After the Federal Deposit Insurance Corporation stepped in last weekend to take over Silicon Valley Bank and Signature Bank, panic rippled through the banking sector, touching off government interventions to prop up other suffering banking institutions. On Thursday, 11 of the country’s biggest banks combined resources to inject $30 billion into First Republic Bank, the 14th-largest U.S. bank, which found itself on the brink of collapse. The infusion was the result of an agreement reached by Treasury Secretary Janet L. Yellen and Jamie Dimon, the JPMorgan Chase chief executive, whose bank saved several rivals during the 2008 financial crisis. But though some hear echoes of 2008 in this banking crisis, the White House would like to avoid comparisons. Despite sweeping actions by the Federal Reserve, Treasury and F.D.I.C. to protect clients’ deposits and assets and shore up confidence in the country’s banks, President Biden is loath to use the term “bailout.”
Meta announced last week that it would lay off another 10,000 employees, or 13 percent of its work force, as it pares down after a hiring boom that accelerated during the pandemic. The mass layoff is the second to roil Meta in recent months: In November, the company let go 11,000 workers across departments and regions. In the time since, Meta reported that it was taking a $4.2 billion restructuring charge for the fourth quarter and expecting an additional $1 billion in restructuring costs in 2023 to account for its plans to terminate some office space leases, redesign some data center projects and pay out severance for laid-off employees. Similar efforts to cut costs have been underway at Amazon, Alphabet, Microsoft and Salesforce, as boom times in the tech industry come to an end.
Data released on Tuesday showed that annual inflation had cooled slightly, with the Consumer Price Index climbing 6 percent over the year through February — down from 6.4 percent in January. But more troubling signs lay beneath the surface of the report: Core inflation, which strips out volatile food and fuel prices, climbed 0.5 percent from the previous month, exceeding analysts’ expectations and making for the fastest monthly pickup since September. Officials at the Federal Reserve had been awaiting this data to inform their decision about interest-rate increases at their next meeting this week.
Shou Zi Chew, the chief executive of TikTok, will testify again before Congress on Thursday as the app comes under increasing scrutiny from President Biden and other policymakers in Washington. Last week, TikTok said the Biden administration wanted its Chinese owner, ByteDance, to sell the app, threatening a ban in the United States if it could not complete a deal. The crux of Washington lawmakers’ concerns is fear that Beijing could request the data of the 100 million Americans who use the app. But a sale could be difficult to pull off: TikTok’s price tag of $50 billion or more would be too steep for all except a tech giant like Meta or Google — but those companies would probably want to avoid the antitrust battle that could arise from trying to acquire the social media juggernaut.
Article source: https://www.nytimes.com/2023/03/19/business/week-in-business-banking-crisis.html