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Tag: United Kingdom

  • UK cybersecurity center looking into risks posed by TikTok

    UK cybersecurity center looking into risks posed by TikTok

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    LONDON (AP) — Britain’s security minister said Tuesday he has asked the country’s National Cyber Security Center to review threats posed by TikTok amid calls for the U.K. to impose a ban on the Chinese-owned social media app.

    Security Minister Tom Tugendhat said he was waiting for a review from the government’s cybersecurity experts before deciding on the “hugely important question.”

    Prime Minister Rishi Sunak hinted a day earlier that the U.K. could follow the U.S. and the European Union in banning the app from government-issued mobile phones and devices.

    “We take security of devices seriously … and we look also at what our allies are doing,” Sunak said during his visit to the U.S. on Monday.

    “We want to make sure that we protect the integrity and security of sensitive information,” Sunak told ITV News. “And we will always do that and take whatever steps are necessary to make sure that happens.”

    The U.S. government said last month that employees of federal agencies have to delete TikTok from all government-issued mobile devices. Congress, the White House, U.S. armed forces and more than half of U.S. states had already banned TikTok, while the European Commission also temporarily banned the app from employee phones.

    The moves were prompted by growing concerns that TikTok’s parent company, ByteDance, would give user data such as browsing history and location to the Chinese government, or push propaganda and misinformation on its behalf.

    Last year, Britain’s Parliament shut down its TikTok account — meant to reach younger audiences with Parliament content — just days after its launch following concerns from lawmakers.

    “What certainly is clear is for many young people TikTok is now a news source and, just as it’s quite right we know who owns the news sources in the UK … it’s important we know who owns the news sources that are feeding into our phones,” Tugendhat told Sky News on Tuesday.

    In a statement, TikTok said bans by other governments were “based on misplaced fears and seemingly driven by wider geopolitics.” It said it would be “disappointed” if the U.K. imposes a ban, and that it was committed to working with British authorities to address any concerns.

    “We have begun implementing a comprehensive plan to further protect our European user data, which includes storing UK user data in our European data centres and tightening data access controls, including third-party independent oversight of our approach,” its statement said.

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  • Rishi Sunak picks his way through budget minefield

    Rishi Sunak picks his way through budget minefield

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    LONDON — “Better than the last guy” might not be quite the tagline every world leader hopes for. It could yet be Rishi Sunak’s winning formula.

    The British prime minister, swept into office late last year by wave after wave of Tory psychodrama, has cleared several major hurdles in the space of the past month. His success has even sparked a shocking rumor in Westminster that — whisper it — he might actually be quite good at his job. 

    That was the murmur among hopeful Conservative MPs ahead of this week’s U.K. budget, anyway — many of them buoyed by the PM’s recent moves on two long-running sources of angst in Westminster.

    First came an apparent resolution to the intractable problem of post-Brexit trade arrangements in Northern Ireland. Sunak’s so-called Windsor Framework deal with Brussels landed to near-universal acclaim.

    A week later, Sunak unveiled hard-hitting legislation to clamp down on illegal migration to the U.K., coupled with an expensive deal with France to increase patrols across the English Channel. Tory MPs were delighted. The Illegal Migration Bill sailed through parliament Monday night without a single vote of rebellion.

    Then came Wednesday’s annual budget announcement, with Sunak hoping to complete an improbable hat trick. 

    It started well, with Chancellor Jeremy Hunt making the big reveal that the U.K. is no longer expected to enter recession this year, as had been widely predicted.

    But a series of jaw-droppers in the budget small print show the scale of the challenge ahead. 

    The U.K.’s overall tax take remains sky-high by historic standards — an ominous bone of contention for skeptical Tory MPs and right-wing newspapers alike. Meanwhile, millions of Britons’ living standards continue to fall, thanks to high fuel bills and raging inflation. U.K. growth forecasts remain sluggish for years to come.

    “He’s chalking up some wins,” observed one former party adviser grimly, “because he’s going to need them.”

    ‘Workmanlike’

    Among all but the bitterest of Sunak’s Tory opponents, there is a palpable sense of relief about the way he has approached his premiership so far.

    “It doesn’t mean everything will suddenly turn to gold,” said Conservative MP Richard Graham, a longtime Sunak-backer. “But like Ben Stokes and England’s cricket team, his quiet self-confidence may change what the same team believes is possible.” 

    Nicky Morgan, a Conservative peer and former Treasury minister, praised a “workmanlike” budget that would reassure voters and the party there was a “firm hand on the tiller” after the “turmoil” of the preceding year with two prime ministers stepping down, Boris Johnson and then Liz Truss.

    UK Chancellor Jeremy Hunt meets children during a visit to Busy Bees Battersea Nursery in south London after delivering his Budget earlier in the day | Stefan Rousseau/POOL/AFP via Getty Images

    Most of Wednesday’s biggest announcements, including an extra £4 billion for childcare and a decision to lift the cap on pensions allowances, were either trailed or leaked in advance. This may have made for a predictable budget speech, but as Morgan put it: “I think that’s probably what businesses and the public need at the moment.”

    An ex-minister who did not originally support Sunak for leader said that the general tone of the budget, together with the Northern Ireland deal and small boats legislation, meant that “increasingly it’s hard for hostile voices to pin real failure on Rishi.”

    Others, however, fear key announcements could yet unravel. An expensive change to pension taxes was instantly savaged by critics as a “giveaway for the 1 percent.” Headline-grabbing back-to-work programs and an expansion of free childcare will take years to kick in.

    Hiking corporation tax was the “biggest mistake of the budget,” Truss ally and former Cabinet minister Jacob Rees-Mogg complained.

    Doing the hard yards

    Observers note that in the wake of the rolling chaos under Truss and Johnson, the bar for a successful government has been lowered.

    “[Sunak] could stand at the podium and soil himself, and he’d be doing a better job than his predecessors,” noted one business group lobbyist on Wednesday evening, having watched budget day unfold.

    But even Sunak’s fiercest critics praise his work rate and attention to detail, in sharp contrast to Johnson. Most accept — grudgingly — he has set up an effective Downing Street operation.

    Having returned from his Paris summit last Friday evening, the PM kicked off budget week with a whirlwind trip to the west coast of California to launch a defense pact with the U.S. and Australia, arranging a bank bailout along the way. He landed back in the U.K. less than 24 hours before Hunt unveiled the annual spending plan.

    “It turns out working like an absolute maniac and being forensic is quite useful,” one of his ministers said. 

    Another Tory MP added: “He’s got the brainpower and will do the hours. He’s not good at barnstorming politics or old school dividing lines — but he is good for the politics we have right now.”

    There has also been a clear effort to run a tighter ship behind the scenes at No. 10. One veteran of Johnson’s Downing Street said the atmosphere seemed “calm” in comparison.

    There are tentative signs that voters are starting to notice.

    James Johnson, who ran a recent poll by JL Partners which showed Sunak’s personal ratings are on the up, said the PM’s growing reputation as a “fixer” seems to be behind his recent rally, and that the biggest increase on his polling scorecard was on his ability to “get things done.” 

    It remains to be seen if this will shift the dial on the Tory Party’s own disastrous ratings, however, which languish some 25 points behind the opposition Labour Party. “Voters have clearly lost trust in the Tories,” Johnson said. “But if government can deliver … I would expect it to feed through.”

    Anthony Browne, a Tory MP elected in 2019, expressed hope that Sunak had begun “changing the narrative” which in turn “could restore our right to be heard.”

    Trouble ahead?

    Sunak will be well aware that plenty of recent budgets — not least Truss’ spectacular failure last September — have unraveled in the 72 hours after being announced.

    And while expanding free childcare, incentivizing business investment and ending the lifetime pensions allowance were all crowd-pleasers for his own MPs, they were not enough to conceal worrying subheadings.

    The tax take is predicted to reach a post-war high of 37.7 percent in the next five years, while disposable incomes are hit by fiscal drag pulling 3.2 million people into higher tax bands. Right-wing Tories are not impressed.

    Ranil Jayawardena, founder of the Conservative Growth Group of backbench MPs, described it in a statement as “an effective income tax rise,” which will be “a concern to many.”

    Net migration is set to rise to 245,000 a year by 2026-27, and will add more people to the labor force than all the measures intended to make it a “back to work” budget, according to the Whitehall’s fiscal watchdog, the Office for Budget Responsibility (OBR). The message is not one Conservative MPs want to hear.

    Already singled out by Labour’s Keir Starmer as a “huge giveaway to the wealthiest,” scrapping the lifetime allowance on pensions will cost £835 million a year by 2027-28 while benefiting less than 4 percent of workers. Conservative MPs reply that NHS doctors are one of the main groups to benefit. 

    Perhaps most worrying of all, the government’s own budget expects living standards to fall by 6 percent this year and next — less than the 7 percent fall predicted in November but still the largest two-year fall since records began in the 1950s.

    There are some problems that can’t be solved by pulling an all-nighter. Ironically for Sunak, whose career was made in the Treasury, his may prove to be the state of the U.K. economy. 

    Rosa Prince, Stefan Boscia and Dan Bloom contributed reporting.

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    Esther Webber, Eleni Courea and Emilio Casalicchio

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  • Fighter jets coming ASAP, Poland tells Ukraine

    Fighter jets coming ASAP, Poland tells Ukraine

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    Poland will deliver four Soviet-era MiG-29 fighter jets to Ukraine “in the next few days,” President Andrzej Duda said Thursday.

    Poland is the first country to formally commit to sending combat planes to Ukraine, which Kyiv says it urgently needs to repel the Russian invasion, which has become a brutal war of attrition in the eastern Donbas region.

    “We will be handing over four fully operational planes,” Duda said at a joint press conference with Czech President Petr Pavel, according to French newswire AFP.

    Additional planes which are “currently under maintenance” will be “handed over gradually,” Duda added, and Poland will replace the MiGs with American-made F-35s and South Korean FA-50 fighters.

    After convincing its Western allies to supply Ukraine with dozens of tanks following a months-long diplomatic marathon, Kyiv has been intensively lobbying its partners in recent weeks to send modern fighter jets.

    As he toured European capitals last month, Ukrainian President Volodymyr Zelenskyy made repeated pleas to the U.K. and France to provide modern jets to boost his country’s aging air force, which is mostly made up of Soviet-era planes.

    Yet, Kyiv’s allies have been wary of handing over the latest generation of combat planes, such as American F-16s, out of fear it would only serve to further escalate the conflict.

    So far, the U.K. has started training Ukrainian pilots as a “first step” toward sending jets, while the U.S. has welcomed two pilots on an American airbase to assess their flying skills, but will not let them operate American F-16s.

    Meanwhile, countries such as France and the Netherlands have expressed openness to the idea, but steered clear of making any formal commitments.

    The Polish government — one of Ukraine’s staunchest supporters since Russia launched its full-scale invasion in February 2022 — had already signaled its intention to send jets in recent days.

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    Nicolas Camut

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  • Australia, the UK and US are joining forces in the Pacific, but will nuclear subs arrive quick enough to counter China? | CNN

    Australia, the UK and US are joining forces in the Pacific, but will nuclear subs arrive quick enough to counter China? | CNN

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    Canberra, Australia
    CNN
     — 

    More than a year after the United States, the United Kingdom and Australia dropped the tightly held news they were combining submarine forces, the trio released more details Monday of their ambitious plan to counter China’s rapid military expansion.

    Under the multi-decade AUKUS deal, the partners will build a combined fleet of elite nuclear-powered submarines using technology, labor and funding from all three countries, creating a more formidable force in the Indo-Pacific than any of them could achieve alone.

    But the long timeline and huge financial costs – running into the hundreds of billions for Australia alone – poses questions about how far the partners’ plans could stray from their “optimal pathway” in the decades to come as governments, and potentially priorities, change.

    In a joint statement Monday, US President Joe Biden, Australian Prime Minister Anthony Albanese and UK counterpart Rishi Sunak said the “historic” deal will build on past efforts by all three countries to “sustain peace, stability, and prosperity around the world.”

    The plan begins this year with training rotations for Australian personnel on US and UK subs and bases in the expectation that in roughly 20 years, they’ll commandeer Australia’s first ever nuclear-powered fleet.

    But there’s a long way to go between now and then, as outlined in a series of phases announced by the leaders as they stood side-by-side in San Diego Harbor.

    From 2023, along with training Australians, US nuclear-powered subs will increase port visits to Australia, joined three years later by more visits from British-owned nuclear-powered subs.

    Come 2027, the US and UK subs will start rotations at HMAS Stirling, an Australian military port near Perth, Western Australia that’s set to receive a multibillion dollar upgrade.

    Then from the early 2030s, pending Congress approval, Australia will buy three Virginia-class submarines from the US, with an option to buy two more.

    Within the same decade, the UK plans to build its first AUKUS nuclear-powered submarine – combining its Astute-class submarine with US combat systems and weapons.

    Soon after, in the early 2040s, Australia will deliver the first of its homemade AUKUS subs to its Royal Navy.

    As a series of bullet points on the page, the plan seems straightforward.

    But the complexities involved are staggering and require an unprecedented level of investment and information sharing between the three partners, whose leaders’ political careers are set to be far shorter than those of the man they are working to counter: China’s Xi Jinping.

    Last week China’s political elite endorsed Xi’s unprecedented third term, solidifying his control and making him the longest-serving head of state of Communist China since its founding in 1949.

    The most assertive Chinese leader in a generation, Xi has expanded his country’s military forces and sought to extend Beijing’s influence far across the Indo-Pacific, rattling Western powers.

    Richard Dunley, from the University of New South Wales, said Australia was under pressure to respond after years of inaction and the proposal is an impressive scramble for a workable plan.

    “It’s a last roll of the dice. And they’ve managed to just about thread the eye of a needle coming up with something that looks plausible.”

    A rush of diplomacy took place before Monday’s announcement, partly to avoid the shock impact of the initial announcement in 2021, when French President Emmanuel Macron accused former Australian Prime Minister Scott Morrison of lying to him when he pulled out of a 90 billion Australian dollar deal to buy French subs.

    That deal would have delivered new submarines on a faster timeline, but they would have been conventional diesel-powered vessels instead of state of the art nuclear ones.

    Australia learned from that diplomatic row and its senior leaders – including Albanese – made around 60 calls to allies and regional neighbors to inform them of the plan before it was announced, according to Australian Defense Minister Richard Marles.

    China wasn’t one of them.

    Biden told reporters Monday that he plans to speak with Xi soon but declined to say when that would be, adding that he was not concerned Xi would see the AUKUS announcement as aggression.

    That contrasts with the sentiment emerging from Beijing including its accusations the trio is fomenting an arms race in Asia.

    At a daily briefing Monday, China’s Foreign Ministry spokesman Wang Wenbin said the AUKUS partners had “completely ignored the concerns of the international community and gone further down a wrong and dangerous road.”

    He said the deal would “stimulate an arms race, undermine the international nuclear non-proliferation system and damage regional peace and stability.”

    Peter Dean, director of Foreign Policy and Defense at the United States Studies Centre at the University of Sydney, said the Chinese claims are overblown.

    “If there is an arms race in the Indo-Pacific, there is only one country that is racing, and that is China,” he told CNN.

    The US will sell up to five Virginia-class nuclear-powered submarines to Australia.

    Smaller countries around the region are watching the AUKUS plan with concern that a greater presence in their waters could lead to unintended conflict, said Ristian Atriandi Supriyanto, from the Strategic & Defence Studies Centre at the Australian National University.

    “With more rotational presence of US and UK subs in Australia, there is a greater necessity for China to surveil these units and thereby, increase the likelihood of accidents or incidents at sea,” he said.

    Biden stressed Monday that he wanted “the world to understand” that the agreement was “talking about nuclear power not nuclear weapons.”

    According to a White House fact sheet, the US and UK will give Australian nuclear material in sealed “welded power units” that will not require refueling. Australia has committed to disposing of nuclear waste in Australia on defense-owned land. But that won’t happen until at least the late 2050s, when the Virginia-class vessels are retired.

    Australia says it doesn’t have the capability to enrich it to weapons grade, won’t acquire it and wants to abide by International Atomic Energy Agency (IAEA) principles on non-proliferation.

    The AUKUS plan is an admission by Australia that without submarines that can spend long periods of time at great depths, the country is woefully unprepared to counter China in the Indo-Pacific.

    “It is hugely complex and hugely risky,” said Dunley from the University of New South Wales.

    “But when the original announcement and decision was made in 2021, there were very few good options left for Australia. So I think they’ve come out as well as they could have done,” he added.

    Multiple challenge are posed by a project of this scale, which includes many moving parts with potential knock-on effects to the timeline and cost.

    The deal involves upgrades to ports and fleets, including expanding the operational life of Australia’s Collins-class submarines to the 2040s, to aid in the transition to nuclear.

    “You’re having to take submarines out for quite a significant chunk of time to refit them, and if there are delays or issues that could cascade and you could see issues where Australia actually doesn’t have enough submariners to maintain its current forces of mariners, let alone augment that,” Dunley said.

    As all three countries race to expand their fleets, training enough staff could become a serious challenge, Dunley said.

    The security element of the roles mean the pool of skilled workers is inevitably shallow. Efforts are being made in all countries to entice trainees to a life below the surface of the sea for months at a time – potentially not an easy sell in a competitive jobs market.

    And then there’s the funding.

    The Australian government says it’ll find 0.15% of gross domestic product every year for 30 years – a cost of up to $245 billion (368 billion Australian dollars).

    Max Bergmann, the director of the Europe Program at the Center for Strategic and International Studies, said the deal will ultimately require healthy economies, and all three countries are dealing with cost of living pressures.

    “The UK economy is not doing great. And part of what it will need is a thriving economy, such that it can maintain the level of spending needed,” he told a reporter briefing.

    Xi’s move to allow himself to retain the Chinese leadership for life means he could be approaching his 90s by the time Australia and Britain have launched their new AUKUS fleets.

    By then, the landscape of the Indo-Pacific could be vastly changed.

    Xi, 69, has made it clear that the issue of Taiwan, an island democracy that China’s Communist Party claims but has never ruled, cannot be passed indefinitely down to other generations.

    For now, Australia says it is confident of continued bipartisan support in Washington for program, which will rely on the ongoing transfer of nuclear material and other weapons secrets from the US.

    “We enter this with a high degree of confidence,” Defense Minister Marles said Monday.

    However the risk remains that in future years an inward-facing US leader in the style of former President Donald Trump – or even perhaps Trump himself – could emerge to threaten the deal.

    Charles Edel, senior adviser at the Center for Strategic and International Studies, said the deal was about much more than a combined effort to change China’s calculations about its security environment.

    “It’s meant to transform the industrial shipbuilding capacity of all three nations, it’s meant as a technological accelerator, it’s meant to change the balance of power in the Indo-Pacific, and, ultimately, it’s meant to change the model of how the United States works with and empowers its closest allies.”

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  • Biden says he intends to visit Northern Ireland | CNN Politics

    Biden says he intends to visit Northern Ireland | CNN Politics

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    CNN
     — 

    President Joe Biden said Monday he intends to visit Northern Ireland to mark the upcoming anniversary of the Good Friday Agreement, which the US helped broker a quarter-century ago to bring an end to decades of sectarian violence.

    The president was responding to an invitation from Britain’s Prime Minister Rishi Sunak, who was visiting California to announce a new agreement with Australia and the United States to cooperate on building nuclear-powered submarines.

    “I know that’s something very special and personal to you and we would love to have you over,” Sunak told Biden, extending the invitation to visit Northern Ireland in person.

    “It’s my intention to go to Northern Ireland and the Republic,” Biden said afterward.

    A presidential visit to Northern Ireland to mark the 25th anniversary of the landmark Good Friday accord has long been the subject of speculation. The last US president to visit Belfast was Barack Obama in 2013.

    For Biden, a visit to Ireland will mark a symbolic return for a president who often makes reference to his Irish roots, sometimes quoting lines of verse from William Butler Yeats or Seamus Heaney in his speeches.

    It’s also a moment to celebrate one of the defining diplomatic achievements of the late 20th century, one that came with significant American involvement that Biden watched unfold as a senator. Former US Sen. George Mitchell helped deliver the agreement that helped end decades of sectarian violence known as The Troubles.

    “Twenty-five years? It seems like yesterday,” Biden told Sunak on Monday.

    Officials said it was likely that former President Bill Clinton and former first lady Hillary Clinton would also take part in events surrounding the anniversary next month.

    As the anniversary approached, it remained unclear whether Biden would ultimately decide to travel to Northern Ireland, particularly as the fragile peace was tested by a dispute over post-Brexit trade rules on the island.

    Biden had taken a keen interest in the discussions, and had pressed Sunak to come to an agreement by the 25th anniversary of the Good Friday Agreement. Last month, Britain announced it had reached an agreement with the European Union, ending the long-simmering disagreements.

    The new rules could go far in improving ties between Biden and Sunak. Biden made a personal appeal both to Sunak and his two predecessors, Boris Johnson and Liz Truss, to resolve the dispute over the trade rules.

    US officials have said previously that a presidential visit to mark the anniversary would hinge in part on resolving the trade dispute. Biden has also pushed for a restoration of Northern Ireland’s power-sharing government, which collapsed in part due to disagreements over the trade rules.

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  • Bank stocks dive as Wall Street trembles amid SVB failure

    Bank stocks dive as Wall Street trembles amid SVB failure

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    Bank stocks fell Monday on worries about what may be next to topple following the second- and third-largest bank failures in U.S. history. But much of the rest of the market rose on hopes the bloodletting will force the Federal Reserve to take it easier on its economy-rattling hikes to interest rates.

    The S&P 500 dipped 6 points, or 0.2%, after whipsaw trading, where it careened from an early loss of 1.4% to a midday gain of nearly that much. The Dow Jones Industrial Average fell 90 points, or 0.3%, while the Nasdaq composite rose 0.4%.

    The sharpest drops were again coming from banks and other financial companies. Investors are worried that a relentless rise in interest rates meant to get inflation under control are approaching a tipping point and may be cracking the banking system.

    The broader market was holding up better as expectations built that the all the chaos means the Fed would have to take it easier on its economy-rattling hikes to interest rates. 


    President Biden hints at new banking regulation after Silicon Valley Bank collapse

    07:09

    Government response

    The U.S. government announced a plan late Sunday meant to shore up the banking industry following the collapses of Silicon Valley Bank and Signature Bank since Friday.

    President Biden on Monday sought to reassure Americans that they can have confidence in the U.S. banking system following the collapse of Silicon Valley Bank and quell any concerns about the fallout from its abrupt failure.

    “Americans can have confidence that the banking system is safe,” Mr. Biden said in brief remarks from the White House. “Your deposits will be there when you need them. Small businesses across the country that deposit accounts at these banks can breathe easier knowing they’ll be able to pay their workers and pay their bills, and their hard-working employees can breathe easier as well.”

    The most pressure is on the regional banks one or two steps below in size of the massive, “too-big-to-fail” banks that helped take down the economy in 2007 and 2008. Shares of First Republic plunged 66.3%, even after the bank said Sunday it had strengthened its finances with cash from the Federal Reserve and JPMorgan Chase.

    Huge banks, which have been repeatedly stress-tested by regulators following the 2008 financial crisis, weren’t down as much. JPMorgan Chase fell 1.8%, and Bank of America dropped 5.8%.

    “So far, it seems that the potential problem banks are few, and importantly do not extend to the so-called systemically important banks,” analysts at ING said.

    Trading halted at some regional banks

    The stocks of other regional banks also took a hit Monday, including Zions, Pacific West and Western Alliance. More than a dozen regional banks had their trading halted Monday after prices continued to free fall following the seizure by regulators of Silicon Valley Bank (SVB) and New York’s Signature Bank.

    Analysts at Bank of America said they “expect regional bank stock volatility to remain challenging in the short run as investors recalibrate the risk-reward” in the coming days. 

    “The events of the last few days are likely to worsen the funding cost pressure that the industry was already facing,” they said in a report. “No bank is immune, but this pressure will likely be most pronounced among banks with a larger mix of rate sensitive customers.”

    Regional lenders that saw falling stock prices Monday are unlikely to collapse the way SVB did because “most large and regional banks have much more diversified deposit bases,” Solita Marcelli, the chief investment officer at UBS, said in a research note. 


    Yellen rules out bailout for Silicon Valley Bank: “We’re not going to do that again”

    06:21

    Among the few investments to climb in price was gold, as investors looked for anything that seemed safe. It rose 2.3% to $1,910.50 per ounce.

    Prices for Treasurys also shot higher on both demand for something safe and expectations for an easier Fed. That in turn sent their yields lower, and the yield on the 10-year Treasury plunged to 3.51% from 3.70% late Friday. That’s a major move for the bond market. It was above 4% earlier this month.

    The two-year yield, which moves more on expectations for the Fed, had an even more breathtaking drop. It fell to 4.12% from 4.59% Friday.

    Call for emergency rate cuts

    Some investors are calling for the Fed to make emergency cuts to interest rates soon to stanch the bleeding. The wider expectation, though, is that the Fed will likely pause or slow its increases.

    Traders are betting on a nearly four-in-five chance that the Fed will hike its key overnight interest rate by 0.25 percentage points later this month at its next meeting. They’re also now betting on a 21% chance that it will hold steady, according to CME Group.


    Feds take action after Silicon Valley Bank and Signature Bank fail

    04:51

    That’s a sharp turnaround from earlier last week, when many traders were betting on the Fed reaccelerating its hikes and increasing by 0.50 percentage points because of how stubbornly sticky high inflation has been.

    “At this point in time, depending on reactions in financial markets and eventual fallout on the overall economy, we wouldn’t rule out that the hiking cycle could even be over and that the next move by Fed officials may be lower not higher,” said Kevin Cummins, chief U.S. economist at NatWest.

    Fears of Fed-induced recession

    Higher interest rates can drag down inflation by slowing the economy, but they raise the risk of a recession later on. They also hit prices for stocks, as well as bonds already sitting in investors’ portfolios.

    That latter effect is one of the reasons for the worries about the banking system. The Fed began hiking interest rates almost exactly a year ago, and it’s instituted the sharpest flurry in decades. Its key overnight rate is now at a range of 4.50% to 4.75%, up from virtually zero.

    That has hurt the investment portfolios of banks, which often park their cash in Treasurys because they’re considered among the safest investments on Earth.

    Global impact

    The collapse of Silicon Valley Bank has reverberated around the world.

    In London, the government arranged the sale of Silicon Valley Bank UK Ltd., the California bank’s British arm, for the nominal sum of one British pound, or roughly $1.20.

    While the bank is small, with less than 0.2% of U.K. bank deposits according to central bank statistics, it had a large role in financing technology and biotech startups that the British government is counting on to fuel economic growth.

    Germany’s financial regulator, BaFin, on Monday prohibited asset disposals and payments by Silicon Valley Bank’s German branch and imposed a moratorium, effectively shutting it for dealings with customers.


    Reverberations felt worldwide after SVB failure

    02:42

    The U.S. Treasury Department, Federal Reserve and Federal Deposit Insurance Corp. said Sunday that all Silicon Valley Bank clients will be protected and have access to their funds and announced steps designed to protect the bank’s customers and prevent more bank runs.

    “Not the end of the world”

    “This situation is something to keep an eye on, but it is not the start of the next financial crisis,” Brad McMillan, chief investment officer for Commonwealth Financial Network said in a note, pointing to the government’s swift and aggressive action. 

    “While we can certainly expect market turbulence—and we are seeing it this morning—the systemic effects will be limited,” he said. “We are not set for a rerun of the Great Financial Crisis. This is not the end of the world.”

    Bank industry analysts also expressed confidence that the banking system as a whole is safe. 

    “We believe the events should not have significant broader implications for the economy and are not a sign of systemic risks to the banking sector,” John Canavan, lead analyst at Oxford Economics, told investors in a report on Monday.

    Regulators on Friday closed Silicon Valley Bank as investors withdrew billions of dollars from the bank in a matter of hours, marking the second-largest U.S. bank failure behind the 2008 failure of Washington Mutual. They also announced Sunday that New York-based Signature Bank was being seized after it became the third-largest bank to fail in U.S. history.

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  • China looms large as Biden makes submarine moves with UK, Australia | CNN Politics

    China looms large as Biden makes submarine moves with UK, Australia | CNN Politics

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    San Diego
    CNN
     — 

    President Joe Biden was flanked on Monday by a 377-foot submarine – the USS Missouri – as he announced an accelerated timeline for Australia to receive its own nuclear-powered submarines early next decade.

    But looming much larger was the increasingly tense US relationship with China, which has emerged as a central focus of Biden’s presidency. That relationship has been magnified in recent weeks by a slew of global events, from the dramatic downing of a Chinese spy balloon to the revelation that Beijing is considering arming Russia – all taking place amid Chinese President Xi Jinping’s unprecedented consolidation of power and a growing bipartisan consensus in Washington about the risks China poses.

    US officials readily acknowledge that tensions with China are higher than they have been in recent years and that Beijing’s heated public rhetoric of late is reflective of the state of private relations. It’s why Biden’s multi-pronged China strategy has involved a bid to normalize diplomatic relations even as the US pursues policies like Monday’s submarine announcement designed to counter China’s global influence and its military movements.

    “Today, as we stand at the inflection point in history, where the hard work of enhancing deterrence and promoting stability is going to affect the prospects of peace for decades to come, the United States can ask for no better partners in the Indo-Pacific, where so much of our shared future will be written,” Biden said Monday, standing alongside his Australian and British counterparts.

    The effort to re-open lines of communication with China, especially between each country’s top military brass following the spy balloon incident, has shown no signs of progress, according to a senior administration official.

    “Quite the contrary, China appears resistant at this juncture to actually move forward in establishing those dialogues and mechanisms,” the official said. “What we need are the appropriate mechanisms between senior government officials, between the military, between the various crisis managers on both sides to be able to communicate when there is something that is either accidental or just misinterpreted.”

    Against that backdrop, Biden faces a series of decisions over the coming weeks and months that have the potential to exacerbate tensions further, including placing new curbs on investments by American companies in China and restricting or blocking the US operations of the popular social media platform TikTok, which is owned by a Chinese company. And in Beijing, Chinese officials must soon decide whether to flaunt US warnings and begin providing lethal weaponry to Russia in its war in Ukraine.

    Monday’s update on the new three-way defense partnership between the US, Australia and the United Kingdom is the latest step meant to counter China’s attempts at naval dominance in the Indo-Pacific and, potentially, its designs on invading self-governing Taiwan. Australia will now receive its first of at least three advanced submarines early next decade, faster than predicted when the AUKUS partnership launched 18 months ago, and US submarines like the USS Missouri will rotate through Australian ports in the meantime.

    “The United States has safeguarded stability in Indo-Pacific for decades, to the enormous benefits of nations throughout the region from ASEAN to Pacific Islanders to the People’s Republic of China,” Biden said during his remarks. “In fact, our leadership in the Pacific has been the benefit to the entire world. We’ve kept the sea lanes and skies open and navigable for all. We’ve upheld basic rules of the road.”

    His British counterpart was more explicit, naming China as a cause for concern.

    “China’s growing assertiveness, the destabilizing behavior of Iran and North Korea all threaten to create a world defined by danger, disorder and division,” said Prime Minister Rishi Sunak. “Faced with this new reality, it is more important than ever, that we strengthen the resilience of our own countries.”

    Even before Biden traveled to Naval Base Point Loma in California to herald that progress alongside the British and Australian prime ministers, China was quick to lambast the move as advancing a “Cold War mentality and zero-sum games.”

    That China did not wait for the announcement itself to lash out is a sign of just how closely Beijing is watching Biden’s moves in the Pacific, where the US military is expanding its presence and helping other nations modernize their fleets.

    And it’s another example of Biden’s view of China as the leading long-term threat to global peace and stability, even as Russia’s war in Ukraine consumes current US diplomatic and military attention.

    The first shipment, due in 2032, will be of three American Virginia-class attack submarines, which are designed to employ a number of different weapons, including torpedoes and cruise missiles. The subs can also carry special operations forces and carry out intelligence and reconnaissance missions.

    That will be followed in the 2040s by British-designed submarines, containing American technology, that will transform Australia’s underwater capabilities over the course of the next 25 years.

    Before then, US submarines will rotationally deploy to Australia to begin training Australian crews on the advanced technology, scaling up American defense posture in the region.

    The submarines will not carry nuclear weapons and US, Australian and British officials have insisted the plans are consistent with international non-proliferation rules, despite Chinese protestations.

    The message sent by the announcement is unmistakable: The US and its allies view China’s burgeoning naval ambitions as a top threat to their security, and are preparing for a long-term struggle. Already this year, the US announced it was expanding its military presence in the Philippines and welcomed moves by Japan to strengthen its military.

    “It’s deeply consequential,” a senior administration official said of the AUKUS partnership. “The Chinese know that, they recognize it and they’ll want to engage accordingly.”

    US officials said Britain’s participation in the new submarine project is a sign of Europe’s growing concerns about tensions in the Pacific – concerns that have emerged within NATO, even as the alliance remains consumed by the war in Ukraine. And in conversations with European leaders over the past month, including European Commission President Ursula von der Leyen on Friday, Biden has raised the issue of China in the hopes of developing a coordinated approach.

    The looming question now is whether China will choose to reengage and improve diplomatic relations with the US despite the heightened tensions.

    Successive phone calls and a November face-to-face meeting with Xi have so far yielded only halting progress in establishing what administration officials describe as a “floor” in the relationship.

    Four months after that meeting, progress has largely stalled on reopening lines of communication between Washington and Beijing, once viewed as the primary takeaway from the three-hour session in Bali. Speaking to CNN in late February, Defense Secretary Lloyd Austin said it had been months since he’d spoken to his Chinese counterpart.

    And public remarks from Chinese leaders, including Xi, have begun to sharpen over the past week, a sign the confrontational approach of the past year is not waning.

    Biden and his advisers have largely downplayed the new, sharp tone emanating from Beijing. Asked by CNN on Thursday about the meaning of new rebukes from Xi and Foreign Minister Qin Gang, Biden replied flatly: “Not much.”

    On Monday, US national security adviser Jake Sullivan said a conversation between Biden and Xi would likely occur now that China’s National People’s Congress has concluded and a slate of Chinese officials take up their new positions following the rubber-stamp parliament’s annual meeting.

    “We have said that when the National People’s Congress comes to a close, as it now has, and Chinese leadership returns to Beijing, and then all of these new officials take their new seats, because of course you now have a new set of figures in substantial leadership positions, we would expect President Biden and President Xi to have a conversation. So at some point in the coming period,” Sullivan told reporters aboard Air Force One.

    He said there was no date set yet for a Xi-Biden phone call, but that Biden “has indicated his willingness to have a telephone conversation with President Xi once they’re back in stride coming off the National People’s Congress.”

    Tensions appeared to hit a new level last week after Xi directly rebuked US policy as “all-round containment, encirclement and suppression against us.” Qin, in remarks the next day, defined the “competition” Biden has long sought to frame as central to the relationship between the two powers as “a reckless gamble.”

    “If the United States does not hit the brakes but continues to speed down the wrong path, no amount of guardrails can prevent derailing, and there will surely be conflict and confrontation,” Qin said.

    A senior administration official acknowledged that Xi’s recent rhetoric has been “more direct” than in the past, but said the White House continues to believe that Xi “will again want to sit down and engage at the highest level” now that he has completed his latest consolidation of power.

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  • Biden announces deal to sell nuclear-powered submarines to Australia

    Biden announces deal to sell nuclear-powered submarines to Australia

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    President Biden and the leaders of two close U.S. allies formally announced Monday that Australia will purchase nuclear-powered attack submarines from the U.S. to modernize its fleet amid growing concern about China’s influence in the Indo-Pacific region.

    Mr. Biden flew to San Diego for talks with Australian Prime Minister Anthony Albanese and British Prime Minister Rishi Sunak on an 18-month-old nuclear partnership given the acronym AUKUS. The three leaders delivered remarks from Naval Base Point Loma at the entry of San Diego Bay, flanked by U.S. sailors with the USS Sterett destroyer in the background. 

    “Today, as we stand at an inflection point in history, where the where the hard work of advancing deterrence and promoting stability is going to affect the prospect of peace for decades to come, the United States can ask for no better partner in the Indo-Pacific, where so much of our shared future will be written,” Mr. Biden said.

    The partnership between the three nations, announced in 2021, enabled Australia to access nuclear-powered submarines, which are stealthier and more capable than conventionally powered vessels, as a counterweight to China’s military buildup.

    Australia is buying up to five Virginia-class boats as part of AUKUS. A future generation of submarines will be built in the U.K. and in Australia with U.S. technology and support. The U.S. would also step up its port visits in Australia to provide the country with more familiarity with the nuclear-powered technology before it has such subs of its own.

    President Biden, Australian Prime Minister Anthony Albanese and British Prime Minister Rishi Sunak deliver remarks after the AUKUS summit at Naval Base Point Loma in San Diego, California, on March 13, 2023.
    President Biden, Australian Prime Minister Anthony Albanese and British Prime Minister Rishi Sunak deliver remarks after the AUKUS summit at Naval Base Point Loma in San Diego, California, on March 13, 2023.

    LEAH MILLIS / REUTERS


    In a statement before their meeting, the leaders said their countries have worked for decades to sustain peace, stability and prosperity around the globe, including in the Indo-Pacific.

    “We believe in a world that protects freedom and respects human rights, the rule of law, the independence of sovereign states, and the rules-based international order,” they said in the statement, released before their joint appearance.

    “The steps we are announcing today will help us to advance these mutually beneficial objectives in the decades to come,” they said.

    San Diego is Mr. Biden’s first stop on a three-day trip to California and Nevada. He will discuss gun violence prevention in the community of Monterey Park, California, and his plans to lower prescription drug costs in Las Vegas. The trip will include fundraising stops as he steps up his political activities before an expected announcement next month that he will seek reelection in 2024.

    Mr. Biden was also set to meet individually with Albanese and Sunak, an opportunity to coordinate strategy on Russia’s war in Ukraine, the global economy and more.

    The secretly brokered AUKUS deal included the Australian government’s cancellation of a $66 billion contract for a French-built fleet of conventional submarines, which sparked a diplomatic row within the Western alliance that took months to mend.

    China has argued that the AUKUS deal violates the Nuclear Non-Proliferation Treaty. It contends that the transfer of nuclear weapons materials from a nuclear-weapon state to a non-nuclear-weapon state is a “blatant” violation of the spirit of the pact. Australian officials have pushed back against the criticism, arguing that they are working to acquire nuclear-powered, not nuclear-armed, submarines.

    Mr. Biden emphasized that the submarines “will not have any nuclear weapons of any kind on them,” and said the three leaders are “deeply committed to strengthening nuclear non-proliferation regime.”

    “The question is really how does China choose to respond because Australia is not backing away from what it — what it sees to be doing in its own interests here,” said Charles Edel, a senior adviser and Australia chair at the Center for Strategic and International Studies. “I think that probably from Beijing’s perspective they’ve already counted out Australia as a wooable mid country. It seemed to have fully gone into the U.S. camp.”

    Before he departed for California, Mr. Biden spoke about steps the administration is taking to safeguard depositors and protect against broader economic hardship after the second- and third-largest bank failures in U.S. history.

    The president said the nation’s financial systems are safe. He said he’d seek to hold accountable those responsible for the bank failures, called for better oversight and regulation of larger banks and promised that taxpayers would not pay the bill for any losses.

    The president’s daughter Ashley Biden and granddaughter Natalie Biden also traveled with him to San Diego.

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  • What are the implications of the Gary Lineker-BBC dispute?

    What are the implications of the Gary Lineker-BBC dispute?

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    From: Inside Story

    How are broadcasters handling staff sharing opinions online?

    The BBC has reversed its suspension of presenter Gary Lineker following a weekend of chaos at the broadcaster.

    Lineker was initially suspended after he described the government’s migration plan as “immeasurably cruel” and said the government’s language was “not dissimilar to that used by Germany in the 30s”.

    The BBC reinstated Lineker following a major backlash over the decision to remove him for sharing a political opinion.

    The BBC has promised to hold a review of its own guidelines, amid questions over impartiality and political influence.

    Presenter: Mohammed Jamjoom

    Guests:

    Aidan White – Founder of Ethical Journalism Network.

    Qays Sediqi – Former refugee and human rights lawyer specialising in immigration and asylum law

    Steven Barnett – Professor of communications at the University of Westminster

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  • Bank stocks dive as Wall Street trembles amid SVB failure

    Bank stocks dive as Wall Street trembles amid SVB failure

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    Bank stocks are continuing to drop Monday as Wall Street worries about what may be next to topple following the second- and third-largest bank failures in U.S. history. But much of the rest of the market is rising on hopes the fear will force the Federal Reserve to take it easier on its economy-rattling hikes to interest rates.

    The S&P 500 was up 16 points, or 0.4%, at 3,877 in midday trading after charging back from an early drop of 1.4%. The Dow Jones Industrial Average was up 95 points, or 0.3%, at 32,005, as of 12:42 a.m. EST, while the Nasdaq composite was 1.1% higher.

    The sharpest drops were again coming from banks and other financial companies. Investors are worried that a relentless rise in interest rates meant to get inflation under control are approaching a tipping point and may be cracking the banking system.

    The broader market was holding up better as expectations built that the all the chaos means the Fed would have to take it easier on its economy-rattling hikes to interest rates. 


    President Biden hints at new banking regulation after Silicon Valley Bank collapse

    07:09

    Government response

    The U.S. government announced a plan late Sunday meant to shore up the banking industry following the collapses of Silicon Valley Bank and Signature Bank since Friday.

    President Biden on Monday sought to reassure Americans that they can have confidence in the U.S. banking system following the collapse of Silicon Valley Bank and quell any concerns about the fallout from its abrupt failure.

    “Americans can have confidence that the banking system is safe,” Mr. Biden said in brief remarks from the White House. “Your deposits will be there when you need them. Small businesses across the country that deposit accounts at these banks can breathe easier knowing they’ll be able to pay their workers and pay their bills, and their hard-working employees can breathe easier as well.”

    The most pressure is on the regional banks one or two steps below in size of the massive, “too-big-to-fail” banks that helped take down the economy in 2007 and 2008. Shares of First Republic plunged 66.3%, even after the bank said Sunday it had strengthened its finances with cash from the Federal Reserve and JPMorgan Chase.

    Trading halted at some regional banks

    The stocks of other regional banks also took a hit Monday, including Zions, Pacific West and Western Alliance. More than a dozen regional banks had their trading halted Monday after prices continued to free fall following the seizure by regulators of Silicon Valley Bank (SVB) and New York’s Signature Bank.

    Analysts at Bank of America said they “expect regional bank stock volatility to remain challenging in the short run as investors recalibrate the risk-reward” in the coming days. 

    “The events of the last few days are likely to worsen the funding cost pressure that the industry was already facing,” they said in a report. “No bank is immune, but this pressure will likely be most pronounced among banks with a larger mix of rate sensitive customers.”

    Regional lenders that saw falling stock prices Monday are unlikely to collapse the way SVB did because “most large and regional banks have much more diversified deposit bases,” Solita Marcelli, the chief investment officer at UBS, said in a research note. 


    Yellen rules out bailout for Silicon Valley Bank: “We’re not going to do that again”

    06:21

    Among the few investments to climb in price was gold, as investors looked for anything that seemed safe. It rose 2.3% to $1,910.50 per ounce.

    Prices for Treasurys also shot higher on both demand for something safe and expectations for an easier Fed. That in turn sent their yields lower, and the yield on the 10-year Treasury plunged to 3.51% from 3.70% late Friday. That’s a major move for the bond market. It was above 4% earlier this month.

    The two-year yield, which moves more on expectations for the Fed, had an even more breathtaking drop. It fell to 4.12% from 4.59% Friday.

    Call for emergency rate cuts

    Some investors are calling for the Fed to make emergency cuts to interest rates soon to stanch the bleeding. The wider expectation, though, is that the Fed will likely pause or slow its increases.

    Traders are betting on a nearly four-in-five chance that the Fed will hike its key overnight interest rate by 0.25 percentage points later this month at its next meeting. They’re also now betting on a 21% chance that it will hold steady, according to CME Group.


    Feds take action after Silicon Valley Bank and Signature Bank fail

    04:51

    That’s a sharp turnaround from earlier last week, when many traders were betting on the Fed reaccelerating its hikes and increasing by 0.50 percentage points because of how stubbornly sticky high inflation has been.

    “At this point in time, depending on reactions in financial markets and eventual fallout on the overall economy, we wouldn’t rule out that the hiking cycle could even be over and that the next move by Fed officials may be lower not higher,” said Kevin Cummins, chief U.S. economist at NatWest.

    Fears of Fed-induced recession

    Higher interest rates can drag down inflation by slowing the economy, but they raise the risk of a recession later on. They also hit prices for stocks, as well as bonds already sitting in investors’ portfolios.

    That latter effect is one of the reasons for the worries about the banking system. The Fed began hiking interest rates almost exactly a year ago, and it’s instituted the sharpest flurry in decades. Its key overnight rate is now at a range of 4.50% to 4.75%, up from virtually zero.

    That has hurt the investment portfolios of banks, which often park their cash in Treasurys because they’re considered among the safest investments on Earth.

    Global impact

    The collapse of Silicon Valley Bank has reverberated around the world.

    In London, the government arranged the sale of Silicon Valley Bank UK Ltd., the California bank’s British arm, for the nominal sum of one British pound, or roughly $1.20.

    While the bank is small, with less than 0.2% of U.K. bank deposits according to central bank statistics, it had a large role in financing technology and biotech startups that the British government is counting on to fuel economic growth.

    Germany’s financial regulator, BaFin, on Monday prohibited asset disposals and payments by Silicon Valley Bank’s German branch and imposed a moratorium, effectively shutting it for dealings with customers.


    Reverberations felt worldwide after SVB failure

    02:42

    The U.S. Treasury Department, Federal Reserve and Federal Deposit Insurance Corp. said Sunday that all Silicon Valley Bank clients will be protected and have access to their funds and announced steps designed to protect the bank’s customers and prevent more bank runs.

    Regulators on Friday closed Silicon Valley Bank as investors withdrew billions of dollars from the bank in a matter of hours, marking the second-largest U.S. bank failure behind the 2008 failure of Washington Mutual. They also announced Sunday that New York-based Signature Bank was being seized after it became the third-largest bank to fail in U.S. history.

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  • Why Silicon Valley Bank collapsed and what it could mean | CNN Business

    Why Silicon Valley Bank collapsed and what it could mean | CNN Business

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    London
    CNN
     — 

    Silicon Valley Bank collapsed with astounding speed on Friday. Investors are now on edge about whether its demise could spark a broader banking meltdown.

    The US federal government has stepped in to guarantee customer deposits, but SVB’s downfall continues to reverberate across global financial markets. The government has also shut down Signature Bank, a regional bank that was teetering on the brink of collapse, and guaranteed its deposits.

    In a sign of how seriously officials are taking the SVB failure, US President Joe Biden told Americans Monday that they “can rest assured that our banking system is safe,” adding: “We will do whatever is needed on top of all this.”

    Here’s what you need to know about the biggest US bank failure since the global financial crisis.

    Established in 1983, Silicon Valley Bank was, just before collapsing, America’s 16th largest commercial bank. It provided banking services to nearly half of all US venture-backed technology and life science companies.

    It also has operations in Canada, China, Denmark, Germany, Ireland, Israel, Sweden and the United Kingdom.

    SVB benefited hugely from the tech sector’s explosive growth in recent years, fueled by ultra-low borrowing costs and a pandemic-induced boom in demand for digital services.

    The bank’s assets, which include loans, more than tripled from $71 billion at the end of 2019 to a peak of $220 billion at the end of March 2022, according to financial statements. Deposits ballooned from $62 billion to $198 billion over that period, as thousands of tech startups parked their cash at the lender. Its global headcount more than doubled.

    SVB’s collapse came suddenly, following a frenetic 48 hours during which customers yanked deposits from the lender in a classic run on the bank.

    But the root of its demise goes back several years. Like many other banks, SVB ploughed billions into US government bonds during the era of near-zero interest rates.

    What seemed like a safe bet quickly came unstuck, as the Federal Reserve hiked interest rates aggressively to tame inflation.

    When interest rates rise, bond prices fall, so the jump in rates eroded the value of SVB’s bond portfolio. The portfolio was yielding an average 1.79% return last week, far below the 10-year Treasury yield of around 3.9%, Reuters reported.

    At the same time, the Fed’s hiking spree sent borrowing costs higher, meaning tech startups had to channel more cash towards repaying debt. At the same time, they were struggling to raise new venture capital funding.

    That forced companies to draw down on deposits held by SVB to fund their operations and growth.

    While SVB’s problems can be traced back to its earlier investment decisions, the run on the bank was triggered Wednesday when the lender announced that it had sold a bunch of securities at a loss and would sell $2.25 billion in new shares to plug the hole in its finances.

    That set off panic among customers, who withdrew their money in large numbers.

    The bank’s stock plummeted 60% Thursday and dragged other bank shares down with it as investors began to fear a repeat of the global financial crisis a decade and a half ago.

    By Friday morning, trading in SVB shares was halted and it had abandoned efforts to raise capital or find a buyer. California regulators intervened, shutting the bank down and placing it in receivership under the Federal Deposit Insurance Corporation, which typically means liquidating the bank’s assets to pay back depositors and creditors.

    US regulators said Sunday that they would guarantee all SVB customers’ deposits. The move is aimed at preventing more bank runs and helping tech companies to continue paying staff and funding their operations.

    The intervention does not amount to a 2008-style bailout, however, which means investors in the company’s stock and bonds will not be protected.

    “Let me be clear that during the financial crisis, there were investors and owners of systemic large banks that were bailed out … and the reforms that have been put in place mean that we’re not going to do that again,” Treasury Secretary Janet Yellen told CBS in an interview Sunday.

    “But we are concerned about depositors and are focused on trying to meet their needs.”

    There are already some signs of stress at other banks. Trading in First Republic Bank

    (FRC)     and PacWest Bancorp

    (PACW)     was temporarily halted Monday after the shares plunged 65% and 52% respectively. Charles Schwab

    (SCHW)     stock was down 7% at 11.30 a.m. ET Monday.

    In Europe, the benchmark Stoxx Europe 600 Banks index, which tracks 42 big EU and UK banks, fell 5.6% in morning trade — notching its biggest fall since last March. Shares in embattled Swiss banking giant Credit Suisse were down 9%.

    SVB isn’t the only financial institution whose investments into government bonds and other assets have fallen dramatically in value.

    At the end of 2022, US banks were sitting on $620 billion in unrealized losses — assets that have decreased in price but haven’t been sold yet, according to the FDIC.

    In a sign that regulators have concerns about wider financial chaos, the Fed said Sunday that it would make additional funding available for eligible financial institutions to prevent the next SVB from collapsing.

    Most analysts point out that US and European banks have much stronger financial buffers now than during the global financial crisis. They also highlight that SVB had very heavy exposure to the tech sector, which has been particularly hard hit by rising interest rates.

    “While SVB is a major failure, [it] and other niche players like Signature are quite unique in the broader banking world,” research analysts David Covey, Adrian Cighi and Jaimin Shah at M&G Investments commented in a blog post on Monday. “So unique, in our view, that it is unlikely to create material problems for any of the large diversified banks in the US or Europe from a credit point of view.”

    HSBC stepped in Monday to buy SVB UK for £1 ($1.2), securing the deposits of thousands of British tech companies that hold money at the lender.

    Had a buyer not been found, SVB UK would have been placed into insolvency by the Bank of England, leaving customers with only deposits worth up to £85,000 ($100,000) — or £170,000 ($200,000) for joint accounts — guaranteed.

    The HSBC rescue is “fantastic news” for the UK startup ecosystem, said Piotr Pisarz, the CEO of Uncapped, a financial tech startup that lends to other startups. “I think we can all relax a bit today,” he told CNN.

    In a statement, HSBC CEO Noel Quinn said the acquisition “strengthens our commercial banking franchise and enhances our ability to serve innovative and fast-growing firms, including in the technology and life science sectors, in the UK and internationally.”

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  • BBC says Lineker to return to football show, abide by guidelines

    BBC says Lineker to return to football show, abide by guidelines

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    The hugely popular sports presenter had sparked a crisis at the public broadcaster after tweeting about UK asylum plans.

    Gary Lineker will return as presenter of the flagship BBC football show, Match of the Day, the broadcaster has said, ending a crisis sparked by his criticism of the UK government’s new asylum policy.

    “Gary is a valued part of the BBC and I know how much the BBC means to Gary, and I look forward to him presenting our coverage this coming weekend,” said BBC director-general Tim Davie on Monday.

    He added that the sports presenter had agreed to abide by the broadcaster’s editorial guidelines until a review of its social media rules had been completed.

    The former England footballer was removed after using Twitter to compare the language used to launch the new policy with the rhetoric of Nazi-era Germany.

    Fellow presenters, pundits and commentators then refused to work over the weekend in support, throwing the broadcaster’s sports coverage into disarray.

    Lineker tweeted on Monday: “I cannot wait to get back in the MOTD chair on Saturday.

    “However difficult the last few days have been, it simply doesn’t compare to having to flee your home from persecution or war to seek refuge in a land far away.”

    Davie apologised for the disruption to the service, saying he recognised the “potential confusion caused by the grey areas of the BBC’s social media guidance”.

    “Impartiality is important to the BBC. That is a difficult balancing act to get right where people are subject to different contracts and on air positions, and with different audience and social media profiles,” he said.

    An independent review of the guidance will be conducted, including how it applies to freelancers such as Lineker, he added.

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  • HSBC is buying SVB’s UK business for just over $1 | CNN Business

    HSBC is buying SVB’s UK business for just over $1 | CNN Business

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    Hong Kong/London
    CNN
     — 

    HSBC has scooped up the UK arm of Silicon Valley Bank for £1 ($1.2), just days after its business in the United States collapsed in stunning fashion.

    SVB UK would have been placed into insolvency by the Bank of England following the failure of its parent, had a buyer not been found.

    In a statement, the Bank of England said it “can confirm that all depositors’ money with SVB UK is safe and secure as a result of this transaction.”

    Europe’s biggest bank announced the acquisition early Monday morning, saying the deal would be effective “immediately.”

    In a statement, HSBC CEO Noel Quinn said the deal means that “SVB UK customers can continue to bank as usual, safe in the knowledge that their deposits are backed by the strength, safety and security of HSBC.”

    “This acquisition makes excellent strategic sense for our business in the UK,” he said. “It strengthens our commercial banking franchise and enhances our ability to serve innovative and fast-growing firms, including in the technology and life-science sectors, in the UK and internationally.”

    As of last Friday, SVB UK had loans of approximately £5.5 billion ($6.7 billion) and deposits of around £6.7 billion ($8.1 billion), according to the statement. It also logged a pretax profit of £88 million ($106.5 million) in its last fiscal year ended December.

    SVB, a lender best known for providing financing to startups, had faced liquidity concerns in the United States, triggering a huge bank run last week. That ultimately led to its collapse, the second-biggest of a financial institution in US history, on Friday.

    US financial regulators reacted swiftly to concerns of contagion over the weekend, announcing that customers of the failed bank would get access to all their money starting Monday.

    Authorities have also guaranteed deposits for customers of Signature Bank, a regional US lender shut down by regulators because it had faced financial trouble in recent days.

    — This is a developing story and will be updated.

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  • BBC’s flagship soccer show boycotted over Gary Lineker impartiality row | CNN

    BBC’s flagship soccer show boycotted over Gary Lineker impartiality row | CNN

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    CNN
     — 

    The BBC’s weekend soccer coverage has been plunged into chaos following its announcement Gary Lineker would “step back” from presenting, after he became embroiled in an impartiality row when he criticized British government policy on Twitter.

    The broadcaster now faces a boycott from pundits, presenters and even players of its flagship soccer show “Match of the Day,” while other soccer programs – Football Focus and Final Score – and some radio programming have been forced off-air as a result of the furore.

    Lineker criticized the government’s controversial new asylum-seeker policy on Tuesday and was subsequently relieved of his presenting duties this week since the BBC said his tweets breached their guidelines, specifically its commitment to “due impartiality.”

    The BBC’s decision has sparked controversy, leaving the organization under fire from opposition politicians, the Broadcasting Entertainment Communications and Theatre Union who represent BBC staff, and its former director general Greg Dyke.

    “The BBC will only be able to bring limited sport programming this weekend and our schedules will be updated to reflect that,” a BBC spokesperson said in a statement Saturday.

    “We are sorry for these changes which we recognize will be disappointing for BBC sport fans.

    “We are working hard to resolve the situation and hope to do so soon.”

    In an interview with BBC News on Saturday, the broadcaster’s Director General Tim Davie was asked if he should resign over the crisis. He said he would not.

    “I honestly do not believe, despite a lot of the commentary, that this is about left or right,” Davie said. The BBC is a “fierce champion of democratic debate, free speech, but with that comes the need to create an impartial organization,” he added.

    When asked if he was sorry about the way he handled the situation, he said: “We made decisions, and I made decisions based on a real passion about what the BBC is and it is difficult – it’s this balance between free speech and impartiality.”

    On Tuesday, Lineker tweeted “Good heavens, this is beyond awful” to a video posted on Twitter by the British Home Office announcing the new proposed policy – an attempt to stop migrant boats crossing the English Channel from France which has been criticized by the United Nations and other global bodies.

    He added: “There is no huge influx. We take far fewer refugees than other major European countries. This is just an immeasurably cruel policy directed at the most vulnerable people in language that is not dissimilar to that used by Germany in the 30s, and I’m out of order?”

    As Britain’s public broadcaster, the BBC is bound by “due impartiality” – a much debated term which the organization defines as holding “power to account with consistency” while not “allowing ourselves to be used to campaign to change public policy.”

    On Friday, the BBC announced Lineker would “step back from presenting Match of the Day until we’ve got an agreed and clear position on his use of social media,” adding it considered his recent social media activity to breach its guidelines.

    In response, first pundits, then commentators, and then even Premier League teams announced their intention to boycott the show in support of Lineker.

    BBC commentators Steve Wilson, Conor McNamara, Robyn Cowen and Steven Wyeth said in a joint statement issued late on Friday “in the circumstances, we do not feel it would be appropriate to take part in the programme.”

    A shortened version of the program did eventually air on Saturday. It opened with a BBC continuity announcer issuing an apology, instead of the usual title sequence and theme tune.

    It then showed highlights from Saturday’s English Premier League games with no commentary, only the background audio from the stadiums.

    The show aired for 20 minutes, an hour less than the originally scheduled time.

    Jermain Defoe, a former England striker, announced Saturday he would not appear as a pundit on the Sunday show.

    “It’s always such a privilege to work with BBC MOTD. But tomorrow I have taken the decision to stand down from my punditry duties. @GaryLineker,” Defoe tweeted.

    Defoe’s announcement appears to be the first sign the British broadcaster’s Sunday television programming will also be affected.

    Meanwhile, the Professional Footballers’ Association announced on Saturday “players involved in today’s games will not be asked to participate in interviews with Match of the Day.”

    “The PFA have been speaking to members who wanted to take a collective position and to be able to show their support for those who have chosen not to be part of tonight’s programme,” the statement added.

    “During those conversations we made clear that, as their union, we would support all members who might face consequences for choosing not to complete their broadcast commitments. This is a common sense decision that ensures players won’t now be put in that position.”

    Following his side’s 1-0 defeat against Bournemouth on Saturday, Liverpool manager Jurgen Klopp was asked about the BBC issue.

    “I cannot see any reason why they would ask anyone to step back for saying that. I’m not sure if that’s a language issue or not,” the German told reporters.

    “If I understand it right, then this is about an opinion about human rights and that should be possible to say.

    “What I don’t understand is why everybody goes on Twitter and says something. I don’t understand the social media part of it but that’s probably [because] I’m too old for that.”

    The BBC’s former director general Greg Dyke said the broadcaster has “undermined its own credibility” by suspending Lineker because it seemed like it had “bowed to government pressure.”

    Keir Starmer, leader of the opposition Labour Party, said the BBC had got “this one badly wrong and now they’re very, very exposed.”

    Scotland’s First Minister Nicola Sturgeon tweeted: “As a strong supporter of public service broadcasting, I want to be able to defend the BBC. But the decision to take Gary Lineker off air is indefensible. It is undermining free speech in the face of political pressure – & it does always seem to be rightwing pressure it caves to.”

    Opposition Labour Party deputy leader Angela Rayner also lambasted the BBC’s decision in a tweet on Saturday.

    “The BBC’s cowardly decision to take Gary Lineker off air is an assault on free speech in the face of political pressure from Tory politicians. They should rethink,” she tweeted.

    Meanwhile Nadine Dorries, an MP with the governing Conservative party and former Culture Secretary, welcomed the BBC’s decision, tweeting: “News that Gary Lineker has been stood down for investigation is welcome and shows BBC are serious about impartiality.

    “Gary is entitled to his views – free speech is paramount. Lots of non Public Service Broadcasters can accommodate him and his views and he would be better paid.”

    For his part, British Prime Minister Rishi Sunak on Saturday issued a statement saying he hopes the situation between the BBC and its star soccer host can be resolved but it is not a matter for the UK government.

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  • BBC sport coverage in disarray over Gary Lineker free speech row

    BBC sport coverage in disarray over Gary Lineker free speech row

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    The BBC’s sport service was plunged into chaos on Saturday as commentators refused to work in support of presenter Gary Lineker, who was suspended after he criticised the governmnet’s new migration policy.

    The 62-year-old compared the language used to launch the new policy to that of Nazi-era Germany on Twitter, which the BBC said on Friday was a “breach of our guidelines”.

    The broadcaster said that Lineker will “step back” from presenting Match of the Day – a Saturday night fixture since 1964 and the longest-running football television programme in the world – until it agrees on a clear position on his use of social media.

    The decision triggered a wave of condemnation from hosts and co-hosts who boycotted their duties for Saturday’s round of football fixtures, forcing the broadcasting service in television and radio output to decimate its scheduled programming.

    Pundits and former England strikers Ian Wright and Alan Shearer tweeted that they would not take up their usual roles on Match of the Day, followed by the programme’s commentators.

    Wright then said on his podcast on Saturday that he would quit the BBC if Lineker were sacked for good.

    The BBC’s move sparked a debate over free speech, as well a wave of criticism from politicians and public figures, many of whom accused it of buckling to demands from Conservative lawmakers.

    “It’s absolutely insane that Britain has become a country where having an opinion can cost you your job. If we don’t cherish & fiercely protect free speech, even for views we personally despise, we’re no better than totalitarian regimes like China & North Korea,” said TV host Piers Morgan.

    Keir Starmer, Labour Party leader, accused the BBC of “caving in” to the demands of Conservative Party members.

    “The BBC is not acting impartially by caving in to Tory MPs who are complaining about Gary Lineker,” said Starmer.

    Regardless of the mounting crisis, BBC’s director general, Tim Davie, said he would not resign.

    Meanwhile, Prime Minister Rishi Sunak said that the dispute was a matter for the broadcaster, not the government.

    “I hope that the current situation between Gary Lineker and the BBC can be resolved in a timely manner, but it is rightly a matter for them, not the government,” he said in a statement.

    ‘A massive own goal’

    The BBC announced that the highlights show would air without pundits or a presenter for the first time.

    It also said players would not be asked for interviews after some indicated they would not be available in support of Lineker.

    Weekend preview show Football Focus and results programme Final Score were also pulled from the schedule due to presenters and pundits pulling out.

    Saturday sports schedules for BBC Scotland, Wales and Northern Ireland were also amended.

    “We are sorry for these changes which we recognise will be disappointing for BBC sport fans,” said the broadcaster. “We are working hard to resolve the situation and hope to do so soon.”

    The National Union of Journalists (NUJ) described the action taken against Lineker as a “massive own goal on the part of the BBC”.

    The NUJ General Secretary Michelle Stanistreet added, “Yielding to sustained political pressure in this way is as foolish as it is dangerous.”

    Manchester City fan with a sign in support of BBC presenter Gary Lineker inside a stadium [Tony Obrien/Reuters]

    Lineker is a freelance broadcaster for the BBC, not a permanent member of staff, and is not responsible for news or political content so does not need to adhere to the same strict rules on impartiality as staff working in news.

    The spat was set off by Lineker’s response to a video in which home secretary Suella Braverman unveiled plans to stop asylum seekers crossing the Channel on small boats.

    Lineker, the BBC’s highest-paid star, wrote on Twitter, “This is just an immeasurably cruel policy directed at the most vulnerable people in language that is not dissimilar to that used by Germany in the ’30s.”

    The Conservative government intends to outlaw asylum claims by all irregular arrivals and transfer them to other countries, such as Rwanda, in a bid to stop the crossings, which totalled more than 45,000 last year.

    Some 36 Tory lawmakers have sent a letter to the BBC warning that the affair will “no doubt shake many people’s already fragile confidence” in the corporation’s impartiality.

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  • UK to fund France detention site as leaders agree migration deal

    UK to fund France detention site as leaders agree migration deal

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    France and the United Kingdom have agreed on a multiyear financial package to stop migration across the Channel, days after the UK government drew criticism for a bill barring unauthorised arrivals.

    As part of the deal announced on Friday, the UK will help fund a detention centre in France while French authorities will deploy a new dedicated permanent policing unit and enhanced technology to patrol the country’s beaches, including drones and aircraft.

    The agreement also involves doubling the number of personnel deployed to northern France to tackle small-boat crossings, half of whom will be in place by the end of 2023.

    It will see a new 24-hour zonal coordination centre with permanent British liaison officers that will bring all relevant French authorities together to coordinate the response.

    Officers from both countries will also look to work with countries along the routes favoured by people traffickers.

    The UK said it would contribute roughly $581m in funding over the next three years to help pay for the new measures, adding that it expected France to contribute “significantly more funding”. France did not provide any cost estimates.

    British Prime Minister Rishi Sunak and French President Emmanuel Macron said at a news conference after meeting in Paris that the two sides had agreed to work more closely together.

    “It is time for a new start,” Macron said.

    Sunak, who took office in October 2022, said the two countries shared “the same beliefs” and had “taken cooperation to an unprecedented level”.

    “Criminal gangs should not get to decide who comes to our country. Within weeks of my coming into office, we agreed our largest ever small boats deal and today we’ve taken our cooperation to an unprecedented level to tackle this shared challenge,” he said.

    The two leaders also discussed further cooperation on defence, as well as the joint training of Ukrainian troops.

    Sunak has made stopping boat arrivals one of his five priorities after the number of people arriving on the south coast of England increased to more than 45,000 last year.

    Camille Le Coz, an analyst at the Migration Policy Institute, told Al Jazeera that in terms of policy, “what we are seeing is more of the same.”

    UK-French cooperation over controls at their shared borders has been formalised in the past through a series of bilateral agreements.

    “What the UK really wants is to be able to return people to France, and this is something that has not been agreed and won’t be agreed by France,” Le Coz said.

    Al Jazeera’s Natacha Butler, reporting from Paris, said ties between the two countries have been rocky since the UK voted to leave the European Union in 2016, but have been fortified by the countries’ support for Ukraine since Russia’s invasion last year.

    Friday’s summit was the first in five years, Butler said, and the realignment was partly due to “a common sense of purpose” forged by the ongoing conflict.

    UK plan to stop Channel crossings

    The new deal came on the heels of criticism in the UK of new draft legislation – dubbed the “Illegal Migration Bill” – barring the entry of asylum seekers arriving by unauthorised means, such as in small boats across the Channel.

    The legislation would enable the detention of people without bail or judicial review for the first 28 days after arrival.

    It would also disqualify people from using modern slavery laws to challenge government decisions to remove them in the courts.

    Sunak said the government would “take back control of our borders, once and for all”.

    Diane Abbott, a member of Parliament with the main opposition Labour Party, said the bill was “mistreating migrants and their rights” and would not work “in the real world”.

    Ylva Johansson, the European Union’s commissioner for home affairs, said she believed the plans breached international law.

    Opposition parties and rights organisations have questioned the morality and practicality of the government’s longstanding migration policies, including deporting some asylum seekers to Rwanda.

    UK home secretary Suella Braverman admitted on Tuesday that the government had “pushed the boundaries of international law”.

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  • BBC faces celebrity revolt, political pressure amid Gary Lineker dispute

    BBC faces celebrity revolt, political pressure amid Gary Lineker dispute

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    The BBC faces a spiraling revolt by its top sporting presenters amid a row over the broadcaster’s impartiality standards, after star football host Gary Lineker was chastised for tweets criticizing the U.K. government’s new asylum policies.

    Calls of hypocrisy were also leveled at the U.K. broadcaster on Saturday, as Labour leader Keir Starmer accused the BBC of “caving in” to the demands of Conservative Party members.

    The broadcaster’s sporting coverage was plunged into uncertainty due to a boycott from a group of hosts and co-hosts who disagreed with the BBC for attempting to penalize “Match of the Day” presenter Lineker for his recent comments against what he called the government’s “immeasurably cruel policy” on immigration. He has been told to “step back” from his BBC presenting duties.

    In a March 7 tweet, the ex-England international footballer compared the U.K. government’s new policy on illegal migrants with the language of Nazi Germany, prompting a backlash from Conservative MPs and members of the government. The BBC says the tweet violated its impartiality standards.

    The U.K.’s new asylum policy would block undocumented migrants from entering the country on small vessels. The bill has been condemned by the United Nations, which said it amounts to an “asylum ban.”  

    “Match of the Day” — a flagship BBC football show for Premier League fans — found itself without regulars Ian Wright, Alan Shearer, Jermaine Jenas, Micah Richards and Jermain Defoe, who all pledged to stand by Lineker in the dispute. The BBC said “Match of the Day” would be aired Saturday without presenters or pundits.

    Popular broadcasts “Football Focus” and “Final Score” have also been deleted from the BBC’s schedule this weekend, after Alex Scott, Kelly Somers and Jason Mohammad all backed Lineker’s corner. BBC Radio 5 Live’s football build-up transmission was ditched minutes before airing, as other leading hosts and pundits joined forces against the broadcaster’s disciplining of Lineker.

    BBC Director General Tim Davie apologised for the disruptions and said “we are working very hard to resolve the situation.” In an interview with BBC News late Saturday, Davie said “success for me is getting Gary back on air.” Davie said he would “absolutely not” be resigning over the row.

    The BBC boss said he was prepared to review impartiality rules for freelance staff like Lineker.

    In an earlier statement, the BBC said it considers Lineker’s “recent social media activity to be a breach of our guidelines.”

    “The BBC has decided that he will step back from presenting Match of the Day until we’ve got an agreed and clear position on his use of social media,” according to the statement.

    A five-year contract that Lineker signed in 2020 includes guarantees to adhere to the BBC’s impartiality code. He is on a reported £1.35 million-a-year salary.

    Labour’s Starmer accused the BBC of pandering to the demands of the Conservative Party on Saturday.

    “The BBC is not acting impartially by caving in to Tory MPs who are complaining about Gary Lineker,” Starmer told broadcasters at Welsh Labour’s conference in Llandudno, Wales. “They got this one badly wrong and now they’re very, very exposed.”

    Labour leader Keir Starmer accused the broadcaster of caving in to Tory demands | Jason Roberts/Getty Images

    Conservative MP Nadine Dorries tweeted on Friday that Lineker needs to decide whether he is “a footie presenter or a member of the Labour Party.”

    Prime Minister Rishi Sunak defended the government’s asylum policy in a statement on Saturday and said the impartiality dispute is for the broadcaster and the presenter to sort out.

    “I hope that the current situation between Gary Lineker and the BBC can be resolved in a timely manner, but it is rightly a matter for them, not the government,” Sunak said in the statement.

    The links between the BBC and the U.K.’s governing Conservative Party run deep. The corporation’s chairman, Richard Sharp, was previously outed as having facilitated an £800,000 loan for Boris Johnson, the former U.K. prime minister. On Saturday, Liberal Democrat leader Ed Davey called for Sharp to resign.

    The communications officer for former Conservative Prime Minister Theresa May — Robbie Gibb — has sat on the BBC board as a non-executive director since 2021. Current BBC Director General Tim Davie previously stood as a councilor for the Conservative Party in Hammersmith, a London constituency.

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    Samuel Stolton

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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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    Annabelle Dickson

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  • Sunak and Macron hail ‘new chapter’ in UK-France ties

    Sunak and Macron hail ‘new chapter’ in UK-France ties

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    PARIS — Vegetarian sushi and rugby brought the leaders of Britain and France together after years of Brexit rows.

    U.K. Prime Minister Rishi Sunak and French President Emmanuel Macron on Friday held the two countries’ first bilateral summit in five years, amid warm words and wishes for closer post-Brexit cooperation.

    “This is an exceptional summit, a moment of reunion and reconnection, that illustrates that we want to better speak to each other,” Macron told a joint press conference afterward. “We have the will to work together in a Europe that has new responsibilities.”

    Most notably from London’s perspective, the pair agreed a new multi-annual financial framework to jointly tackle the arrival of undocumented migrants on small boats through the English Channel — in part funding a new detention center in France.

    “The U.K. and France share a special bond and a special responsibility,” Sunak said. “When the security of our Continent is threatened, we will always be at the forefront of its defense.”

    Macron congratulated Sunak for agreeing the Windsor Framework with the European Commission, putting an end to a long U.K.-EU row over post-Brexit trade rules in Northern Ireland, and stressing it marks a “new beginning of working more closely with the EU.”

    “I feel very fortunate to be serving alongside you and incredibly excited about the future we can build together. Merci mon ami,” Sunak said.

    It has been many years since the leaders of Britain and France were so publicly at ease with each other.

    Sunak and Macron bonded over rugby, ahead of Saturday’s match between England and France, and exchanged T-shirts signed by their respective teams.

    Later, they met alone at the Élysée Palace for more than an hour, only being joined by their chiefs of staff at the very end of the meeting, described as “warm and productive” by Sunak’s official spokesman. The pair, who spoke English, had planned to hold a shorter one-to-one session, but they decided to extend it, the spokesman said.

    They later met with their respective ministers for a lunch comprising vegetarian sushi, turbot, artichokes and praline tart.

    Macron congratulated Sunak for agreeing the Windsor Framework with the European Commission | Christophe Archambault/AFP via Getty Images

    Speaking on the Eurostar en route to Paris, Sunak told reporters this was the beginning of a “new chapter” in the Franco-British relationship.

    “It’s been great to get to know Emmanuel over the last two months. There’s a shared desire to strengthen the relationship,” he said. “I really believe that the range of things that we can do together is quite significant.”

    In a show of goodwill from the French, who pushed energetically for a hard line during Brexit talks, Macron said he wanted to “fix the consequences of Brexit” and opened the door to closer cooperation with the Brits in the future.

    “It’s my wish and it’s in our interests to have closest possible alliance. It will depend on our commitment and willingness but I am sure we will do it,” he said alongside Sunak.             

    Tackling small boats

    Under the terms of the new migration deal, Britain will pay €141 million to France in 2023-24, €191 million in 2024-25 and €209 million in 2025-26.

    This money will come in installments and go toward funding a new detention center in France, a new Franco-British command centre, an extra 500 law enforcement officers on French beaches and better technology to patrol them, including more drones and surveillance aircraft.

    The new detention center, located in the Dunkirk area, would be funded by the British and run by the French and help compensate for the lack of space in other detention centers in northern France, according to one of Macron’s aides.

    According to U.K. and French officials, France is expected to contribute significantly more funding — up to five times the amount the British are contributing — toward the plan although the Elysée has refused to give exact figures.

    A new, permanent French mobile policing unit will join the efforts to tackle small boats. This work will be overseen by a new zonal coordination center, where U.K. liaison officers will be permanently based working with French counterparts.

    Sunak stressed U.K.-French cooperation on small boats since November has made a significant difference, and defended the decision to hand more British money to France to help patrol the French northern shores. Irregular migration, he stressed, is a “joint problem.”

    Ukraine unity

    Sunak and Macron also made a show of unity on the war in Ukraine, agreeing that their priority would be to continue to support the country in its war against Russian aggression.

    The French president said the “ambition short-term is to help Ukraine to resist and to build counter-offensives.”

    “The priority is military,” he said. “We want a lasting peace, when Ukraine wants it and in the conditions that it wants and our will is to put it in position to do so.”

    The West’s top priority should remain helping Ukrainians achieve “a decisive battlefield advantage” that later allows Ukrainian President Volodymyr Zelenskyy to sit down at the negotiating table with Russian President Vladimir Putin from a stronger position, Sunak said en route to the summit.

    “That should be everyone’s focus,” he added. “Of course, this will end as all conflicts do, at the negotiating table. But that’s a decision for Ukraine to make. And what we need to do is put them in the best possible place to have those talks at an appropriate moment that makes sense for them.”

    The two leaders also announced they would start joint training operations of Ukrainian marines.

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    Cristina Gallardo and Clea Caulcutt

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  • France pushes protectionism in Ukraine defense plan

    France pushes protectionism in Ukraine defense plan

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    As Russia’s war in Ukraine puts a heavy strain on EU arms, there’s infighting in Brussels over how best to reload.

    The latest skirmish is focused around a procurement fund intended to ramp up production of arms in Europe.

    POLITICO has learned that key committees in the European Parliament — namely, the committees for industry, the internal market, and the subcommittee on security and defense — have clashed over the fund, formally known as European Defense Industry Reinforcement Through Common Procurement Act (EDIRPA). It holds €500 million for now, with the possibility to grow.

    A French-led group in the Parliament is vying to keep the joint defense purchase pot within the borders of the European Union — which opponents are deriding as a power grab for France.

    Currently, a compromise text seen by POLITICO leaves the door open to spending outside the EU. It says non-EU companies may be involved “provided that this does not contravene … the security and defense interests of the union and its member states.”

    A faction across the relevant committees — consisting mainly of Polish, Estonian, Portuguese, German and Luxembourgish parliamentarians — has also amended the text to include “associated third countries.” They want to keep open the option to tap non-EU countries, like South Korea or the United States, to fill any gaps in weapon production.

    In light of grinding ground battles on Ukrainian territory, concerns have been growing over the EU’s capacity to ramp up production of ammunition and weapons.

    Yet French MEPs who dominate the Renew Europe group have been pushing back, seeking to make the fund a European-only affair.

    Nathalie Loiseau, chair of the parliamentary defense subcommittee, denied that the push to limit funding to European countries would benefit only France. “France is not the only country producing weapons in Europe,” the Renew MEP told POLITICO, pointing also to Germany, Italy and Poland. 

    Loiseau said the entire remit of EDIRPA is intended to strengthen European industrial policy. “We need our industries to be able to produce [arms] more quickly, and we need to find a way to encourage this, so we need a solid EDIRPA.”

    Ivars Ījabs, a Latvian MEP in the Renew Europe group who is leading work on the file in the internal market committee, described how he and his colleagues are “aware of the immediate challenges to European defense forces.”

    As one of the MEPs most opposed to the French position, he explained: “My French colleagues are very much in support of the European Commission’s original proposal, with an emphasis on strengthening the defense industrial base in the medium term.”

    Loiseau added that while she is open to non-European companies producing the weapons, “they must be produced in Europe,” arguing that spending EU money on weapons produced outside the bloc would be illegal under EU treaties, risking collapse of the entire procurement program.

    Striking a balance

    The increasingly acrimonious row in Parliament over the defense plan hits on a question raised since Europe began discussing beefing up its defense capabilities: Who will be able to get their hands on the extra billions of euros the EU intends to invest?

    Thierry Breton, the internal market commissioner who announced the plan last year and has been championing it, is also French. Unveiling the initiative, he said, “These investments, funded by the European taxpayers … should benefit first and foremost European industry wherever that is possible.”

    French industry accounts for more than 25 percent of European military capabilities. But many other countries, from Italy to Sweden, also have strong defense sectors (and many key companies based there often have strong corporate ties with countries outside the EU, such as the U.K. and the U.S.).

    German center-right MEP Andreas Schwab said a balance needs to be struck to get the process moving. 

    “This instrument needs to find a middle ground, a middle way: sufficiently flexible for foreign components, but also a boost to EU industry — and especially, a boost to make ministries of defense start working together on bigger joint procurement projects,” he told POLITICO. 

    Thierry Breton announced the procurement plan last year, arguing it should benefit first and foremost European industry | Pool photo by Kenzo Tribouillard/AFP via Getty Images

    All major players agree on one thing: The fund should be bigger.

    While the Commission’s plan earmarked an initial €500 million, the draft European Parliament proposal by the internal market and defense committees increased that to €1.5 billion. 

    But even €1.5 billion is “peanuts” when it comes to military hardware, said Dragoş Tudorache, Renew’s lead on EDIRPA in the defense subcommittee.

    Tudorache explained that Parliament could theoretically wrap it up within two to three weeks once there’s agreement among the three committees.

    As to which of the two camps will win out: “Right now I would not call it either way,” the MEP said.

    A vote of the full Parliament — possibly in June — may be the most likely outcome.

    EDIRPA is separate to the European Peace Facility, an off-budget intergovernmental EU fund that is now being used to backfill member countries’ supplies once they’ve sent arms to Ukraine. This mechanism is at the center of current plans to provide ammunition quickly to Ukraine, as first reported by POLITICO.

    In contrast, EDIRPA is a medium-term project, originally meant to be for 2022 to 2024, to carry forward the joint procurement of arms and ammunition. 

    Based on EDIRPA, the Commission is meant to present an even larger program for joint procurement, called the European defence investment programme, which was originally expected for last year but is now tapped to arrive later this year.

    Diplomats point out that is unclear where the Commission could find the money for a more ambitious joint procurement program.

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    Suzanne Lynch, Eddy Wax and Jacopo Barigazzi

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