Good morning. Persistent inflation has had spillover effects on the insurance that companies use to guard against disaster at their facilities. Now, higher construction costs are making it harder to get coverage and paid on claims.

• How it normally works: Businesses usually insure against events such as fire and hurricanes in one-year cycles, which in a typical economic environment doesn’t pose major difficulties. If a factory would cost $40 million to build in January, it probably will cost slightly more than $40 million to replace in December, if, for example, a wildfire swept through.
   
• Costs on the rise: In the current inflationary environment, the cost of rebuilding could be significantly higher, which has caused headaches for businesses and insurers, Risk & Compliance Journal’s Richard Vanderford reports. While broad consumer costs, as measured by the consumer-price index, rose 6.4% in January from a year earlier, some construction-related costs have increased much more.

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Justice Department probes collapse of Do Kwon’s TerraUSD stablecoin. 

The Justice Department is investigating last year’s collapse of the TerraUSD stablecoin, adding the risk of U.S. criminal charges to the pressure on its creator, South Korean crypto entrepreneur Do Kwon, people familiar with the matter said.

The Federal Bureau of Investigation and the Southern District of New York have questioned former team members of Mr. Kwon’s company, Terraform Labs Pte. Ltd., in recent weeks and sought to interview others, the people said. The FBI and SDNY are both parts of the Justice Department, and SDNY often takes the lead in high-profile prosecutions of financial crimes.

A Tesla, 37-acre property and a plane: A closer look at a $250 million covid-aid fraud scheme. 

The Justice Department charged 10 additional people in connection with a scheme that allegedly stole more than $250 million from a Covid-19 aid program that fed low-income children.

The 10 defendants, who were allegedly part of a broader scheme announced in September, face charges of conspiracy, wire fraud, money laundering and bribery, the U.S. attorney’s office in Minnesota said Monday. The defendants participated in a scheme to defraud the Federal Child Nutrition Program by misappropriating and laundering millions of dollars intended as reimbursements for the cost of serving meals to children, prosecutors said.

The newly charged defendants allegedly used the money from the federal program to purchase real estate, luxury cars and airline tickets.

• South Africa’s government said Monday that it is investigating fast-fashion company Shein following complaints from the local textile union and industry association that it may be exploiting tax loopholes to gain an unfair advantage in Africa’s most developed economy.

First Republic leads rout in bank stocks despite emergency measures.

Shares of First Republic Bank plunged Monday, and major U.S. regional bank stocks suffered their largest decline in three years, despite efforts by regulators to calm investors following a pair of bank failures.

First Republic shares closed down nearly 62% after earlier falling as much as 75%, its largest decrease on record. The bank said Sunday that it had shored up its finances with additional funding from the Federal Reserve and JPMorgan Chase. On Monday, President Biden said the banking system is safe, stressing steps taken to limit the fallout from the failures of Silicon Valley Bank, a California lender that catered to venture capitalists, and Signature Bank, a New York firm with ties to cryptocurrencies.

Read more: 

• U.S. Bank Collapses Add to Pressure on Global Central Banks
• KPMG Gave SVB, Signature Bank Clean Bill of Health Weeks Before Collapse
• Asian Startups’ Confidence in U.S. Banking Wanes After SVB Panic

• Chinese leader Xi Jinping plans to speak with Ukrainian President Volodymyr Zelensky for the first time since the start of the Ukraine war, likely after he visits Moscow next week to meet with Russian President Vladimir Putin, according to people familiar with the matter.
   
• U.S. officials expressed skepticism that Tehran would honor a Chinese-brokered entente between Iran and Saudi Arabia, and denied the deal illustrated Washington’s diminishing influence in the region.
   
• The Biden administration approved the massive Willow oil-drilling project in the Alaskan Arctic over the objections of environmentalists and many Democrats who wanted the project scuttled.
   
• Distressed-debt investors are betting there is money to be made on the collapse of Silicon Valley Bank, even though federal authorities have stressed that emergency measures to protect the bank’s depositors wouldn’t extend to other investors.
   
• Michael Cohen testified Monday before the Manhattan grand jury hearing evidence of Donald Trump’s role in a hush-money payment to a porn star on the eve of the 2016 election.
   
• Pfizer Inc. has agreed to pay $43 billion for biotech Seagen Inc. and its pioneering class of targeted cancer drugs.