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The Morning Risk Report: SVB, Signature Bank Depositors to Get All Their Money as Fed Moves to Stem Crisis
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Efforts to control impact: The measures, which include guaranteeing all deposits of SVB, were designed to shore up wavering confidence in the banking system. They were jointly announced Sunday night by the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corp.
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Another collapse: Regulators announced they had taken control of Signature Bank, one of the main banks for cryptocurrency companies, on Sunday. The New York bank’s depositors will be made whole, officials said.
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Moves to bolster confidence: The Fed and Treasury separately said they would use emergency-lending authorities to make more funds available to meet demands for bank withdrawals, an additional effort to prevent runs on other banks.
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Will government efforts contain the crisis? A U.S. plan that soothes nerves about access to uninsured deposits—most of the bank’s deposits are sizable enough that they don’t carry Federal Deposit Insurance Corp. protection—could tamp down the crisis and limit any impact on the economy as the Federal Reserve focuses on combating inflation by raising interest rates.
More on the impact of the collapse of SVB:
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Content from our Sponsor: DELOITTE
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How Controllers Can Capture Digital Benefits While Managing Risks
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As digital processes and technologies expand though controllership functions, so do exposures to cyber risks. Consider applying an integrated risk management and governance approach for added security. Read More ›
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Join Our Live Q&A on Silicon Valley Bank Meltdown
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Silicon Valley Bank collapsed on Friday, becoming the largest bank to fail since the 2008 financial crisis. On Sunday, regulators rolled out emergency measures to prevent a banking crisis and guarantee depositors access to their money. Join the WSJ for a live discussion at 4 p.m. ET that will also feature Sheila Bair, former head of the FDIC, on the fallout from the bank failure.
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WSJ Risk & Compliance Forum
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Join us on May 9 for the WSJ Risk & Compliance Forum, where we will be discussing export controls, sanctions, sustainability, privacy laws, workplace compliance, managing in a downturn and addressing risks at the board level. Sign up here.
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A subsidiary of security services company G4S entered a deferred prosecution agreement with the Serious Fraud Office in 2020. PHOTO: DARREN STAPLES/REUTERS
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U.K. Serious Fraud Office abandons prosecution of former G4S executives.
U.K. prosecutors have dropped a case against three former executives of security services company G4S PLC who had been accused of involvement in a scheme to defraud a government department, reports Risk & Compliance Journal's Richard Vanderford.
The SFO’s abandonment of the case comes as the agency faces intense scrutiny over missteps.
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Corsa Coal to pay $1.2 million over alleged Egypt bribes
Corsa Coal Corp. has agreed to pay $1.2 million for allegedly using a third party to bribe Egyptian government officials, part of a bid to win contracts to supply coal to a state-owned company, the U.S. Justice Department said.
The Justice Department declined to prosecute Corsa, which it said came forward to voluntarily disclose the conduct and has offered "full and proactive" cooperation. Corsa made $32.7 million in profits from the scheme, but can only afford to pay the $1.2 million, the DOJ found.
The company noted the settlement in a statement but said it wouldn't make additional public comments on the matter unless required to by law.
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China’s legislature voted Sunday to retain Yi Gang as governor of the central bank, the People’s Bank of China.
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The Federal Bureau of Investigation this week acknowledged having bought precise geolocation data derived from mobile-phone advertising in the past before backing away from the practice.
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Untangling the mystery of who carried out the Nord Stream pipelines blasts could become a major factor in multibillion-dollar arbitration proceedings that European energy companies have filed against Russian state-run gas giant Gazprom PJSC.
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State regulators are pushing back on U.S. life insurers’ use of data science to speed up cumbersome application processes, citing concerns that artificial intelligence could unfairly discriminate against minorities.
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PHOTO ILLUSTRATION BY ALEXANDRA CITRIN-SAFADI/THE WALL STREET JOURNAL
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Wall Street braces for the next Silicon Valley Bank.
Investors were worried that the fastest interest-rate increases in decades meant that something in the economy might break. Last week, it did. Now, investors are asking: What else might crack?
“I think this could be the first cockroach in the cellar,” said Fredric Russell, chief executive of Fredric E. Russell Investment Management Co. in Tulsa, Okla. “Banks get thrown into the dark pool of complacency, and then they lower their quality standards.”
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China poses an “epoch-defining systemic challenge” to the U.K. and its allies, British Prime Minister Rishi Sunak said Sunday, as the U.K. government said it would spend an extra $6 billion on its nuclear-armed submarine fleet.
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Beijing is becoming the dominant force in the South China Sea, through which trillions of dollars in trade passes each year, a position it has advanced step-by-step over the past decade.
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Employers’ solid hiring in February brought the total of added U.S. jobs to 4.3 million over the past year, but signs are emerging that job growth is slowing in some industries.
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“I’ve been working all weekend with our banking regulators to design appropriate policies to address this situation.”
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—Treasury Secretary Janet Yellen on CBS's Face the Nation on Sunday, commenting on the collapse of Silicon Valley Bank
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