FirstFT: Silicon Valley Bank fallout

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Today, US president Joe Biden is expected to speak about the emergency measures taken by regulators to manage contagion from Silicon Valley Bank’s collapse. I’ll bring you up to speed on moves by regulators on both sides of the pond to contain the fallout from the second-biggest bank failure in US history as well as the latest market reaction. You can also get our latest on SVB here.

Here’s what else to keep tabs on today:

  • Aukus pact: Biden, along with UK prime minister Rishi Sunak and Australia’s Anthony Albanese, will announce a deal to supply Australia with nuclear-powered submarines.

  • Pentagon: The US Department of Defense will roll out the details of its fiscal year 2024 budget request. The proposal includes a 5.2 per cent pay rise for both military and civilian personnel. 

Any thoughts on the collapse of SVB? Let us know at [email protected].

Today’s top news

1. US regulators face questions over whether they missed warning signs at SVB, with many observers questioning how the country’s 16th-biggest bank was allowed to become so vulnerable. Here are the red flags experts say could have been spotted.

2. HSBC has emerged as the winner of an auction for the UK unit of the SVB following all-night talks. Britain’s biggest bank will pay a symbolic £1 for SVB’s UK arm. Read more about the dramatic fire sale.

3. The German financial watchdog BaFin has imposed a moratorium over the German branch of SVB, temporarily blocking any payments to and from clients.

4. European bank shares are under pressure following the collapse of the start-up lender. There are also ongoing signs of weakness among US bank shares, while government bond prices have soared this morning. Shares in First Republic, the San Francisco-based bank, fell 55 per cent in pre-market New York trading.

5. One other story to bring you this morning. Pfizer is to buy the drug developer Seagen in a deal valued at $43bn. The acquisition will bulk up Pfizer’s cancer treatment portfolio as it faces declining sales linked to its Covid-19 treatment. (Reuters)

The Big Read

© FT montage

The UK currently has jobs to spare. Ill health, early retirement and population ageing have all helped shrink the workforce, leaving businesses struggling to fill vacancies. One big development is acting as a counterweight, however: an unexpectedly strong bounceback in migration to the country.

We’re also reading . . . 

Chart of the day

Chancellor Jeremy Hunt has pledged to use his Budget to set Britain on the “hard road” to recovery. But how exactly will he do that? Here are five things to look out for in his plan this Wednesday.

Column chart of Forecasts for GDP growth in 2023 (%) showing Newer forecasts for the UK economy expect a shallower recession

Take a break from the news

Trieste, the coastal capital city of the Friuli-Venezia Giulia region in north-east Italy, is having a bit of a moment. Read more on Europe’s comeback kid.

Sant’Antonio Taumaturgo church seen from the Trieste Grand Canal
The Sant’Antonio Taumaturgo church seen from the Trieste Grand Canal © Camilla Glorioso

Additional contributions by Tee Zhuo and Annie Jonas

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