairman Karren Brady said last year that “much of [the fan-led review] should be welcomed like a giant hole in Wembley’s pitch.”

    “It is messing with an industry which works better than most, and it’s hard to see what football has in common with banks or other financial institutions who also have regulators,” she wrote in the Sun newspaper. “We have to remember the Premier League is the envy of world sport, so why break it because Bury went bust?”

    This is Wrexham

    Back in Wrexham, the signs of what forward-thinking — and extremely wealthy — owners can do are on full display. It’s little surprise that MPs keen for their own local success story are eyeing the club with envy.

    Wrexham may have lost its opening game of the season, but little can dampen the enthusiasm of its fans | Malcolm Couzens/Getty Images

    “All of a sudden, everyone knows who Wrexham is — it’s had a massive effect,” says Geraint Andrews, a local engineer standing outside another thriving town center bar.

    Indeed, the whole town center is awash with Wrexham A.F.C. replica shirts and memorabilia dedicated to the club and the “This Is Wrexham” documentary series. A Wrexham A.F.C. mural adorns the glass of the town’s branch of McDonald’s. U.S. flags held by tourists or fans who have taken the Hollywood stars to heart are only narrowly outnumbered by Welsh national flags. 

    Since the takeover in 2021, the town of Wrexham has even been officially upgraded to a city. Amid the takeover buzz, it was also shortlisted for the U.K. City of Culture title last year.

    For fans of other small-town clubs, like Bury and Darlington — not to mention the currently struggling Derby County — just some stability would do.

    “Not everybody can win the league,” Stevenson of the Northern Research Group notes.

    “But through the good times and the difficult times, you want clubs to have financial stability and good management. That’s what we’re asking for.”

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    Andrew McDonald

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  • What Fatigue Really Means

    What Fatigue Really Means

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    Alexis Misko’s health has improved enough that, once a month, she can leave her house for a few hours. First, she needs to build up her energy by lying in a dark room for the better part of two days, doing little more than listening to audiobooks. Then she needs a driver, a quiet destination where she can lie down, and days of rest to recover afterward. The brief outdoor joy “never quite feels like enough,” she told me, but it’s so much more than what she managed in her first year of long COVID, when she couldn’t sit upright for more than an hour or stand for more than 10 minutes. Now, at least, she can watch TV on the same day she takes a shower.

    In her previous life, she pulled all-nighters in graduate school and rough shifts at her hospital as an occupational therapist; she went for long runs and sagged after long flights. None of that compares with what she has endured since getting COVID-19 almost three years ago. The fatigue she now feels is “like a complete depletion of the essence of who you are, of your life force,” she told me in an email.

    Fatigue is among the most common and most disabling of long COVID’s symptoms, and a signature of similar chronic illnesses such as myalgic encephalomyelitis (also known as chronic fatigue syndrome or ME/CFS). But in these diseases, fatigue is so distinct from everyday weariness that most of the people I have talked with were unprepared for how severe, multifaceted, and persistent it can be.

    For a start, this fatigue isn’t really a single symptom; it has many faces. It can weigh the body down: Lisa Geiszler likens it to “wearing a lead exoskeleton on a planet with extremely high gravity, while being riddled with severe arthritis.” It can rev the body up: Many fatigued people feel “wired and tired,” paradoxically in fight-or-flight mode despite being utterly depleted. It can be cognitive: Thoughts become sluggish, incoherent, and sometimes painful—like “there’s steel wool stuck in my frontal lobe,” Gwynn Dujardin, a literary historian with ME, told me.

    Fatigue turns the most mundane of tasks into an “agonizing cost-benefit analysis,” Misko said. If you do laundry, how long will you need to rest to later make a meal? If you drink water, will you be able to reach the toilet? Only a quarter of long-haulers have symptoms that severely limit their daily activities, but even those with “moderate” cases are profoundly limited. Julia Moore Vogel, a program director at Scripps Research, still works, but washing her hair, she told me, leaves her as exhausted as the long-distance runs she used to do.

    And though normal fatigue is temporary and amenable to agency—even after a marathon, you can will yourself into a shower, and you’ll feel better after sleeping—rest often fails to cure the fatigue of long COVID or ME/CFS. “I wake up fatigued,” Letícia Soares, who has long COVID, told me.

    Between long COVID, ME/CFS, and other energy-limiting chronic illnesses, millions of people in the U.S. alone experience debilitating fatigue. But American society tends to equate inactivity with immorality, and productivity with worth. Faced with a condition that simply doesn’t allow people to move—even one whose deficits can be measured and explained—many doctors and loved ones default to disbelief. When Soares tells others about her illness, they usually say, “Oh yeah, I’m tired too.” When she was bedbound for days, people told her, “I need a weekend like that.” Soares’s problems are very real, and although researchers have started to figure out why so many people like her are suffering, they don’t yet know how to stop it.


    Fatigue creates a background hum of disability, but it can be punctuated by worse percussive episodes that strip long-haulers of even the small amounts of energy they normally have.

    Daria Oller is a physiotherapist and athletic trainer, so when she got COVID in March 2020, she naturally tried exercising her way to better health. And she couldn’t understand why, after just short runs, her fatigue, brain fog, chest pain, and other symptoms would flare up dramatically—to the point where she could barely move or speak. These crashes contradicted everything she had learned during her training. Only after talking with physiotherapists with ME/CFS did she realize that this phenomenon has a name: post-exertional malaise.

    Post-exertional malaise, or PEM, is the defining trait of ME/CFS and a common feature of long COVID. It is often portrayed as an extreme form of fatigue, but it is more correctly understood as a physiological state in which all existing symptoms burn more fiercely and new ones ignite. Beyond fatigue, people who get PEM might also feel intense radiant pain, an inflammatory burning feeling, or gastrointestinal and cognitive problems: “You feel poisoned, flu-ish, concussed,” Misko said. And where fatigue usually sets in right after exertion, PEM might strike hours or days later, and with disproportionate ferocity. Even gentle physical or mental effort might lay people out for days, weeks, months. Visiting a doctor can precipitate a crash, and so can filling out applications for disability benefits—or sensing bright lights and loud sounds, regulating body temperature on hot days, or coping with stress. And if in fatigue your batteries feel drained, in PEM they’re missing entirely. It’s the annihilation of possibility: Most people experience the desperation of being unable to move only in nightmares, Dujardin told me. “PEM is like that, but much more painful.”

    Medical professionals generally don’t learn about PEM during their training. Many people doubt its existence because it is so unlike anything that healthy people endure. Mary Dimmock told me that she understood what it meant only when she saw her son, Matthew, who has ME/CFS, crash in front of her eyes. “He just melted,” Dimmock said. But most people never see such damage because PEM hides those in the midst of it from public view. And because it usually occurs after a delay, people who experience PEM might appear well to friends and colleagues who then don’t witness the exorbitant price they later pay.

    That price is both real and measurable. In cardiopulmonary exercise tests, or CPETs, patients use treadmills or exercise bikes while doctors record their oxygen consumption, blood pressure, and heart rate. Betsy Keller, an exercise physiologist at Ithaca College, told me that most people can repeat their performance if retested one day later, even if they have heart disease or are deconditioned by inactivity. People who get PEM cannot. Their results are so different the second time around that when Keller first tested someone with ME/CFS in 2003, “I told my colleagues that our equipment was out of calibration,” she said. But she and others have seen the same pattern in hundreds of ME/CFS and long-COVID patients—“objective findings that can’t be explained by anything psychological,” David Systrom, a pulmonologist at Brigham and Women’s Hospital, told me. “Many patients are told it’s all in their head, but this belies that in spades.” Still, many insurers refuse to pay for a second test, and many patients cannot do two CPETs (or even one) without seriously risking their health. And “20 years later, I still have physicians who refute and ignore the objective data,” Keller said. (Some long-COVID studies have ignored PEM entirely, or bundled it together with fatigue.)

    Oller thinks this dismissal arises because PEM inverts the dogma that exercise is good for you—an adage that, for most other illnesses, is correct. “It’s not easy to change what you’ve been doing your whole career, even when I tell someone that they might be harming their patients,” she said. Indeed, many long-haulers get worse because they don’t get enough rest in their first weeks of illness, or try to exercise through their symptoms on doctors’ orders.

    People with PEM are also frequently misdiagnosed. They’re told that they’re deconditioned from being too sedentary, when their inactivity is the result of frequent crashes, not the cause. They’re told that they’re depressed and unmotivated, when they are usually desperate to move and either physically incapable of doing so or using restraint to avoid crashing. Oller is part of a support group of 1,500 endurance athletes with long COVID who are well used to running, swimming, and biking through pain and tiredness. “Why would we all just stop?” she asked.


    Some patients with energy-limiting illnesses argue that the names of their diseases and symptoms make them easier to discredit. Fatigue invites people to minimize severe depletion as everyday tiredness. Chronic fatigue syndrome collapses a wide-ranging disabling condition into a single symptom that is easy to trivialize. These complaints are valid, but the problem runs deeper than any name.

    Dujardin, the English professor who is (very slowly) writing a cultural history of fatigue, thinks that our concept of it has been impoverished by centuries of reductionism. As the study of medicine slowly fractured into anatomical specialties, it lost an overarching sense of the systems that contribute to human energy, or its absence. The concept of energy was (and still is) central to animistic philosophies, and though once core to the Western world, too, it is now culturally associated with quackery and pseudoscience. “There are vials of ‘energy boosters’ by every cash register in the U.S.,” Dujardin said, but when the NIH convened a conference on the biology of fatigue in 2021, “specialists kept observing that no standard definition exists for fatigue, and everyone was working from different ideas of human energy.” These terms have become so unhelpfully unspecific that our concept of “fatigue” can encompass a wide array of states including PEM and idleness, and can be heavily influenced by social forces—in particular the desire to exploit the energy of others.

    As the historian Emily K. Abel notes in Sick and Tired: An Intimate History of Fatigue, many studies of everyday fatigue at the turn of the 20th century focused on the weariness of manual laborers, and were done to find ways to make those workers more productive. During this period, fatigue was recast from a physiological limit that employers must work around into a psychological failure that individuals must work against. “Present-day society stigmatizes those who don’t Push through; keep at it; show grit,” Dujardin said, and for the sin of subverting those norms, long-haulers “are not just disbelieved but treated openly with contempt.” Fatigue is “profoundly anti-capitalistic,” Jaime Seltzer, the director of scientific and medical outreach at the advocacy group MEAction, told me.

    Energy-limiting illnesses also disproportionately affect women, who have long been portrayed as prone to idleness. Dujardin notes that in Western epics, women such as Circe and Dido were perceived harshly for averting questing heroes such as Odysseus and Aeneas with the temptation of rest. Later, the onset of industrialization turned women instead into emblems of homebound idleness while men labored in public. As shirking work became a moral failure, it also remained a feminine one.

    These attitudes were evident in the ways two successive U.S. presidents dealt with COVID. Donald Trump, who always evinced a caricature of masculine strength and chastised rivals for being “low energy,” framed his recovery from the coronavirus as an act of domination. Joe Biden was less bombastic, but he still conspicuously assured the public that he was working through his COVID infection while his administration prioritized policies that got people back to work. Neither man spoke of the possibility of disabling fatigue or the need for rest.

    Medicine, too, absorbs society’s stigmas around fatigue, even in selecting those who get to join its ranks. Its famously grueling training programs exclude (among others) most people with energy-limiting illnesses, while valorizing the ability to function when severely depleted. This, together with the tendency to psychologize women’s pain, helps to explain why so many long-haulers—even those with medical qualifications, like Misko and Oller—are treated so badly by the professionals they see for care. When Dujardin first sought medical help for her ME/CFS symptoms, the same doctor who had treated her well for a decade suddenly became stiff and suspicious, she told me, reduced all of her detailed descriptions to “tiredness,” and left the room without offering diagnosis or treatment. There is so much cultural pressure to never stop that many people can’t accept that their patients or peers might be biologically forced to do so.


    No grand unified theory explains everything about long COVID and ME/CFS, but neither are these diseases total mysteries. In fact, plenty of evidence exists for at least two pathways that explain why people with these conditions could be so limited in energy.

    First, most people with energy-limiting chronic illnesses have problems with their autonomic nervous system, which governs heartbeat, breathing, sleep, hormone release, and other bodily functions that we don’t consciously control. When this system is disrupted—a condition called “dysautonomia”—hormones such as adrenaline might be released at inappropriate moments, leading to the wired-but-tired feeling. People might suddenly feel sleepy, as if they’re shutting down. Blood vessels might not expand in moments of need, depriving active muscles and organs of oxygen and fuel; those organs might include the brain, leading to cognitive dysfunction such as brain fog.

    Second, many people with long COVID and ME/CFS have problems with generating energy. When viruses invade the body, the immune system counterattacks, triggering a state of inflammation. Both infection and inflammation can damage the mitochondria—the bean-shaped batteries that power our cells. Malfunctioning mitochondria produce violent chemicals called “reactive oxygen species” (ROS) that inflict even more cellular damage. Inflammation also triggers a metabolic switch toward fast but inefficient ways of making energy, depleting cells of fuel and riddling them with lactic acid. These changes collectively explain the pervasive, dead-battery flavor of fatigue, as “the body struggles to generate energy,” Bindu Paul, a pharmacologist and neuroscientist at Johns Hopkins, told me. They might also explain the burning, poisoned feelings that patients experience, as their cells fill with lactic acid and ROS.

    These two pathways—autonomic and metabolic—might also account for PEM. Normally, the autonomic nervous system smoothly dials up to an intense fight-and-flight mode and down to a calmer rest-and-digest one. But “in dysautonomia, the dial becomes a switch,” David Putrino, a neuroscientist and rehabilitation specialist at Mount Sinai, told me. “You go from sitting to standing and your body thinks: Oh, are we going hunting? You stop, and your body shuts down.” The exhaustion of these dramatic, unstable flip-flops is made worse by the ongoing metabolic maelstrom. Damaged mitochondria, destructive ROS, inefficient metabolism, and chronic inflammation all compound one another in a vicious cycle that, if it becomes sufficiently intense, could manifest as a PEM crash. “No one is absolutely certain about what causes PEM,” Seltzer told me, but it makes sense that “you have this big metabolic shift and your nervous system can’t get back on an even keel.” And if people push through, deepening the metabolic demands on a body that already can’t meet them, the cycle can spin even faster, “leading to progressive disability,” Putrino said.

    Other factors might also be at play. Compared with healthy people, those with long COVID and ME/CFS have differences in the size, structure, or function of brain regions including the thalamus, which relays motor signals and regulates consciousness, and the basal ganglia, which controls movement and has been implicated in fatigue. Long-haulers also have problems with blood vessels, red blood cells, and clotting, all of which might further staunch their flows of blood, oxygen, and nutrients. “I’ve tested so many of these people over the years, and we see over and over again that when the systems start to fail, they all fail in the same way,” Keller said. Together, these woes explain why long COVID and ME/CFS have such bewilderingly varied symptoms. That diversity fuels disbelief—how could one disease cause all of this?—but it’s exactly what you’d expect if things as fundamental as metabolism go awry.

    Long-haulers might not know the biochemical specifics of their symptoms, but they are uncannily good at capturing those underpinnings through metaphor. People experiencing autonomic blood-flow problems might complain about feeling “drained,” and that’s literally happening: In POTS, a form of dysautonomia, blood pools in the lower body when people stand. People experiencing metabolic problems often use dead-battery analogies, and indeed their cellular batteries—the mitochondria—are being damaged: “It really feels like something is going wrong at the cellular level,” Oller told me. Attentive doctors can find important clues about the basis of their patients’ illness hiding amid descriptions that are often billed as “exaggerated or melodramatic,” Dujardin said.


    Some COVID long-haulers do recover. But several studies have found that, so far, most don’t fully return to their previous baseline, and many who become severely ill stay that way. This pool of persistently sick people is now mired in the same neglect that has long plagued those who suffer from illnesses such as ME/CFS. Research into such conditions are grossly underfunded, so no cures exist. Very few doctors in the U.S. know how to treat these conditions, and many are nearing retirement, so patients struggle to find care. Long-COVID clinics exist but vary in quality: Some know nothing about other energy-limiting illnesses, and still prescribe potentially harmful and officially discouraged treatments such as exercise. Clinicians who better understand these illnesses know that caution is crucial. When Putrino works with long-haulers to recondition their autonomic nervous system, he always starts as gently as possible to avoid triggering PEM. Such work “isn’t easy and isn’t fast,” he said, and it usually means stabilizing people instead of curing them.

    Stability can be life-changing, especially when it involves changes that patients can keep up at home. Over-the-counter supplements such as coenzyme Q10, which is used by mitochondria to generate energy and is depleted in ME/CFS patients, can reduce fatigue. Anti-inflammatory medications such as low-dose naltrexone may have some promise. Sleep hygiene may not cure fatigue, but certainly makes it less debilitating. Dietary changes can help, but the right ones might be counterintuitive: High-fiber foods take more energy to digest, and some long-haulers get PEM episodes after eating meals that seem healthy. And the most important part of this portfolio is “pacing”—a strategy for carefully keeping your activity levels beneath the threshold that causes debilitating crashes.

    Pacing is more challenging than it sounds. Practitioners can’t rely on fixed routines; instead, they must learn to gauge their fluctuating energy levels in real time, while becoming acutely aware of their PEM triggers. Some turn to wearable technology such as heart-rate monitors, and more than 30,000 are testing a patient-designed app called Visible to help spot patterns in their illness. Such data are useful, but the difference between rest and PEM might be just 10 or 20 extra heartbeats a minute—a narrow crevice into which long-haulers must squeeze their life. Doing so can be frustrating, because pacing isn’t a recovery tactic; it’s mostly a way of not getting worse, which makes its value harder to appreciate. Its physical benefits come at mental costs: Walks, workouts, socializing, and “all the things I’d do for mental health before were huge energy sinks,” Vogel told me. And without financial stability or social support, many long-haulers must work, parent, and care for themselves even knowing that they’ll suffer later. “It’s impossible not to overdo it, because life is life,” Vogel said.

    “Our society is not set up for pacing,” Oller added. Long-haulers must resist the enormous cultural pressure to prove their worth by pushing as hard as they can. They must tolerate being chastised for trying to avert a crash, and being disbelieved if they fail. “One of the most insulting things people can say is ‘Fight your illness,’” Misko said. That would be much easier for her. “It takes so much self-control and strength to do less, to be less, to shrink your life down to one or two small things from which you try to extract joy in order to survive.” For her and many others, rest has become both a medical necessity and a radical act of defiance—one that, in itself, is exhausting.

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    Ed Yong

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  • UN chief backs reform of Security Council, global financial system

    UN chief backs reform of Security Council, global financial system

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    United Nations Secretary-General António Guterres backed the reform of the U.N. Security Council and the international financial system to align them with the “realities of today’s world.”

    Both the U.N. body and the financial architecture reflect the power relations of 1945 and need to be updated, Guterres told a press conference Sunday on the margins of the G7 summit in Hiroshima, Japan, according to Reuters.

    “The global financial architecture is outdated, dysfunctional and unfair,” Guterres said. “In the face of the economic shocks from the COVID-19 pandemic and the Russian invasion of Ukraine, it has failed to fulfill its core function as a global safety net.”

    Guterres made the same point on Saturday, writing in a tweet that it was “time to think seriously about the reform” of the international financial architecture.

    The U.N. Security Council came under fire in April when Russia assumed the rotating presidency of the 15-member body despite the fact that 141 countries condemned its aggression on Ukraine. Experts have claimed that Russia’s veto in the Security Council undermines the U.N.’s effectiveness on the international stage.

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    Gregorio Sorgi

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  • Top global regulator warns of ‘massive adjustment’ for financial system

    Top global regulator warns of ‘massive adjustment’ for financial system

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    AMSTERDAM — The world’s financial system needs a “massive adjustment” to cope with higher interest rates, and key rules will have to be revisited, according to a top global regulator.

    Klaas Knot, chair of the Financial Stability Board, an international standard-setting body, told POLITICO that rising interest rates fueled problems at several regional U.S. banks and similar losses may show up elsewhere.

    “The speed with which interest rates have changed, that, of course, implies a massive adjustment in the financial system,” the Dutchman said in an interview from his office in Amsterdam. He added it was unclear exactly where those losses would be.

    “In many, many places of the financial system, that adjustment will go well because it has been well-anticipated and has been well-managed. But history teaches us that is not always the case everywhere.”

    The warning of potential trouble ahead echoes fears of other global officials and comes after the failure of Silicon Valley Bank, a $200 billion lender to the tech sector, sparked contagion across U.S. regional banks. The subsequent market panic contributed to bringing down Credit Suisse in Europe, forcing the Swiss government to hastily merge the lender with UBS.

    Any domino effect can have huge impacts for the economy, businesses and households.

    “We’ve seen the impact of rapidly changing interest rates manifest in the second tier of the regional U.S. banks,” Knot said. “But I would be very surprised if that was the only sub-sector of the financial system where you would have a significant impact.”

    Despite the turmoil, Knot said he was more worried about risks stashed at “nonbanks” — a term that encompasses investment funds, insurers, private equity, pension funds and hedge funds — where authorities have less visibility on hidden losses.

    “If they are hidden for a very long period of time, sometimes the problem then grows so big, that it only becomes unhidden or visible when it’s too big to deal with,” he said.

    The FSB boss pointed to financial players that took the wrong side of a bet on interest-rates and may now be nursing losses. “I hope, of course, that this is well-dispersed over the financial sector,” he said. “Where we are worried is specific concentrations of such risk.”

    In particular, he said, those losses could be amplified when there is a mismatch between hard-to-sell assets and easy withdrawals, and borrowed money is used to juice returns.

    That combination has worried authorities for some time — but Knot said this didn’t mean regulators are behind. For instance, the FSB, whose membership includes central bankers, financial regulators and finance ministries, will issue recommendations for open-ended investment funds in July.

    Under the plans, regulators would get more powers to trigger restrictions in a crisis, rather than leaving those decisions in the hands of the fund manager.

    Rewriting the rules

    The financial rulebook will need to be revisited substantially in light of recent events, he said.

    “It’s a mistake to see the regulatory framework as something that is fixed, and something that should not be touched,” he said. “The financial industry is not at all fixed, it is continuously evolving. So, the regulatory framework should evolve with the evolving risks.”

    The Dutchman said this means revisiting assumptions about how quickly banks can sell assets to meet depositor withdrawals, the speed of those withdrawals in a digital era, and the reserves that have to be set aside to cover potential unrealized losses from interest-rate risks — all of which were factors in the U.S. bank collapses.

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    Hannah Brenton

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  • Crypto can’t just ‘burn out’, says top global regulator

    Crypto can’t just ‘burn out’, says top global regulator

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    This article is part of the Politicization of Central Banking special report.

    AMSTERDAM — Global regulators can’t afford to just let crypto “burn out,” according to Klaas Knot — the man overseeing international efforts to bring the sector to heel.

    The crypto industry has absorbed some crushing blows over the last year, including the collapse of the FTX exchange in November.

    That has led to calls in some quarters for regulators to sit back and let the crypto crater deepen, rather than applying regulation that might legitimize the speculative assets.   

    “That’s a little bit overdone,” Knot, chair of the Financial Stability Board, told POLITICO in an interview at the end of April. “This whole ‘let it burn out’ strategy, I don’t believe in it.”

    Indeed, expectations that crypto would die from its wounds have proved premature: the collapse of a string of U.S. regional banks has revived true believers’ faith that digital currencies will outlive mainstream finance. Bitcoin has risen nearly 50 percent since Silicon Valley Bank went under, while the stablecoin Tether’s market cap — a rough proxy for global exposure to crypto — is back where it was before the first of the big crypto scandals last year.

    The FSB, an international standard-setting body, is working on a global regulatory framework for crypto assets and stablecoins, with final recommendations due out in July.

    Under the proposals, which are not yet finalized, crypto would become subject to tougher supervision, along with firm rules on information exchange, disclosures, governance and risk management — like other financial markets.

    Knot, who also heads the Dutch central bank, said that reflects the reality that the crypto market exists, and that ordinary people are investing their money in it — despite regular warnings from officials about its riskiness, and the constant drumbeat of scams.

    “We live in a free world. If investors and consumers opt to invest in these crypto assets, then it behooves us to come forward with an appropriate regulatory response,” he said.

    It’s also because some of crypto’s blowups, including FTX, have replayed bad behavior from the world of traditional finance that securities regulation aims to prevent — including the basics, like dipping into customers’ funds.

    Knot highlighted enduring “serious issues” with the sector, such as conflicts of interests at crypto conglomerates and the need to keep leverage out of the system.

    “These are structural vulnerabilities that will not go away,” he added.

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    Hannah Brenton

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  • The tension at the heart of the ECB

    The tension at the heart of the ECB

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    FRANKFURT ― The markets are jittery and inflation still needs taming. Coming together, those two things put the European Central Bank in a real bind.

    Fight one fire and it could cause the other to flare. The ECB can keep raising interest rates to try to get inflation under control, but that risks fueling financial market tensions. Conversely, it can give banks some breathing space by slowing its rate-hiking, but that carries the danger of prolonging the region’s economic malaise.

    Frankfurt’s official line is that it can do both with no serious consequences. Many economists in the eurozone don’t buy that.

    In private, it’s a dilemma that splits the ECB’s decision-makers, and even in public differences of opinion are bubbling to the surface. Here’s what’s at stake:

    Why is the ECB raising rates?

    The idea is that increasing interest rates subdues inflation because it makes consumers and businesses less likely to borrow ― so that results in reduced spending.

    As inflation has started to pick up since last summer, the ECB has raised interest rates at a record pace. They’ve gone from -0.5 to 3 percent as the annual rate of price rises has surged to a eurozone record 10.6 percent in October.

    The Bank tries to keep inflation at 2 percent so it’s currently way off target.

    How this contributed to the crisis

    The unpleasant side effect is that with rising borrowing costs (because of higher interest rates), the value of bonds that banks hold usually fall. This gives investors a bad case of the jitters. After the collapse in March of lenders like Silicon Valley Bank and Credit Suisse ― though their problems seemed unconnected ― it was this that prompted concerns they might not be the only institutions with troubles, and fueled contagion fears around the globe.

    But Lagarde plowed on regardless

    The ECB remained unfazed in the face of emerging banking troubles: It delivered a previously signaled 0.5 percentage-point rate increase in March, less than a week after SVB failed and at a time when Swiss banking giant Credit Suisse was teetering.

    Following that decision, ECB President Christine Lagarde stressed that she sees no trade-off between ensuring price stability and financial stability.  

    In fact, she said the Bank could continue to lift rates while addressing banking troubles with other tools.

    The case against

    Many economists disagree with Lagarde that the battle for price stability can be pursued without risking financial stability.

    The ECB delivered 0.5 percentage-point rate increase in March, less than a week after SVB failed | Patrick T. Fallon/AFP via Getty Images

    Claiming so “should be a career-ending statement,” said Stefan Gerlach, chief economist at EFG Bank in Zurich and a former deputy governor of the Central Bank of Ireland. “This is the idea of the ‘separation principle’ of 2008 revisited. That wasn’t a good idea then, and isn’t now either,” he added.

    What’s the separation principle?

    In 2008, at the start of the financial crisis, as well as in 2011, when the sovereign debt crisis hit, the ECB adhered to the idea that interest rates could be used to ensure price stability at the same time as other measures, such as generous liquidity injections, could ease market tension.

    But this just added to the problems and had to be unwound quickly.

    This time around, the Portuguese member on the ECB Governing Council, whose country suffered particularly under the consequences of the sovereign debt crisis, is less blasé than Lagarde.

    “Our history tells us that we had to backtrack a couple of times already during processes of tightening given threats to financial stability. We cannot risk that this time,” Mario Centeno told POLITICO in an interview. 

    The case for Lagarde

    After the initial fears that troubles could spread across the eurozone, investor nerves have calmed and bank shares started to recover. At the same time, new data showed that underlying inflation pressures kept rising, suggesting that Lagarde and her colleagues were right to stick to their guns ― at least for now.

    If that’s the case, March’s interest rate rise ― what Commerzbank economist Jörg Krämer described as “necessary” investment in the central bank’s credibility ― will have paid off.

    Market turmoil actually helps

    The nervous markets could help the ECB to reach its inflation target without having to raise interest rates as aggressively as previously thought.

    Banks tend to slap an additional risk premium on their lending rates which raises the cost of borrowing money for consumers and business. So banks end up doing part of the tightening job for the central bank.

    ECB Vice President Luis de Guindos suggested as much in an interview released last month, though he cautioned that it was too early to assess how much impact exactly it may have.

    What’s the endgame?

    The challenge for the ECB is to strike the right balance. If it doesn’t it risks either the repeat of 2008-style financial troubles or a return to the stagflationary period (low growth on top of high inflation) that roiled the Continent in the 1970s.

    If it raises rates too aggressively, bank failures followed by a recession risks forcing the ECB into an interest rate U-turn for the third time, creating massive credibility risks. Conversely, if they don’t hike enough, the central bank may lose a grip on inflation, which is its main mandate.

    The only way Lagarde can win is to deliver both price stability and financial stability. In that sense, there is no trade-off ― one without the other just won’t be enough.

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  • IMF’s Georgieva: ‘Risks to financial stability have increased’

    IMF’s Georgieva: ‘Risks to financial stability have increased’

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    The outlook for the global economy is likely to remain weak in the medium term amid heightened risks to financial stability, according to International Monetary Fund Managing Director Kristalina Georgieva.

    “We expect 2023 to be another challenging year, with global growth slowing to below 3 percent as scarring from the pandemic, the war in Ukraine, and monetary tightening weigh on economic activity,” Georgieva said on Sunday at a conference in China. “Even with a better outlook for 2024, global growth will remain well below its historic average of 3.8 percent,” she said.

    “It is also clear that risks to financial stability have increased,” Georgieva said. “At a time of higher debt levels, the rapid transition from a prolonged period of low-interest rates to much higher rates — necessary to fight inflation — inevitably generates stresses and vulnerabilities, as evidenced by recent developments in the banking sector in some advanced economies.”

    Policymakers have acted decisively in response to threats to financial stability, helping ease market stress to some extent, she said. But “uncertainty is high, which underscores the need for vigilance,” she added.

    Georgieva also warned about risks of geo-economic fragmentation, which she said “could mean a world split into rival economic blocs — a ‘dangerous division’ that would leave everyone poorer and less secure. Together, these factors mean that the outlook for the global economy over the medium term is likely to remain weak,” she said.

    Georgieva spoke during the second day of the China Development Forum in Beijing. The three-day annual event is a social mixer of politics and business, bringing together members of the Chinese Politburo with dozens of CEOs from Western companies like Siemens, Mercedes-Benz and Allianz.

    “Fortunately, the news on the world economy is not all bad. We can see some ‘green shoots,’ including in China,” Georgieva said, adding that Beijing is set to account for around a third of the global growth this year.

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    Bartosz Brzezinski

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  • UBS buys Credit Suisse in rush deal

    UBS buys Credit Suisse in rush deal

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    FRANKFURT — Swiss banking giant UBS will buy the country’s second-largest bank Credit Suisse in a deal that will come as a relief to financial markets in Europe and across the world.

    UBS said in a statement that the total price is 3 billion Swiss francs, or about $3.25 billion, in UBS shares.

    The deal was pushed through in an effort to avoid further turmoil in global banking following the failure of Silicon Valley Bank and another regional lender in the U.S.

    “With the takeover of Credit Suisse by UBS, a solution has been found to secure financial stability and protect the Swiss economy in this exceptional situation,” the Swiss National Bank said in a separate statement, noting that the deal was made possible with the support of the Swiss federal government, the Swiss Financial Market Supervisory Authority FINMA and the Swiss National Bank.

    The central bank added that UBS and Credit Suisse can obtain a liquidity assistance loan of up to 100 billion francs.

    Highlighting the urgency of securing a deal for the bank before markets open on Monday, Swiss authorities adjusted laws to allow further provision of liquidity by the Swiss central bank, while the government agreed to provide additional guarantees.

    The expeditious rescue of Credit Suisse was welcomed by the European Central Bank as well as the Federal Reserve in the U.S.

    The “swift action” by the Swiss authorities “are instrumental for restoring orderly market conditions and ensuring financial stability,” ECB President Christine Lagarde said in a statement.

    The 167-year-old Credit Suisse has been involved in a series of scandals that have undermined the confidence of investors and clients. It has thus found itself in the eye of the storm when the collapse of Silicon Valley Bank sparked fears of a banking crisis.

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    Johanna Treeck

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  • The crypto ‘contagion’ that helped bring down SVB

    The crypto ‘contagion’ that helped bring down SVB

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    As U.S. banking regulators begin their post-mortem of Silicon Valley Bank, some pundits are pointing the finger at crypto markets, whose own collapse over the past year left the tech-focused lender hopelessly exposed.

    The conventional wisdom about crypto is that it’s “self-referential” — a separate universe to conventional finance — and that its inherent volatility can be contained. The emerging “contagion” theory is that there are enough linkages for extreme turmoil to spill over, much as a virus can sometimes jump from one species to another.

    That’s what happened here, according to Barney Frank, the former U.S. congressman who wrote sweeping new banking rules after the banking crisis in 2008, and joined the crypto-friendly Signature Bank as a board member in 2015.

    “I think, if it hadn’t been for FTX and the extreme nervousness about crypto, that this wouldn’t have happened,” Frank told POLITICO this week. “That wasn’t something that could have been anticipated by regulators.”

    FTX, the crypto exchange that collapsed in November amid allegations of massive fraud, capped a year of turmoil in crypto markets, as investors began withdrawing funds from riskier ventures in response to rising interest rates, which in turn exposed the shaky foundations underpinning the industry. The ensuing “crypto winter” saw the value of the industry plummet by two-thirds, from a peak of $3 trillion in 2021.

    Policymakers sought to reassure the public that volatility in the crypto market, blighted by scams and charlatans who sought to profit from investors’ fear of missing out, would naturally be contained. With the collapse of SVB, that claim is facing its biggest test yet.

    Patient zero

    Under the contagion theory, “patient zero” could be traced back to the implosion of TerraUSD, an “algorithmic stablecoin” that relied on financial engineering to keep its value on par with the U.S. dollar. That promise fell short in May last year following a mass sell-off, creating panic among investors who had used the virtual asset as a safe haven to park cash between taking punts on the crypto market. The origin of the crash is still subject to debate but rising interest rates are often cited as one of the main culprits. 

    TerraUSD’s demise was catastrophic for a major crypto hedge fund called Three Arrows Capital, dubbed 3AC. The money managers had invested $200 million into Luna, a crypto token whose value was used to prop up TerraUSD, which had become the third largest stablecoin on the market. A British Virgin Islands court ordered 3AC to liquidate its assets at the end of June.

    The fund’s end created even more problems for the industry. Major crypto lending businesses, such as BlockFi, Celsius Network and Voyager, had lent hundreds of millions of dollars to 3AC to finance its market bets and were now facing massive losses.

    Customers who had deposited their digital assets with the industry lender were suddenly locked out of their accounts, prompting FTX — then the third largest crypto exchange — to step in and bail out BlockFi and Voyager. Meanwhile, central banks continued to raise rates.

    The contagion seemed under control for a few months until revelations emerged in November that FTX had been using client cash to finance risky bets elsewhere. The exchange folded soon after, as its customers rushed to get their money out of the platform. BlockFi and Voyager, meanwhile, were left stranded.

    Outbreak widens

    This is the point where the outbreak of risk in the crypto industry might have jumped species into the banking sector. 

    Silvergate Bank and Signature Bank, two smaller banks that also failed last week, had extensive business with crypto exchanges, including FTX. Silvergate tried to downplay its exposure to FTX but ended up reporting a $1 billion loss over the last three months of 2022 after investors withdrew more than $8 billion in deposits. Signature also did its best to distance itself from FTX, which made up some 0.1 percent of its deposits. 

    FTX, the crypto exchange that collapsed in November amid allegations of massive fraud, capped a year of turmoil in crypto markets | Leon Neal/Getty Images

    SVB had no direct link to FTX, but was not immune to the broader contagion. Its depositors, including tech startups, crypto firms and VCs, started burning their cash reserves to run their businesses after venture capital funding dried up.

    “SVB and Silvergate had the same balance sheet structure and risks — massive duration mismatch, lots of uninsured runnable deposits backed by securities not marked to market, and inadequate regulatory capital because unrealized fair value losses excluded,” former Natwest banker and industry expert Frances Coppola told POLITICO.

    Eventually, the deposit drain forced SVB to liquidate underwater assets to accommodate its clients, while trying to handle losses on bond portfolios and an outsized bet on interest rates. As word got out, the withdrawals turned into a bank run as frictionless and hype-driven as a crypto bubble.

    Zachary Warmbrodt and Izabella Kaminska contributed reporting from Washington and London, respectively.

    This article has been updated to correct the value of the crypto industry.

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  • Silicon Valley Bank collapse sets off scramble in London to shield UK tech sector

    Silicon Valley Bank collapse sets off scramble in London to shield UK tech sector

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    LONDON — The U.K. government was scrambling on Sunday to limit the fallout for the British tech sector from the collapse of Silicon Valley Bank, a big U.S. lender to many startups and technology companies.

    The government is treating the potential reverberations as “a high priority” after a run on deposits drove California-based SVB into insolvency, marking the largest bank failure since the global financial crisis, U.K. Chancellor of the Exchequer Jeremy Hunt said in a statement Sunday morning. U.S. Treasury Secretary Janet Yellen and other policymakers were on alert that problems at SVB could spread.

    Hunt said the British government is working on a plan to backstop the cashflow needs of companies affected by SVB’s implosion and the halt in trading of its British unit, Silicon Valley Bank UK. The Bank of England announced on Friday that the U.K. unit is set to enter insolvency.

    Silicon Valley Bank’s “failure could have a significant impact on the liquidity of the tech ecosystem,” Hunt said.

    The government is working “to avoid or minimize damage to some of our most promising companies in the U.K.,” the chancellor said. “We will bring forward immediate plans to ensure the short-term operational and cashflow needs of Silicon Valley Bank UK customers are able to be met.” 

    Hunt told the BBC Sunday morning that the government would have a plan that deals with the operational cashflow needs of companies “in the next few days.”

    Discussions between the governor of the Bank of England, the prime minister and the chancellor were taking place over the weekend, according to the statement.

    Speaking on Sky News Sunday morning, Hunt said that Bank of England Governor Andrew Bailey had made it clear that there was “no systemic risk to our financial system.” But Hunt warned that there was a “serious risk” to the technology and life-sciences sectors in the U.K. 

    Ministers held talks with the tech industry on Saturday after tech executives in an open letter warned Hunt that the SVB collapse posed an “existential threat” to the U.K. tech sector. They called for government intervention.

    Britain’s science and technology minister on Saturday pledged to do “everything we can” to limit the repercussions on U.K. tech companies.

    Michelle Donelan, who heads the newly created Department for Science, Innovation and Technology, said in a tweet: “We recognize that the tech sector is often not cashflow positive as they grow and I am determined to stand with them as we do everything we can to minimize impact on the sector.”

    Chancellor Jeremy Hunt said protecting the U.K. sector from the impacts of SVB’s collapse was a “high priority” | Justin Tallis/AFP via Getty Images

    A bank insolvency procedure for Silicon Valley Bank UK would mean eligible depositors would be paid the protected limit of £85,000, or up to £170,000 for joint accounts. 

    The Bank of England said in its Friday statement that SVB UK “has a limited presence in the U.K. and no critical functions supporting the financial system.”

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  • Truss’ jittery Tories blame Bank chief over market meltdown

    Truss’ jittery Tories blame Bank chief over market meltdown

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    As Britain’s central bank boss, tasked with managing inflation and setting interest rates, Andrew Bailey likes targets. Now he is one.

    Markets are dumping U.K. assets amid chaotic policymaking from Liz Truss’ new government — but Bailey’s rocky stewardship of the Bank of England is getting a growing share of the blame. His harshest critics include some of Truss’ most senior Conservative Party colleagues.

    At stake are home loans for 2 million households coming due for renewal amid cripplingly high interest rates in the next two years and the viability of pension funds managing more than £1 trillion worth of assets. Failure to quell a “fire sale” of U.K. bonds and currency risks a financial meltdown that could spread far beyond British shores.

    The current bond market pressure began after U.K. Chancellor Kwasi Kwarteng announced a vast package of unfunded tax cuts, stoking investors’ fears about the long-term sustainability of the government’s debt. 

    The dramatic selloff of government bonds sparked a panic at U.K. pension funds, which couldn’t handle the price falls, and has huge knock-on impacts for mortgage rates and borrowing costs.

    The political fallout has so far landed on Truss’ government’s shoulders — prompting U-turns on key policies as opinion polls showed cratering support.

    Yet before the U.K.’s self-inflicted turmoil, Bailey was feeling political pressure over the central bank’s handling of double-digit inflation and the rising cost of living that comes with it. 

    While No. 10 refuses to be drawn on the Bank’s decisions, Business Secretary Jacob Rees-Mogg suggested a failure to raise interest rates quickly was at the root of the turmoil in financial markets.

    He dismissed it as “commentary” to draw a direct link between the government’s mini-budget and concerns over the U.K.’s financial stability that led to emergency intervention from the Bank, adding that pension funds’ “high-risk” activities had played a role.

    “It could just as easily be the fact that the day before, the Bank of England did not raise interest rates by as much as the Federal Reserve did,” he told the BBC’s Today program. 

    In another apparent swipe at the Bank, Rees-Mogg added: “The pound and other currencies have been falling against the dollar because interest rates in the U.S. have been rising faster than they have in other markets.”

    In the immediate aftermath of Kwarteng’s disastrous mini-budget, the Bank seemed to be in command of the situation when it stepped in to calm the pension fund crisis and refused to be pushed into an early interest rate rise by markets. But two further interventions this week and confusion over stark comments from Bailey himself risk undermining that impression.

    The governor on Tuesday issued a rare ultimatum to beleaguered pension funds struggling to meet cash calls in the government bond market. “You’ve got three days left now. You’ve got to get this done,” he warned at an event in Washington.

    The bank has effectively bailed out pension funds since the U.K. government’s mini-budget roiled the markets. The bond-buying intervention is intended to offer temporary relief and give the affected funds time to raise enough cash to handle historic surges in yields.

    Bailey’s message appeared to be aimed at upping the pressure on funds to sell assets in time rather than expecting an extension beyond Friday’s deadline. “We will be out by the end of this week,” he said.

    Yet the remarks seemed to backfire instantly, sparking a sharp fall in the pound, although it has since recovered.

    U.K. government borrowing costs also increased again on Wednesday, with the yield on 30-year gilts moving above 5 percent — the level that first sparked the bank’s intervention — before dropping back after the Bank used its firepower to buy £4.4 billion of gilts.

    Financial market experts think the governor’s comments were a mistake that will force the bank into following the government’s recent U-turns. 

    Mike Howell of CrossBorder Capital described Bailey’s words as the “shortest suicide note in history,” and said the governor will have to change course. 

    “Andrew Bailey’s insistence that emergency support will end on Friday is an unsustainable position that we expect to be reversed quickly,” said Oxford Economics chief economist Innes McFee.

    If the Bank loses credibility, its ability to rescue the economy from market disruption will be severely hampered. Increasingly costly interventions will yield ever more limited results if investors lose faith in the U.K.’s most important financial institution.

    Before Bailey’s comments on Tuesday, one markets strategist said the Bank could “test the water” by stopping the program on Friday and then restarting if necessary — but that would be risky because it’s unclear how much yields would have to rise before triggering the same problems at pension funds.

    “While a very able central banker, he has spent most of his career outside the BoE’s monetary policy and markets areas,” said EFG Bank chief economist Stefan Gerlach, previously a central banker himself.

    “He is not the best fit for the job, given the nature of the problems the Bank is facing now. His communications missteps over the last year were damaging,” he said, pointing to Bailey’s confusing guidance on interest rates. “It’s like the fire brigade saying ‘you have to have your fire before Friday because then we are heading home.’”

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  • Global crypto markets face tougher rules under G20 plan

    Global crypto markets face tougher rules under G20 plan

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    Crypto’s Wild West era may be coming to an end.

    According to the Financial Stability Board (FSB), a global financial standard-setter, most of the cryptocurrency market should be subject to the same tough rulebook that governs traditional finance.

    The FSB, which was born in the wake of the 2008 financial meltdown to stave off further shocks, will propose the plan to rein in crypto to finance ministers and central bankers from the Group of 20 industrialized countries gathering in Washington next week, the plan’s chief architect, Steven Maijoor, told POLITICO.

    “A lot of the activities in crypto assets and crypto assets markets resemble activities in the traditional financial system and therefore we take the approach: Same activity, same risk, same regulation,” Maijoor, who sits on the Dutch central bank’s governing board and oversees banking supervision, said in Prague in early September.

    The move is set to put major crypto trading platforms on red alert, coming as the U.S. Securities and Exchange Commission seeks to impose securities regulation on cryptocurrencies and as the EU prepares its own rules for digital markets.

    More broadly, the FSB’s work on digital assets is likely to act as a cold shower for crypto currencies that seek to expand their services without complying with regulations.

    Regulators fear the lack of investor safeguards could see volatility in cryptocurrency markets spilling over into the traditional finance sector, as banks and money managers venture into the market.

    Some $2 trillion of the market’s value has evaporated since its highs of November last year, triggering corporate collapses and exposing scams that left millions of crypto investors penniless. Risks within the crypto markets are still contained. But that could quickly change and threats could spill over to financial markets from various channels, according to the European Securities and Markets Authority.

    Maijoor will present G20 policymakers with draft recommendations that he’s been developing with a team of global regulators within the FSB since April with the view of securing financial stability as crypto goes mainstream. Countries around the world will need to decide whether new rules are needed for novel arrivals within the crypto market, such as digital wallets. The rest should be captured by new or existing financial rules.

    “This is not only related to securities,” said the 58-year-old, who used to lead the EU’s securities regulator before getting a job at De Nederlandsche Bank. “There are also already some crypto activities that are captured by anti-money laundering laws and regulations and we can observe that also, in that case, there is non-compliant behavior.”

    The example of companies skirting around dirty money safeguards is an easy one for the Dutchman to give. His central bank in late April fined the world’s biggest crypto exchange, Binance, €3 million for offering services to Dutch citizens without having cleared the required Dutch safeguards against dirty money — gaining a competitive advantage against its rivals. Binance objected to the fine in June.

    The Financial Stability Oversight Council, chaired by U.S. Treasury Secretary Janet Yellen, said the crypto industry needs to be brought to heel in several areas | Alex Wong/Getty Images

    Ministers and governors will also get updated recommendations on how to regulate global stablecoins, digital tokens that are tied to national currency or a reserve of financial products to keep their value steady. The stablecoin update is separate from the crypto recommendations and came in response to Facebook’s failed bid to introduce a virtual currency for some 2.9 billion social media users around the world.

    Maijoor’s work will be subject to consultation, so companies and countries will be able to suggest changes to what will become the global blueprint for supervising the market.

    Locking horns

    The recommendations could embolden U.S. banking and markets regulators, which are increasingly taking the position that digital asset trading platforms and brokerages should follow existing regulations.

    The Financial Stability Oversight Council, which is chaired by U.S. Treasury Secretary Janet Yellen and counts SEC Chair Gary Gensler and the heads of other federal agencies among its members, on Monday released a report that identified several areas where the crypto industry needs to be brought to heel. 

    “Crypto cannot exist outside of our public policy frameworks. That’s regardless of what [Bitcoin’s pseudonymous creator] Satoshi Nakamoto might have initially thought, or what market participants might say today,” Gensler said during Monday’s FSOC meeting. 

    Ripple and Coinbase, both major crypto exchanges that have locked horns with Gensler, will be hoping for a different outcome that involves new rules.

    Coinbase has argued that crypto assets are more akin to commodities and that the SEC classifying them as securities is like putting a straitjacket on how the market could develop, especially considering those rules were developed in the 1930s. The Commodity Futures Trading Commission would be a far better fit, according to the exchange.

    “I think it is reasonable to assume that none of the authors who drafted these securities statutes from the 1930s … did so while thinking of a day when a decentralized, cryptographically-based, automated financial instrument would be adopted en masse by millions of people in the United States and around the world,” Coinbase’s chief policy officer, Faryar Shirzad, wrote in a blog in July.

    Sam Sutton contributed reporting from New York.

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  • Collectius Taps TransUnion’s Data-Driven Collection Solutions Amid Economic Slowdown Due to COVID-19

    Collectius Taps TransUnion’s Data-Driven Collection Solutions Amid Economic Slowdown Due to COVID-19

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    Press Release



    updated: Jun 20, 2020

    ​​​​​Amid the global economic slowdown, Singapore-based debt management company Collectius embraces the innovative data-driven solutions provided by TransUnion to further strengthen its business operations in the Philippines. In its recent subscription to said services, Collectius was able to detect that as much as 46% of 318,000 consumers who had collection accounts have low to medium risk scores, which translates to high rates of recovery.

    A trusted credit management servicing company employing fintech and innovation, Collectius continues to build its position as the preferred debt purchaser of consumer non-performing loans (NPLs) in the ASEAN region.

    “With TransUnion, we become more intelligent. We have more accurate data, meaning our system can use the most effective strategy to support our customers to become debt-free again, adapting installment payment solutions to their capacity,” said Gustav Eriksson, Collectius Group founder and CEO.

    Customers who have then successfully paid their obligations are given proof of settlement, and no further collections of the same may be executed. Their data is also updated with TransUnion, improving their credit score and bettering their chances of acquiring financial services such as loans from banks or other financial institutions so they can achieve their financial goals.

    “TransUnion’s stringent data-quality standards and auditing processes ensure efficiency and effectiveness, providing businesses with a better understanding of consumers. This ultimately helps them make more informed decisions on who to trust,” said Pia Arellano, TransUnion Philippines president and CEO.

    Gold Standard in Collection

    The threat of COVID-19 notwithstanding, news of harassment and privacy breaches by online lending apps in the exercise of their collection policies maimed the industry. Whilst government agencies have ordered the shutdown of several of these apps, industry expert Collectius employs what it calls the “Collectius way of collections” — one that is rooted in good morals, compliance with local and international regulations, and a personalized approach.

    Collectius ensures they end up more financially literate than before, gaining knowledge about the accumulation of interest and the different fees and structures that banks and creditors add as a result of an NPL, and fully grasp the advantages of becoming debt-free in the end. In the same way, TransUnion also champions responsible borrowing among consumers.

    “While a collection account in one’s credit report negatively affects his credit score, it’s not a dead end. Apart from gaining back your credibility with financial institutions, settling obligations also helps the economy especially during trying times like this,” Arellano concluded.

    More details here: https://www.collectius.com/post/collectius-x-transunion

    Media Contact: press@collectius.com

    Source: Collectius Group

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