Good morning. Bank regulators have been loath to let big lenders buy each other. They might have to reassess and allow more mergers as a way out of the current midsize-bank turmoil.

• Bolstering the market: Those lenders are under pressure after several of their peers failed in recent months. Some analysts and banking experts say the best way to shore up depositors’ and investors’ confidence is for more banks to merge without government assistance—and they say regulators should get out of the way or even encourage the tie-ups.
   
• More banking mergers? “If the stress continues, the banking regulators are going to have to permit M&A,” said Jonathan McKernan, a Republican on the board of the Federal Deposit Insurance Corp. He said regulators should also consider letting private-equity firms take positions in banks.
   
• Regulatory impact: Any move to embrace greater consolidation would mean a shift at federal banking agencies, including at the FDIC. The agency plays an outsize role as the federal regulator of thousands of banks, including two of the three midsize banks to fail in recent months.

Business groups sue SEC over stock buyback rules.

A trio of business groups led by the U.S. Chamber of Commerce sued the Securities and Exchange Commission Friday to block new rules requiring public companies to disclose more information about their stock buybacks.

Challenging Gensler. The lawsuit, filed in a conservative appeals court favored by industry groups fighting government regulation, is one of the first legal challenges to SEC Chair Gary Gensler’s rule-making agenda. Wall Street is gearing up for a protracted battle against its main regulator as Mr. Gensler moves toward adopting dozens of rules opposed by the industry.

Justice Department expands its bribery probe of Pfizer

Federal prosecutors in the Justice Department’s Foreign Corrupt Practices Act unit have sent an informal request to Pfizer for documents related to its operations in Mexico, according to the pharmaceutical company’s latest investor report.

The request, which Pfizer said it received in March, comes on the back of a number of other lines of inquiry by the FCPA unit. The Justice Department and the U.S. Securities and Exchange Commission are also looking into Pfizer’s operations in Russia and China, the company has previously said.

• A group of former Soviet republics has emerged as a major transshipment hub for U.S. and European computer chips, lasers and other products with civilian and military uses headed for Russia, according to Western officials and data compiled by The Wall Street Journal.
   
• The U.S. and its allies are grasping for ways to further tighten the screws on Russia’s economy as the invasion of Ukraine grinds on despite the broad sanctions the West has already levied on the Kremlin.
   
• A court in Montenegro said it would allow South Korean cryptocurrency mogul Do Kwon to leave prison and stay under house arrest on bail on Friday, while he awaits trial on a charge of using a forged Costa Rican passport during a bid to leave the Balkan country.
   
• The tech entrepreneur once hailed as Britain’s Bill Gates was extradited to the U.S., a year after a U.K. judge ruled he had duped HP into overpaying for his software company.

Republicans, Democrats making progress in debt-limit yalks, Yellen says.

The Biden administration and congressional Republicans are making progress in their negotiations over federal spending and raising the debt limit, Treasury Secretary Janet Yellen said, adding that she believes the talks could result in an agreement.

“I’m hopeful. I think the negotiations are very active. I’m told they have found some areas of agreement,” Ms. Yellen said in an interview Saturday at the end of a gathering of finance ministers from the Group of Seven advanced democracies in Japan.

G-7 leaders expected to take aim at Chinese ‘economic coercion.’

The U.S. and its allies are poised to increase pressure on China at this week’s Group of Seven summit in Japan, with an expected joint statement rejecting use of economic retaliation against nations over policy disputes and other disagreements, according to people familiar with the situation.

Growing concerns. The anticipated statement isn’t expected to mention any country by name, the people said, but comes as concerns mount among the U.S. and its allies over Beijing’s increasing use of what its critics call “economic coercion” to show its displeasure with other countries.

• A Federal Reserve official said the central bank should be prepared to continue lifting interest rates because inflation remains too high and the labor market is too tight.
   
• Israel and Gaza-based militant group Islamic Jihad agreed to a cease-fire late Saturday, to end five days of intense fighting that had raised fears of a wider conflict.
   
• A year of political instability that led up to the arrest of former Prime Minister Imran Khan this week has crippled Pakistan’s economy, plunged millions into poverty and left the country at the edge of default.
   
• Russian forces launched a wave of drones and missiles at Ukraine over the weekend, while a Ukrainian counterattack continued on the outskirts of Bakhmut, killing a Russian commander and his deputy.

• Turkey’s President Recep Tayyip Erdogan and his main challenger said they were both prepared to accept a runoff election later this month with neither candidate claiming an outright victory.
   
• Investors have a sour outlook on U.S. stocks. Contrarians say that is good news for the market.
   
• There’s a new status symbol in corporate America: the ability to keep raising prices.
   
• Activist investor Engaged Capital is planning to run a proxy fight for three board seats at high-end burger chain Shake Shack, according to people familiar with the matter.
   
• JPMorgan Chase has become the target of a campaign by Republican state officials seeking to expose what they see as religious discrimination in the bank’s business practices.
   
• Chinese authorities said they sentenced an American citizen to life in prison on espionage charges, in a case that could further strain relations between Beijing and Washington.

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