Good morning. Treasury Secretary Janet Yellen said more banks would probably seek to merge this year as higher interest rates and recent banking turmoil are making it more expensive for them to hang on to depositors.

• Profits weakened: Some smaller banks have said they are paying more on savings accounts after the Federal Reserve began quickly raising rates last year. Yellen said that trend has continued following the collapses of Silicon Valley Bank and Signature Bank in March, when small and midsize banks across the country saw depositors jump to larger institutions they believed were less vulnerable. Paying higher rates for deposits is now denting those banks’ profitability, Yellen said.
   
• Regulators on the lookout for more turmoil: Her comments are the clearest sign yet that regulators are bracing for the tumult the industry weathered earlier this year to flare up again. While Yellen and other officials guaranteed deposits at SVB and Signature Bank and took other steps to stabilize the banking system, the Fed’s rapid rate increases pose a challenge for many banks. Midsize-bank stocks were hammered earlier this year as investors worried about their viability.
   
• Consolidation pressure expected to increase: Yellen said she didn’t expect a return to the same instability seen earlier in the year, but weaker second-quarter earnings could put pressure on stock prices and potentially prompt some banks to merge. “I don’t think it’s a huge threat to the sector, but there will probably be banks that end up wanting to merge,” Yellen said in an interview in Paris, where she is attending meetings on debt and climate projects in the developing world.

Twitter shows ‘strong willingness’ to comply with digital-content law, EU regulator says.

A top European Union tech regulator said he sees a “strong willingness” from Twitter to comply with Europe’s new digital-content law, saying the platform is working on compliance.

Stress test. Thierry Breton, the EU commissioner for the internal market, gave his assessment after an EU team visited Twitter’s headquarters in San Francisco this week for a so-called stress test to determine how well the platform would comply with the new law, which comes into force beginning in late August.

Dry run for EU's Digital Services Act. Breton said the point of the test wasn’t to publicly give a result, but to discuss what the platform needed to do to comply with the law. 

• Prime Trust, a state-chartered trust company that serves as a custodian for crypto firms, is feared by digital-asset investors to be on the verge of failing after being rebuked by its state regulator and abandoned by a potential acquirer.

After weekend of chaos in Russia, questions remain over fate of Wagner.

A day after Wagner’s mutiny showed the unexpected fragility of President Vladimir Putin’s regime, all the main players in Russia’s worst political crisis in decades stayed out of sight—leaving Russians, and the world, to wonder whether the drama was really over.

Situation still unclear. Key unanswered questions include the future of Wagner’s 25,000 heavily armed troops, of the paramilitary group’s owner Yevgeny Prigozhin and of Russia’s military leadership, which failed to stop his rapid advance toward Moscow. The details of agreements brokered by Belarusian President Alexander Lukashenko to halt looming bloodshed have yet to be made public.

• Why Wagner Chief Prigozhin Turned Against Putin
• For the U.S. and NATO, a Weakened Russia Is More of a Wild Card
• Mutiny Revives Fears Over Control of Russia’s Nuclear Weapons

• More Western companies are siloing parts of their businesses in China as they try to lower risks from tensions between Washington and Beijing.
   
• Transportation Secretary Pete Buttigieg is warning of the potential for air-travel disruption ahead of a deadline for airlines to retrofit equipment to avoid potential interference from 5G wireless signals.
   
• The world’s central banks raced at an extraordinary pace over the past year to cool inflation, but it hasn’t proved enough—yet.

• A short-lived mutiny in Russia has brought into relief Beijing’s biggest fear surrounding the invasion of Ukraine: that it risked destabilizing its closest partner against the U.S.-led West.
   
• Taiwan’s coming presidential election loomed large in talks between senior Chinese officials and Antony Blinken during the U.S. secretary of state’s recent visit to Beijing, according to people briefed on the matter.
   
• Bad weather and a technology problem snarled travel up and down the East Coast Sunday, marking one of the most challenging travel days in months.
   
• Starbucks workers disrupted operations at dozens of cafes this weekend and pledged to keep striking, citing concerns that include display of Pride decorations in stores and negotiations between unionized baristas and the coffee giant.
   
• There are government secrets, and then there are government secrets about underwater spying.

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