European Midday Briefing: Credit Suisse Takeover -2-

Protest movements have long been the final arbiter, albeit an unofficial one, of France's political system, bringing successive governments to their knees and forcing previous presidents to abandon or even rescind legislation protesters oppose. That is why thousands of protesters have streamed into public squares across France since Mr. Macron exercised Article 49 of the constitution to raise France's retirement age to 64 from 62 by 2030 without the consent of Parliament.

GLOBAL NEWS

Here's why UBS's deal to buy Credit Suisse matters to U.S. investors

Thousands of miles away from U.S. shores last Wednesday, a headline began working its way across Europe, then Wall Street, sparking fresh panic as it dawned on investors that they may be facing yet another banking crisis.

Shares of Credit Suisse CS CH:CSGN would eventually sink 25% last week to a fresh record low, unable to find footing days after the head of top shareholder Saudi National Bank said they won't invest any more in the bank. By Sunday, the struggling Swiss bank had a new owner, leaving investors to wonder if at least one chapter in a current roller coaster of global banking stress can be closed.

Fed coordinates with global banks to ease dollar-funding as banking crisis intensifies

The Federal Reserve and a quintet of global central banks on Sunday announced a coordinated effort to ease a fast-growing banking crisis, in the hours after UBS announced a historic, emergency merger with troubled Credit Suisse.

The central bank, including the Bank of Japan, Bank of Canada, Swiss National Bank and the European Central Bank, said it would increase the cadence of of seven-day maturity to daily from weekly operations. Such measures are invoked during periods of market stress to ease access to dollars by international trading partners.

First Republic Bank Looms Large for U.S. Regulators After Credit Suisse Sale

U.S. policy makers warily watched the rushed rescue of Credit Suisse Group AG over the weekend, hoping that its purchase by UBS Group AG would stem a slide in financial stocks triggered by the recent collapse of two regional banks.

Late Sunday, the Fed and five major central banks announced a coordinated effort to improve liquidity by moving U.S. dollars among themselves each day, starting Monday, instead of once a week. The central banks then lend those dollars out to financial institutions, in an effort to backstop other countries' funding needs should strains emerge in global markets.

Fed Raised Concerns About SVB's Risk Management in 2019

WASHINGTON-The Federal Reserve raised concerns about risk management at Silicon Valley Bank starting at least four years before its failure earlier this month, documents show.

In January 2019, the Fed issued a warning to SVB over its risk-management systems, according to a presentation circulated last year to employees of SVB's venture-capital arm, which was viewed by The Wall Street Journal.

Smaller Banks' Critical Role in Economy Means Distress Raises Recession Risks

Main Street businesses and American families are likely to find it harder to get a loan because of turmoil in the banking industry, denting economic growth and raising the risk of a recession.

"The risk in terms of the spark from SVB is real," said Greg Daco, chief economist at EY-Parthenon, a strategy consulting unit of Ernst & Young LLP. The collapse of Silicon Valley Bank set off fear among depositors that led to the failure of Signature Bank and the move to rescue First Republic Bank.

China's Benchmark Loan Rates Remain Unchanged

China's benchmark lending rates were kept unchanged as expected following a hold of key policy rates last week, according to a statement released Monday by the country's central bank.

The one-year loan prime rate was steady at 3.65%, while the five-year LPR was unchanged at 4.3%, said the People's Bank of China.

North Korea Simulates Nuclear Attack With Launch of Short-Range Ballistic Missile

SEOUL-North Korea says it was simulating a nuclear attack on U.S. and South Korean forces with the launch of a short-range ballistic missile with a mock warhead Sunday.

The short-range ballistic missile was fired off at around 11:05 a.m. local time from the North's Tongchang-ri area and traveled about 500 miles before landing in the waters between Korea and Japan, South Korea's military said. The missile reached an altitude of about 30 miles and landed outside of Japan's exclusive economic zone, according to Japan's Defense Ministry.

Former Michael Cohen Lawyer Expected to Testify in Grand Jury Investigating Trump

A New York defense attorney who briefly advised Michael Cohen is expected to testify Monday before the Manhattan grand jury investigating Donald Trump's alleged role in a hush-money payment to a porn star, according to people familiar with the matter.

Robert Costello, a partner in the New York office of Davidoff Hutcher & Citron LLP and former federal prosecutor, is slated to testify at the request of the former president's lawyers, according to people familiar with the matter.

Trump's Comments About Possible Arrest Reignite Political Fight

Top Republicans derided the possible indictment of Donald Trump over payoffs to a porn star as politically motivated, while Democrats warned that the former president's social-media exhortations were irresponsible and risked new violence akin to the Capitol riot.

Some potential Republican presidential candidates said that any prosecution of Mr. Trump could rally conservative voters to his side, potentially boosting his 2024 campaign prospects.

Biden's 'Go It Alone' Trade Deals Draw Warnings From Congress

WASHINGTON-The Biden administration is accelerating its efforts to pursue trade agreements that bypass Congress as it seeks to counter China, but the moves have sparked a fight with lawmakers that threatens to upend the president's trade strategy at a critical point of rising global competition.

Tensions have boiled over in recent days amid the administration's push to forge a free-trade deal on critical minerals to resolve a dispute with the European Union over electric-vehicle subsidies, the latest in a string of such pacts that skirt congressional approval.

Write to paul.larkins@dowjones.com

Write to us at newsletters@dowjones.com

We offer an enhanced version of this briefing that is optimized for viewing on mobile devices and sent directly to your email inbox. If you would like to sign up, please go to https://newsplus.wsj.com/subscriptions.

This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

March 20, 2023 05:57 ET (09:57 GMT)

Copyright (c) 2023 Dow Jones & Company, Inc.