Follow Voice of America - Economy, filter it, and define how you want to receive the news (via Email, RSS, Telegram, WhatsApp etc.) https://follow.it/voanews4 Wed, 22 Mar 2023 12:06:08 +0200 https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt9MSAVqYW9DRnn9ye8UNv30 The International Monetary Fund has approved a nearly $3 billion financial rescue package for Sri Lanka after several months of negotiations with the economically troubled South Asian island nation.    The IMF announced Monday that it will immediately release about $333 million to Colombo. The institution said Sri Lanka must undertake a set of economic reforms and anti-corruption strategies as part of the bailout agreement.  The rescue package was approved only after China, India and Japan, Sri Lanka’s biggest international creditors, agreed to a debt restructuring strategy.   Sri Lankan President Ramil Wickremesinghe’s office issued a statement saying the agreement will bring in up to $7 billion from the IMF and other international financial institutions. President  Wickremesinghe has already pushed through a number of economic reforms, including raising income taxes and ending generous subsidies for fuel and electricity.   Sri Lanka’s tourism-dependent economy was devastated by the COVID-19 pandemic, as well as a set of disastrous decisions made by former President Gotabaya Rajapaksa, which depleted its foreign exchange reserves and left it unable to import food, fuel or medicines. Sri Lankans had to endure days of lengthy power outages  The crisis sparked a popular and often violent uprising that led Gotabaya Rajapaksa to flee Sri Lanka and resign from office, effectively ending his family’s two-decade hold on political power. His brothers Mahinda and Basil also quit their posts as prime minister and finance minister, respectively, amid the anti-government demonstrations.     Some information for this report came from The Associated Press, Reuters, Agence France-Presse.  ]]> Tue, 21 Mar 2023 10:59:38 +0200 https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt9MSAVqYW9DRnn9ye8UNv30 https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt9WO7f16geMvZs0ohxaO6Yr Amazon plans to eliminate 9,000 more jobs in the next few weeks, CEO Andy Jassy said in a memo to staff Monday.  The job cuts would mark the second largest round of layoffs in the company's history, adding to the 18,000 employees the tech giant said it would lay off in January. The company's workforce doubled during the pandemic, however, during a hiring surge across almost the entire tech sector.  Tech companies have announced tens of thousands of job cuts this year.  In the memo, Jassy said the second phase of the company's annual planning process completed this month led to the additional job cuts. He said Amazon will still hire in some strategic areas.  "Some may ask why we didn't announce these role reductions with the ones we announced a couple months ago. The short answer is that not all of the teams were done with their analyses in the late fall; and rather than rush through these assessments without the appropriate diligence, we chose to share these decisions as we've made them, so people had the information as soon as possible," Jassy said.  The job cuts announced Monday will hit profitable areas for the company including its cloud computing unit AWS and its burgeoning advertising business. Twitch, the gaming platform Amazon owns, will also see some layoffs as well as Amazon's PXT organizations, which handle human resources and other functions.  Prior layoffs had also hit PXT, the company's stores division, which encompasses its e-commerce business as well as the company's brick-and-mortar stores such as Amazon Fresh and Amazon Go, and other departments such as the one that runs the virtual assistant Alexa.  Earlier this month, the company said it would pause construction on its headquarters building in northern Virginia, though the first phase of that project will open this June with 8,000 employees.  Like other tech companies, including Facebook parent Meta and Google parent Alphabet, Amazon ramped up hiring during the pandemic to meet the demand from homebound Americans that were increasingly making purchases online.  Amazon's workforce, in warehouses and offices, doubled to more than 1.6 million people in about two years. But demand slowed as the worst of the pandemic eased. The company began pausing or canceling its warehouse expansion plans last year.  Amid growing anxiety over the potential for a recession, Amazon in the past few months shut down a subsidiary that's been selling fabrics for nearly 30 years and shuttered its hybrid virtual, in-home care service Amazon Care among other cost-cutting moves.  Jassy said Monday given the uncertain economy and the "uncertainty that exists in the near future," the company has chosen to be more streamlined.  He said the teams that will be impacted by the latest round of layoffs are not done making final decisions on which roles will be eliminated. The company plans to finalize those decisions by mid- to late April and notify those who will be laid off. ]]> Mon, 20 Mar 2023 23:36:38 +0200 https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt9WO7f16geMvZs0ohxaO6Yr https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt_eHRz7ABrPjHn9ye8UNv30 UBS is set to take over its troubled Swiss rival Credit Suisse for $3.25 billion following weekend crunch talks aimed at preventing a wider international banking crisis, but Asian equities sank Monday on lingering worries about the sector.    The deal, in which Switzerland's biggest bank will take over the second largest, was vital to prevent economic turmoil from spreading throughout the country and beyond, the Swiss government said.    The move was welcomed in Washington, Frankfurt and London as one that would support financial stability, after a week of turbulence following the collapse of two U.S. banks.    After a dramatic day of talks at the finance ministry in Bern — and with the clock ticking towards the markets reopening on Monday — the takeover was announced at a news conference.    Swiss President Alain Berset was flanked by UBS chairman Colm Kelleher and his Credit Suisse counterpart Axel Lehmann, along with the Swiss finance minister and the heads of the Swiss National Bank (SNB) and the financial regulator FINMA.    The wealthy Alpine nation is famed for its banking prominence and Berset said the takeover was the "best solution for restoring the confidence that has been lacking in the financial markets recently".    If Credit Suisse went into freefall, it would have had "incalculable consequences for the country and for international financial stability", he said.    Credit Suisse said in a statement that UBS would take it over for "a merger consideration of three billion Swiss francs ($3.25 billion)".    After suffering heavy falls on the stock market last week, Credit Suisse's share price closed Friday at 1.86 Swiss francs, with the bank worth just over $8.7 billion.    UBS said Credit Suisse shareholders would get 0.76 Swiss francs per share.    "Given recent extraordinary and unprecedented circumstances, the announced merger represents the best available outcome," Lehmann said.    Asian equities still fell in early trade Monday, with Hong Kong, Tokyo, Sydney, Seoul and Singapore all in the red.    Hong Kong's monetary authority sought to calm jitters Monday morning, saying that "exposures of the local banking sector to Credit Suisse are insignificant", as the bank's assets make up "less than 0.5 percent" of the city's banking sector.     Despite that, the city's banking stocks tumbled: HSBC dropped six percent, Standard Chartered shed five percent and Hang Seng Bank gave up nearly two percent, in line with a global sell-off in the sector on worries about lenders' exposure to bonds linked to Credit Suisse.    "Uncertainty could remain high for quite some time, even if recent bank support measures succeed," said analyst Stephen Innes of SPI Asset Management.      'Huge collateral damage' risk     Swiss Finance Minister Karin Keller-Sutter said that bankruptcy for Credit Suisse could have caused "huge collateral damage".     With the "risk of contagion" for other banks, including UBS itself, the takeover has "laid the foundation for greater stability both in Switzerland and internationally", she said.    The deal was warmly received internationally.    The decisions taken in Bern "are instrumental for restoring orderly market conditions and ensuring financial stability," said European Central Bank chief Christine Lagarde.    "The euro area banking sector is resilient, with strong capital and liquidity positions."    U.S. Federal Reserve chair Jerome Powell and Treasury Secretary Janet Yellen said in a joint statement: "We welcome the announcements by the Swiss authorities today to support financial stability."    The sentiment was echoed by British Finance Minister Jeremy Hunt.    The Fed and the central banks of Canada, Britain, Japan, the EU and Switzerland announced they would launch a coordinated effort Monday to improve banks' access to liquidity.    The SNB announced 100 billion Swiss francs of liquidity would be available for the UBS-Credit Suisse takeover.    Keller-Sutter insisted the deal was "a commercial solution and not a bailout".   UBS chairman Kelleher said: "We are committed to making this deal a great success. UBS will remain rock solid."    Job worries    The takeover creates a banking giant such as Switzerland has never seen before — and raises concerns about possible layoffs.    The Swiss Bank Employees Association said there was "a great deal at stake" for the 17,000 Credit Suisse staff, plus tens of thousands of jobs outside of the banking industry potentially at risk.    Like UBS, Credit Suisse was one of 30 worldwide Global Systemically Important Banks — deemed of such importance to the international banking system that they are colloquially called "too big to fail".    But the markets saw the bank as a weak link in the chain.    Amid fears of contagion after the collapse of two U.S. banks, Credit Suisse's share price plunged by more than 30% on Wednesday to a record low of 1.55 Swiss francs. That saw the SNB step in overnight with a $54-billion lifeline.    After recovering some ground Thursday, its shares closed down 8% on Friday at 1.86 Swiss francs, as it struggled to retain investor confidence.    In 2022, the bank suffered a net loss of $7.9 billion and expects a "substantial" pre-tax loss this year.    Credit Suisse's share price has tumbled from 12.78 Swiss francs in February 2021 due to a string of scandals that it has been unable to shake off. ]]> Mon, 20 Mar 2023 10:47:57 +0200 https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt_eHRz7ABrPjHn9ye8UNv30 https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt_VRwhRXHqhKSejEQ2Mq9rY When Caroline Sadaka buys groceries in the Lebanese capital Beirut, she keeps her phone in hand – not to check her shopping list but to calculate the spiraling costs of goods now priced at volatile exchange rates that vary by store and sector. As Lebanon's economy continues to collapse, an array of exchange rates for the local pound has emerged, complicating personal accounting and dimming hopes of fulfilling a reform requirement set out by the International Monetary Fund. The government's official exchange rate was set at 15,000 pounds to the U.S. dollar in February, a nearly 90% devaluation from the longtime peg of 1507.5. But the Central Bank is selling dollars at a rate of 79,000 to the greenback while the finance minister intends to calculate tariffs for imported goods at 45,000 pounds. The parallel market rate is meanwhile hovering around 107,000 pounds and changing daily. Supermarkets and fuel stations are required to post signs with the value they’ve adopted for the day, but the rate is changing so fast that many are pricing in the relatively stable U.S dollar instead. Examining a can of tuna, Sadaka illustrated the daily quandary faced by shoppers. "This doesn't have a (logical) price. If you look, it's in Lebanese pounds, so is this the price? Or is this an old price, and there's now a price in dollars?," she wondered. She quit her job as a school teacher which paid her in local currency, the value of which has decreased by more than 98% against the dollar on the parallel market since 2019. That's when the economy began unravelling after decades of unsound financial policies and alleged corruption. To solve the exchange rate confusion, the government needs to implement one unified rate. This is among pre-conditions set by the International Monetary Fund nearly a year ago for Lebanon to get a $3 billion bailout. But the lender of last resort says reforms have been too slow. They have met resistance from politicians who are shielding vested interests and dodging accountability. In the meantime, the country has been moving towards a cash-based and dollarized economy given spiralling inflation and restrictions by banks on transactions. Shop owner Mahmoud Chaar told Reuters the exchange rate was changing so fast that his business was losing money overnight. Like many business owners, Chaar has to pay in U.S. dollars to import goods but sells in Lebanese pounds. One day, he had sold all his goods based on one rate but woke up the next to find it had jumped nearly 10,000 pounds per U.S. dollar. "Basically, we lost in the exchange rate difference what we had made in profit," Chaar told Reuters. Economist Samir Nasr said the varying rates across sectors were making personal accounting "messy" for Lebanese and unifying them was more urgent than ever. "What is required is a full group of reforms and steps that will allow for the economic situation to stabilize in general - and would then allow the exchange rate to be unified," he said.]]> Sun, 19 Mar 2023 13:07:38 +0200 https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt_VRwhRXHqhKSejEQ2Mq9rY https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt9-5okCFIVdiHn9ye8UNv30 When the U.S. government announced this month that it had stepped in to take over Silicon Valley Bank (SVB) and Signature Bank, it was a 90-year-old Great Depression-era agency that took the lead in assuring depositors that their funds were safe and quelling a bank run that threatened broader damage to the industry. The Federal Deposit Insurance Corp. took control of SVB on March 10 and Signature Bank two days later, moves that rendered the publicly traded stock of both institutions worthless but preserved other assets for distribution to account holders and each bank's creditors. In a decision some found surprising, the FDIC announced that all deposits held at both banks would be fully guaranteed. Historically, depositors have been protected up to $250,000, a limit designed to keep the overwhelming majority of individual depositors safe from loss. The agency decided, however, that to prevent "contagion" — panic about one failing bank spreading to broader panic about others — it would make all depositors whole. The decision was also likely motivated by the fact that many businesses, primarily in the tech sector, kept large accounts at SVB that they used to meet payroll and ordinary business expenses. The impact of so many companies suddenly being unable to pay thousands of employees would have been hard to estimate but could have potentially damaged the economy. The FDIC and the Biden administration were quick to deny that the two banks had been the subjects of a "bailout," stressing that bank executives had been fired, stockholders' equity had been wiped out, and any funds supplied by the agency to make depositors whole would come from an insurance fund financed by premiums paid by insured banks. The FDIC, however, will have to raise assessments on banks to replenish what money it spends on the resolution of SVB and Signature. Banks will likely pass these costs on to their customers by charging higher fees or increasing interest on loans.   History of the FDIC The FDIC was created in 1933, after the U.S. weathered years of panic during the Great Depression, which led to the closures of thousands of banks. Between 1921 and 1929, approximately 5,700 banks across the U.S. failed, some because of poor management and many because depositors lost confidence and demanded withdrawals so rapidly that the banks simply ran out of cash. Things worsened between 1929 and 1933, when nearly 10,000 banks across the country failed. During a particularly difficult week in February 1933, bank panics were so pervasive that governors in almost all U.S. states acted to temporarily close all banks. The FDIC was created in the aftermath of that crisis, when the federal government finally acted on a long-delayed plan to establish national deposit insurance. The agency originally guaranteed individual deposits of up to $2,500, a level that has been periodically increased over the decades. The agency is funded by premiums that banks and savings associations pay for deposit insurance coverage. It is managed by a board of five presidential appointees. The current chair of the FDIC is Martin J. Gruenberg. By statute, the director of the Consumer Financial Protection Bureau and the Comptroller of the Currency, whose agency supervises nationally chartered banks, are also members. Two other appointees round out the board, which cannot have more than three members of the same political party. In its nine decades, the FDIC has closed hundreds of failed banks, but insured deposits have always been repaid in full. Promoting financial stability "The mission of the FDIC is to promote financial stability," said Diane Ellis, the former director of the agency's Division of Insurance and Research. "The FDIC does that by exercising several authorities. One is to provide deposit insurance so that bank depositors can be confident that they'll get their money back regardless of what happens with their bank." In addition, the agency has the authority to "resolve" failed banks, which can involve selling the bank outright to another institution, creating a "bridge" bank that provides ongoing services to depositors while the agency works toward a resolution, or selling off the bank's assets to return as much money as possible to depositors whose holdings exceed the coverage limit. Ellis, now a senior managing director at the banking network IntraFi, noted that the agency also has oversight authority over the banks it insures. "For open banks, examiners conduct regular examinations to make sure banks are operating in a safe and sound manner … promoting a healthy, stable banking system, which is important for economic growth," she told VOA.   Avoiding 'moral hazard' When the FDIC was established, capping the standard insurance amount per depositor was a central feature of its design. The creators of the agency were concerned about a problem called "moral hazard." They worried that if the federal government guaranteed 100% of deposits, individuals and businesses would fail to exercise due diligence when deciding what banks to trust with their money, and that lack of scrutiny would result in banks taking excessive risks. "Legislators wanted to strike a balance, to protect people up to a certain amount, but not everything, so that there'd be an incentive for people to make sure that their money was in a safe bank rather than a dangerous one," said John Bovenzi, who served as chief operating officer and deputy to the chairman of the FDIC from 1999 to 2009. Bovenzi, the co-founder of the Bovenzi Group, a financial services consultancy, told VOA that he was initially surprised by the decision of the FDIC and other regulators to make all uninsured depositors whole. "These weren't the largest institutions. Silicon Valley and Signature, they were in sort of a second tier and weren't viewed as 'too big to fail,'" he said. However, Bovenzi said, it soon became apparent to regulators that there were other banks in the country that operated with business models similar to that of SVB, which had large amounts of low-interest securities on its books, the value of which was being systematically undercut by the Federal Reserve's decision to raise interest rates dramatically over the past year. "What happened was that they saw there was too much spillover effect to other institutions, so they invoked what's called a 'systemic risk exception,'" he said. Had this not been the case, he said, the FDIC would have had to conduct the closing in a way that resulted in the least cost to it and the government to save money, "and that would have meant uninsured taking losses. By protecting the uninsured, the FDIC raises its own costs to cover it. And so it needed to say, 'We don't want to do it for the institution, but we need to do it for the system.'" Setting a precedent The decision to protect all deposits at SVB and Signature was not unique. During the financial crisis sparked by widespread defaults in the subprime mortgage sector from 2007 to 2010, regulators shuttered several hundred banks in the space of a few years, and implemented a policy of protecting all deposits to avoid increasing the damage to the broader economy. The decision to do so for SVB and Signature, though, absent such a widespread crisis, has raised questions about whether a precedent has been set that will lead depositors to expect to be rescued by the government if their bank fails. In testimony before Congress Thursday, Treasury Secretary Janet Yellen warned that the treatment of SVB and Signature should not be taken as a signal that similar protection will be extended to other banks in the future. Such action, she said, would take place only when "failure to protect uninsured depositors would create systemic risk and significant economic and financial consequences."]]> Sun, 19 Mar 2023 09:25:55 +0200 https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt9-5okCFIVdiHn9ye8UNv30 https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt8RiEziyPWvpSejEQ2Mq9rY The collapse of Silicon Valley Bank has caused panic not just in the U.S. tech industry but also in China, where the bank has been a key player for years among Chinese startups. In recent days, many startups in China have issued statements to reassure their investors that their deposits with SVB will not impact their operations. Before the bank failed and was taken over by U.S. regulators this month, Silicon Valley Bank was the 16th-largest American bank. In foreign markets, SVB’s reputation for financing about half of all U.S. venture-backed technology and health care companies made it a popular choice for companies, including those based in China and backed by U.S. venture capitalists. BeiGene, one of China's largest biotech companies that specializes in the development of cancer drugs, said that the collapse of SVB would have “no major impact” on its operations, and that its uninsured cash deposits in Silicon Valley Bank totaled only $175 million, or about 3.9% of its cash and other investments. Zai Lab, a biopharmaceutical company headquartered in Shanghai, issued a statement saying that SVB’s collapse would have no impact on its operations, including the ability to pay wages and make payments to third parties. Other startups, including Andon Health, Sirnaomics, Everest Medicines and Jacobio Pharma, have issued similar statements. After SVB failed, the Biden administration stepped in and ensured that all customers would be able to get their deposits back, even those who had more than $250,000 in their accounts. That’s the maximum amount that the Federal Deposit Insurance Corporation typically covers when a bank fails, but more than 90% of Silicon Valley Bank accounts were above that amount. With their SVB deposits frozen, many companies could have been at risk of failing themselves, so the Biden administration said it would step in to guarantee they would get their funds back. FDIC reimbursements for Chinese customers? On Chinese social media, there has been concern that the reimbursements may apply only to customers in America. "Is it true that only depositors who are U.S. citizens can get their money back? What about us?" asked one post on Weibo, the Chinese version of Twitter. William Hanlon, a partner at Seyfarth Shaw LLP, told VOA Mandarin in an email that the FDIC as receiver “will not categorize account holders by nationality” and “will treat all depositors equally based on their status as depositors.” David M. Bizar, another partner at Seyfarth Shaw, said the FDIC is continuing to operate SVB as a full-service bridge bank while it searches for buyers of the bank's assets. “It can be expected that the United States will continue to maintain these deposit accounts and keep them from losing their value so long as it maintains them in its receivership, and that the FDIC as receiver will not sell these deposit accounts to purchasers who would be permitted under the sale agreements to reduce their values after the transfers,” he told VOA. So far, several Chinese companies have publicly said they were able to withdraw all their deposits at SVB. SVB’s role in China The now-failed SVB carved out a unique role in the Chinese banking scene. It served roughly 2,200 clients and advised government regulators who were eager to build the country’s tech sector. The Santa Clara, California-based bank supported startup companies that not all banks, especially the big commercial ones in China, would accept because of higher risks. In 2010, then-CEO Ken Wilcox brought the entire board of directors to China to showcase the importance he attached to the China market, according to Chinese media reports. In a 2019 interview, when he was SVB’s chief credit officer, he said SVB was “a model bank for China.” SVB approached China in two different ways. One involved wholly owned operations in major tech centers, including Beijing, Shenzhen and Shanghai, where it advised startups on how to manage overseas funding. The other involved a 50-50 joint-venture with Shanghai Pudong Development Bank, also known as SPD Silicon Valley bank, that operates under a similar model as SVB. Following the collapse of SVB, the Chinese policymakers signaled stricter oversight to improve financial market security. The South China Morning Post quoted Liu Xiaochun, deputy director of the Shanghai Finance Institute, as saying it was inappropriate to set up a similar specialist bank in China. He argued that to avoid potential losses in supporting tech and health startups, large commercial banks should establish branches to finance innovation, while managing risk exposure at headquarters.]]> Sat, 18 Mar 2023 01:13:44 +0200 https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt8RiEziyPWvpSejEQ2Mq9rY https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt_o0YabS6D0vOzdsCmHakzH China's central bank on Friday announced a cut to the amount of cash banks are required to hold in reserve for the first time this year, in a move designed to shore up an economy weakened by the pandemic. The People's Bank of China (PBOC) said it would cut the reserve requirement ratio by 0.25 percentage point starting March 27, which would allow commercial banks to lend more to businesses. This would bring the weighted average reserve requirement ratio for financial institutions to around 7.6%, the central bank said. The PBOC said the latest cut was intended to "improve the level of service to the real economy." The rate was last cut in November, when the world's second-largest economy was heavily hit by strict COVID-19 curbs. China is still grappling with the fallout of its zero-COVID policy, which included harsh lockdowns and mass business closures, hitting supply chains and employment. The country has set an economic growth target of "around 5%" for 2023, one of the lowest in decades. Authorities reported a rebound in retail sales in January and February, after the country abandoned zero-COVID controls and a massive exit wave of infections quickly subsided. But Premier Li Qiang has warned that the growth target was "not easy" to achieve as a grinding property crisis continued and global demand slowed.]]> Fri, 17 Mar 2023 23:36:04 +0200 https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt_o0YabS6D0vOzdsCmHakzH https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt9LpucyOydQcV1cWWor9YPv U.S. Treasury Secretary Janet Yellen told lawmakers on Thursday the U.S. banking system remains sound even though two regional banks failed in the last week. She told the Senate Finance Committee that Americans “can feel confident” their deposits “will be there when they need them.” Yellen said the government “took decisive and forceful actions to strengthen public confidence" in the U.S. banking system by ensuring that all depositors, including those holding uninsured funds exceeding $250,000, were protected by federal deposit insurance when Silicon Valley Bank and Signature Bank collapsed. Some critics of the government’s action have called it a bailout, but investors have lost their financial stakes in the two banks, something that would not occur in the normal definition of a bailout, and their executives have been fired. Senator Mike Crapo of Idaho, the committee's lead Republican, said, "I'm concerned about the precedent of guaranteeing all deposits," calling the federal rescue action a "moral hazard." "Nerves are certainly frayed at this moment," said Democratic committee chairman Senator Ron Wyden. "One of the most important steps the Congress can take now is make sure there are no questions about the full faith and credit of the United States," referring to raising the country’s $31.4 trillion debt ceiling in the next few months so the government can borrow more money to continue to pay its bills. Some Republicans have demanded large spending cuts in exchange for raising the debt ceiling, while the White House has requested passage of a debt limit increase that is not tied directly to spending cuts. Both Republican and Democratic lawmakers have said they will not cut health insurance and pensions for older Americans. Stock markets in both Europe and the U.S. rallied sharply Thursday after Credit Suisse announced it would borrow almost $54 billion from the Swiss central bank to shore up its finances.]]> Thu, 16 Mar 2023 20:37:16 +0200 https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt9LpucyOydQcV1cWWor9YPv https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt8wQeBz76nQp5VjH6qdYdAk Central African economy ministers are calling for investing in energy and farming as Africa's poorest region struggles to recover from natural disasters, armed conflicts, and fallout from Russia's invasion of Ukraine.  Heads of state from the six nations of regional bloc CEMAC meet Friday to discuss the challenges.  Economy and integration ministers of the Central African Economic and Monetary Community, CEMAC, say most of their 55 million civilians live in abject poverty that has only been made worse by the last few years of global troubles. Ministers of the six-nation-bloc, which includes Cameroon, the Central African Republic, Chad, Equatorial Guinea, Gabon, and the Republic of Congo, met Thursday in Yaoundé. President of CEMAC Daniel Ona Ondo, who was born in Gabon, said Russia’s invasion of Ukraine is the latest in a series of global disasters to impact the region. He said the ministers' meeting strongly recommended huge investments in agriculture and energy to end over dependency on imported food and petroleum products from Russia and Ukraine. Before Russia’s invasion of its neighbor, Central African states’ imports from Russia and Ukraine accounted for 60 percent of their fuel and 80 percent of their wheat. Last July, Cameroon, the Central African Republic, and Gabon reported fuel shortages they blamed on disruptions from Russia's war. CEMAC says the war caused a sharp increase in prices that member states paid for fuel and fertilizers and added pressure on the region’s farmers, who were already struggling from conflict and climate shocks. Ondo said armed conflicts and political unrest in the region also added to the challenge for economies to recover from the COVID-19 pandemic. Despite the setbacks, Cameroon's Minister of the Economy Alamine Ousman Mey voiced an optimistic outlook. Mey is also president of CEMACs council of ministers of the economy and integration. He said although central African states face many security and environmental shocks, and an influx of refugees and displaced persons, Cameroon, Chad, Equatorial Guinea, Gabon, the Central African Republic, and the Republic of Congo have shown resilience.  Mey said the economic growth rate was maintained at three percent in 2022.  He said CEMAC will always work for the interest of its people despite the challenging world economy and severe crises. The ministers said they will propose a plan for improving conditions through energy and farming when heads of state meet in Yaoundé on March 17. Ernest Moloua is an economist at the Cameroon’s University of Buea. He said the region's leaders should push harder for the free movement of people and goods as part of the African Continental Free Trade Area. Speaking via messaging app from Buea, he says the trade deal provides a lot of opportunities for CEMAC if the heads of state take it seriously. “The most important thing for CEMAC is to improve on public infrastructure, improve on the communication and telecommunication infrastructure, improvement of roads, improvement of railway links.  When this happens then the region places itself in an advantageous position to reap the benefits that will come from the continental free trade area," said Moloua. CEMAC says Friday's heads of state summit will focus on structural reforms to deal with the economic consequences of the COVID pandemic and Russia’s war on Ukraine.]]> Thu, 16 Mar 2023 16:41:03 +0200 https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt8wQeBz76nQp5VjH6qdYdAk https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt-FBTJ6dJrzPilmFkX7M1Jw The EU will reveal hotly debated proposals Thursday to boost spending on clean tech, possibly overcoming internal divisions to include nuclear energy in the mix, to confront growing industrial competition from the United States and China. Brussels wants to protect European businesses by prioritizing green technologies, including solar and wind, for more financing and greater regulatory freedom. The European Commission, the EU's executive arm, will publish draft plans for a Net Zero Industry Act on Thursday to meet its ambitious target to become a "climate neutral" economy with zero greenhouse gas emissions by 2050. The proposal was to be made public Tuesday, but a standoff in the commission over whether to include nuclear power, a low-carbon energy, delayed the announcement. Heated discussion was expected until the last minute. Another landmark draft regulation will also be unveiled on Thursday that aims to secure supplies of critical raw materials needed to make the most of the electrical products consumers use today, including smartphones and electric vehicles. Green technology production took on greater urgency after the United States unveiled a $370 billion "buy American" subsidy program for tax credits and clean energy subsidies, known as the Inflation Reduction Act (IRA) last year. European businesses have warned that lavish subsidies elsewhere alongside lower energy bills could tempt the continent's firms to Asia or North America, and EU officials have complained that the IRA will discriminate against Europe's industry. Matching subsidies The commission has toiled over a response to the IRA despite divisions in the 27-member bloc, with some countries arguing for looser subsidy rules to allow them to back their own firms with state aid, and others opposed over fears of triggering a subsidies war. Last week, the commission loosened state aid rules for green technology and allowed members to match subsidies offered in other states. The clean technology sector is expected to be worth $630 billion worldwide by 2030, more than three times current levels. Under draft proposals seen by AFP, the commission now wants at least 40% of green tech to be produced in the EU by 2030. This will be achieved, the commission hopes, by ensuring businesses obtain permits faster and says public tenders would be considered based on green criteria that could favor European companies. If nuclear is included as a green technology, that would be a victory for around a dozen countries including France, although there is stringent opposition from anti-nuclear Germany. Some have questioned the bloc's "protectionist" objectives. "The purpose of this law and how the draft was written is not to achieve faster decarbonization, but it's basically to reshore production and that is a protectionist goal," said Niclas Poitiers, research fellow at the Brussels-based Bruegel think tank. "This is about making sure that batteries and solar panels are produced in the EU." Commission President Ursula von der Leyen, however, this week dismissed such claims and insisted the proposal was in fact "a very open act.” 'Vulnerable' EU The EU also wants to meet the rapidly growing need for raw materials, much of which it currently imports from China, to avoid relying on one country for a specific product. When Moscow invaded Ukraine last year, the EU was brought to its knees by higher energy costs as Brussels raced to find fossil fuels elsewhere instead of Russia. "The EU's supply of raw materials is highly concentrated on a few countries... This makes us vulnerable to supply disruptions or aggressive actions," the bloc's internal market commissioner Thierry Breton said. According to the leaked proposals, the EU wants the bloc to meet 10% of the demand for mining and extraction of raw materials. It also says the EU should not rely on one single country for more than 70% of imports for any strategic raw material by 2030.]]> Thu, 16 Mar 2023 09:54:47 +0200 https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt-FBTJ6dJrzPilmFkX7M1Jw https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt9-4ccWan4j_5VjH6qdYdAk Credit Suisse announced Thursday that it would borrow almost $54 billion from the Swiss central bank to reinforce the group after a plunge in its share prices. The disclosure came just hours after the Swiss National Bank said capital and liquidity levels at the lender were adequate for a "systemically important bank," even as it pledged to make liquidity available if needed. In a statement, Credit Suisse said the central bank loan of up to $53.7 billion would "support... core businesses and clients," adding it was also making buyback offers on about $3 billion worth of debt. "These measures demonstrate decisive action to strengthen Credit Suisse as we continue our strategic transformation to deliver value to our clients and other stakeholders," CEO Ulrich Koerner said in the statement. "My team and I are resolved to move forward rapidly to deliver a simpler and more focused bank built around client needs." Credit Suisse, hit by a series of scandals in recent years, saw its stock price tumble off a cliff Wednesday after major shareholder Saudi National Bank declined to invest more in the group, citing regulatory constraints. Its shares fell more than 30% to a record low before regaining ground to end the day 24.24% down, at 1.697 Swiss francs. Credit Suisse's market value had already taken a heavy blow this week over fears of contagion from the collapse of two U.S. banks, as well as its annual report citing "material weaknesses" in internal controls. Mounting concerns Analysts have warned of mounting concerns over the bank's viability and the impact on the larger banking sector, as shares of other lenders sank Wednesday after a rebound the day before. Credit Suisse is one of 30 banks globally deemed too big to fail, forcing it to set aside more cash to weather a crisis. Neil Wilson, chief market analyst at trading firm Finalto, said Wednesday that if the bank did "run into serious existential trouble, we are in a whole other world of pain.” In February 2021, Credit Suisse shares were worth 12.78 Swiss francs, but since then, the bank has endured a barrage of problems that have eaten away at its market value. It was hit by the implosion of U.S. fund Archegos, which cost it more than $5 billion. Its asset management branch was rocked by the bankruptcy of British financial firm Greensill, in which some $10 billion had been committed through four funds. The bank booked a net loss of nearly $8 billion for the 2022 financial year. That came against a backdrop of massive withdrawals of funds by its clients, including in the wealth management sector -- one of the activities on which the bank intends to refocus as part of a major restructuring plan.]]> Thu, 16 Mar 2023 06:26:08 +0200 https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt9-4ccWan4j_5VjH6qdYdAk https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt8XCnS2H7fti3n9ye8UNv30 With fewer people coming to work at offices in Manhattan, New York City's commercial real estate market has lost about $400 billion dollars in value since the start of the pandemic. Aron Ranen has this story from the Big Apple.]]> Thu, 16 Mar 2023 03:13:18 +0200 https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt8XCnS2H7fti3n9ye8UNv30 https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt_aAYuBPxN1Dnn9ye8UNv30 Stock markets in Europe and the U.S. tumbled Wednesday as investors worried about the stability of global banking systems in the immediate aftermath of the collapse of two American banks. Major stock indexes in London, Paris and Frankfurt all plunged by more than 3% while three key U.S. indexes — the Dow Jones Industrial Average of 30 key stocks, the broader S&P 500 index and the tech-heavy Nasdaq index — also dropped, although by 1% or less in late-day trading. Asian markets increased, mirroring Tuesday gains in the U.S. The newest worries centered on Credit Suisse, with shares for the beleaguered Swiss lender falling more than 17% after its biggest shareholder, the Saudi National Bank, said it would not invest more money in it. Problems at Credit Suisse, with outlets in major global financial centers, predated the U.S. government takeover of operations at Silicon Valley Bank and Signature Bank in the last week. Credit Suisse said Tuesday that managers had identified “material weaknesses” in the bank’s internal controls on financial reporting as of the end of last year. But on Wednesday, Credit Suisse chairman Axel Lehmann, speaking at a financial conference in the Saudi capital of Riyadh, defended the bank’s operations, saying, “We already took the medicine” to reduce risks. “We are regulated. We have strong capital ratios, very strong balance sheet. We are all hands on deck.” But with the drop in the share price for Credit Suisse, bank stocks in Britain, France and Germany also fell sharply, although not by as much as for Credit Suisse. S&P Global Ratings said on Tuesday that the failures at the two U.S. banks would have little effect on the fortunes of European banks. But the S&P analysts added, “That said, we are mindful that SVB’s failure has shaken confidence.” Share prices of other U.S. regional banks like Silicon Valley have fallen sharply in recent days. Some information for this report came from The Associated Press.]]> Wed, 15 Mar 2023 22:27:27 +0200 https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt_aAYuBPxN1Dnn9ye8UNv30 https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt8Pkngorh9oZSlmFkX7M1Jw In the early days of the COVID-19 pandemic, nurses, truck drivers, grocery clerks and other essential workers were hailed as heroes. "Now we are vilifying them … and this has long-term ramifications for our well-being," said Manuela Tomei, International Labor Organization assistant director-general for governance, rights, and dialogue. "The work that these persons perform is absolutely essential for families and societies to function," she said, speaking Wednesday in Geneva. "So, the non-availability of their services would really result into a loss of well-being and the impossibility of ensuring safe lives to society at large." And yet a new study by the International Labor Organization (ILO) finds essential workers are undervalued, underpaid and laboring under poor working conditions, exposed to treatment that "exacerbates employee turnover and labor shortages, jeopardizing the provision of basic services." The U.N. agency's report classifies key workers into eight main occupation groups covering health, food systems, retail, security, cleaning and sanitation, transport, manual, and technical and clerical occupations. Data from 90 countries show that during the COVID-19 crisis key workers suffered higher mortality rates than non-key workers overall, with transport workers being at highest risk. The report found 29% of key workers globally are low paid, earning on average 26% less than other employees. It reports they tend to work long, unpredictable hours under poor conditions. Tomei said inaction in improving sub-standard conditions of work is having consequences today. "In a number of countries, these sectors are facing some labor shortages because people are increasingly reluctant to engage in work which is not fairly valued by society and rewarded in terms of better pay and also improved working conditions. "So, we are facing a crisis right now," she added. Richard Samans, director of the ILO research department, noted that a critical shortage of nurses in many countries is of particular concern. "This affects the very life of people," he said Wednesday. "Many people in countries are facing long delays in treatment. In the event of a shock — some sort of a major health disruption or natural disaster or otherwise — if the system is already strained, it cannot handle the major influx of demand for those nursing services." A new report by the World Health Organization warns the "widespread disruptions to health services" due to the COVID-19 pandemic "has resulted in a rapid acceleration in the international recruitment of health professionals," mainly from poor to rich countries, exacerbating shortages of this vital workforce in developing countries. The ILO reports that countries are still experiencing supply shortages three years after WHO declared COVID-19 a pandemic. ILO research director Richard Samans attributes this to a scarcity of truck drivers due to lack of training and bad working conditions. "In the event of a shock that increases the demand for certain types of products and services, if the underlying logistical infrastructure is not fit for purpose, then that affects the daily livelihood of people and, in some cases, their health and well-being," he said. The ILO report also says key workers fare worse than non-key workers in both wealthy and poor countries, but ILO senior economist Janine Berg said the problems are worse in low-income countries. "There are particularly severe problems, for example, in agricultural work in low-income countries, and the entire agricultural food chain is part of the key worker definition," she said. "There are also very severe problems in lower-income countries with respect to very low coverage in social protection." The report urges nations to identify gaps in decent work and develop national strategies to address the problems facing key workers through strengthened policies and investment. Among its recommendations, the report calls on governments to reinforce occupational health and safety systems, improve pay for essential workers, guarantee safe and predictable working hours through regulation, and increase access to training so that key workers can carry out their work effectively and safely.]]> Wed, 15 Mar 2023 17:44:46 +0200 https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt8Pkngorh9oZSlmFkX7M1Jw https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt81yvf9NiRxreT5HJgy6HUf Argentina’s annual inflation rate breached the 100% mark for the first time since 1991. The government’s statistics agency said Tuesday the yearly inflation rate for February rose to 102.5%, making it one of the highest in the world. The agency said consumer prices rose 6.6% last month compared to the same period a year ago, and a combined 13.1% for the first two months of this year. The sharp rise in the rate was due to an increase in the price for food and beverages, finishing up at 9.8% last month compared to January. Reports say the surge in consumer prices has defied numerous attempts by the government of President Alberto Fernandez to tame inflation, including a cap on the price of food and other goods. The soaring inflation rate has been blamed on a number of factors, including a flood of money into circulation by the central bank, along with a lingering heatwave and subsequent drought that has destroyed crops and impacted agricultural exports. The high inflation rate has further left the South American country mired in a lingering economic crisis. The International Monetary Fund has approved a $44 billion financial aid package for Argentina. Some information for this report came from Reuters.]]> Wed, 15 Mar 2023 15:31:12 +0200 https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt81yvf9NiRxreT5HJgy6HUf https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt-FSCbteGVvtiejEQ2Mq9rY They are perhaps the two most feared words for regulators of the financial industry: Bank run. And that is what happened last week when depositors, during a single day, withdrew $42 billion from California-based Silicon Valley Bank (SVB), leaving it with a negative cash balance of a billion dollars. “This was the first Twitter-fueled bank run,” is how Republican Representative Patrick McHenry, chair of the House Financial Services Committee, described the tsunami of withdrawals. Depositors and others began speculating on social media about the bank’s health after CEO Greg Becker sent a letter to shareholders on March 8, revealing a loss of $1.8 billion on the sales of U.S. treasuries [debt obligations issued by the government to raise cash] and mortgage-backed securities. Becker outlined his quest to find more than $2 billion to stabilize the bank. The letter was the catalyst for the second-largest failure of a financial institution in U.S. history and the first such collapse since an economic recession in the country 15 years ago. As SVB was sinking, regulators in the state of New York suddenly shut down Signature Bank, known as friendly to the unstable cryptocurrency industry, after panic withdrawals there totaling $10 billion brought it to the brink of insolvency. Some of Signature Bank’s biggest customers were the top crypto exchanges, which individually had hundreds of millions of dollars in deposits. The bank runs threatened to expand, with individuals across the country whose deposits were more typically in the thousands of dollars and not millions of dollars wondering if their money was safe. Regional banks were especially vulnerable as their stock prices plummeted. “If the damage had spread across our financial system, the deposits and savings of tens of millions of families and small businesses could have been at serious risk,” Majority Leader Chuck Schumer said on the Senate floor Tuesday. The government corporation Federal Deposit Insurance Corporation (FDIC) stepped in with unprecedented action. Most bank customers know the FDIC from its logo displayed at branches with the written assurance: “Each depositor insured to at least $250,000.” Such a limit is likely to cover the potential losses of most individual depositors in America, but Silicon Valley Bank’s well-heeled customers were high-tech startups and entrepreneurs with far larger deposits. The FDIC decided that the customers of SVB and Signature would be made whole, no matter how much money they had in either of those banks. This restored consumer confidence, and there have been no additional runs on American banks. But the decision was perceived by some as a bailout for the wealthy. “No losses will be borne by the taxpayers,” President Joe Biden said on Monday. That is technically correct, as the FDIC is cashing out depositors from a pool of money that all insured banks are required to pay into. But “it is most definitely a bailout,” said Thomas Hoenig, distinguished senior fellow at George Mason University’s Mercatus Center and a former vice chairman of the FDIC. “This is where the market discipline breaks down,” Hoenig said. On its website, the FDIC touts its track record: “No depositor has ever lost a penny of insured deposits since the FDIC was created in 1933.” The FDIC was formed as an independent agency during the Great Depression after a wave of bank runs led to the failure of thousands of financial institutions in the early 1930s, wiping out the savings of many Americans at a time of high unemployment. “The FDIC was considered pretty radical at the time,” Hoenig told VOA. He noted that even President Franklin D. Roosevelt initially was uneasy about setting up a deposit insurance fund because of concern “about the moral hazard issue that people would not pay attention to what a bank was doing.” A sister organization, the Federal Savings and Loan Insurance Corporation, was set up to protect depositors at non-commercial banks. The FSLIC and its parent agency, the Federal Home Loan Bank Board, eventually went bankrupt and were dissolved in 1989. The FDIC now is available to ensure those smaller thrift institutions, while the government-backed National Credit Union Administration, a successor to the Bureau of Federal Credit Unions, was established in 1970 to exclusively protect those depositors. An FDIC bankruptcy “is always a possibility,” according to Hoenig. But the FDIC effectively has a line of credit from the U.S. Treasury it could access if there were to be massive bank failures and it ran out of money. Right now, Hoenig noted, the FDIC has $100 billion in its fund. But that is against about $20 trillion in banking deposits. Hoenig cautions, “You really don’t want to be bailing out everyone every time, or you might as well just make these institutions public utilities.”]]> Wed, 15 Mar 2023 03:48:38 +0200 https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt-FSCbteGVvtiejEQ2Mq9rY https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt-snMWkSe73TJVjH6qdYdAk According to recent studies, working four days a week instead of five can improve people's overall wellness. The challenge, however, is whether businesses can maintain the same level of productivity in shorter periods of time. VOA's Veronica Balderas Iglesias spoke with those who have experimented with the formula.]]> Tue, 14 Mar 2023 19:34:01 +0200 https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt-snMWkSe73TJVjH6qdYdAk https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt9zb_IL1XUiUpVjH6qdYdAk Illegal fishing, a multibillion-dollar industry closely linked to organized crime, is set to pose a greater threat to global security as climate change warms the world's oceans, according to a report by the Royal United Services Institute, a research organization based in London, in partnership with The Pew Charitable Trust. Illegal, unreported and unregulated, or IUU, fishing is worth up to $36.4 billion annually, according to the report, representing up to a third of the total global catch. Fish stocks As climate change warms the world's oceans, fish stocks are moving to cooler, deeper waters, and criminal operations are expected to follow. "IUU actors and fishers in general will be chasing those fish stocks as they move. And there's predictions, or obviously concern, that they will move in across existing maritime boundaries and IUU actors will pursue them across those boundaries," report co-author Lauren Young told VOA. RUSI said that global consumption of seafood has risen at more than twice the rate of population growth since the 1960s. At the same time, an increasing proportion of global fish stocks have been fished beyond biologically sustainable limits. The report also highlights that fish play a key role in capturing carbon through feeding, so a decline in fish stocks itself could accelerate warming temperatures. Crime nexus "Climate change will impact in other ways, with impacts on coastal erosion as well, and that will have impacts on local small-scale fisheries. As their livelihoods become more vulnerable, they may begin engaging more in IUU practices like disruptive fishing practices or engaging in other type of criminal activity as well." "There is a nexus with other crime types as well, like narcotics, human trafficking and labor abuses," Young added. Many poorer countries do not have the capacity to police their waters. In parts of Africa and South America, foreign trawlers — including many vessels from China — have devastated fish stocks. Beijing denies its fleets conduct illegal fishing. The United States Coast Guard said in 2021 that IUU fishing had replaced piracy as the leading global maritime security threat. "If IUU fishing continues unchecked, we can expect deterioration of fragile coastal states and increased tension among foreign-fishing nations, threatening geo-political stability around the world," the document warned. US response The United States launched a sustainable fishing initiative in Peru and Ecuador in October. Project "Por la Pesca" is aimed at helping artisanal fishing in the face of depleted stocks caused by IUU fishing. "It's having a profound impact on stocks of fish, on the livelihoods of fisherpeople, on sustainability," U.S. Secretary of State Antony Blinken said on a visit to Peru in October. "We have many countries around the world where fishing is at the heart of their economy and the heart of their culture as well, where illegal, unreported, unregulated fishing is a real and growing challenge." South China Sea RUSI highlights the warming South China Sea as a flashpoint. Already, fishing grounds and maritime boundaries are hotly contested, with frequent armed confrontations. "Many relate to China's commitment to the nine-dash line, which is the country's self-declared sort of maritime boundary," said RUSI's Young. "And they enforce that through armed fishing militia. So that obviously plays into it a lot as well. But those existing tensions there are likely to be exacerbated by climate change. And that is in line with predictions of climate change being this kind of threat multiplier." Enforcement Earlier this month, United Nations member states agreed to the High Seas Treaty, aimed at protecting biodiversity by establishing vast marine protected areas. "Whilst it's a positive move with climate change that we're looking to protect more of the world's oceans, we need to improve our ability to actually monitor and enforce [the agreements] as well," Young said. The report authors call on governments and multinational bodies to tackle illegal fishing based on climate change predictions; enhanced vessel monitoring capabilities and tougher enforcement, with greater recognition on the role the industry plays in wider criminal networks.]]> Tue, 14 Mar 2023 17:50:31 +0200 https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt9zb_IL1XUiUpVjH6qdYdAk https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt9OlYt50AbKqHn9ye8UNv30 Facebook-parent Meta Platforms said on Tuesday it would cut 10,000 jobs, just four months after it let go 11,000 employees, the first Big Tech company to announce a second round of mass layoffs.  "We expect to reduce our team size by around 10,000 people and to close around 5,000 additional open roles that we haven’t yet hired," Chief Executive Officer Mark Zuckerberg said in a message to staff.   The layoffs are part of a wider restructuring at Meta that will see the company flatten its organizational structure, cancel lower priority projects and reduce its hiring rates as part of the move. The news sent Meta's shares up 2% in premarket trading.  The move underscores Zuckerberg's push to turn 2023 into the "Year of Efficiency" with promised cost cuts of $5 billion in expenses to between $89 billion and $95 billion.  A deteriorating economy has brought about a series of mass job cuts across corporate America: from Wall Street banks such as Goldman Sachs and Morgan Stanley to Big Tech firms including Amazon.com  and Microsoft.   The tech industry has laid off more than 280,000 workers since the start of 2022, with about 40% of them coming this year, according to layoffs tracking site layoffs.fyi.   Meta, which is pouring billions of dollars to build the futuristic metaverse, has struggled with a post-pandemic slump in advertising spending from companies facing high inflation and rising interest rates.   Meta's move in November to slash headcount by 13% marked the first mass layoffs in its 18-year history. Its headcount stood at 86,482 at 2022-end, up 20% from a year ago. ]]> Tue, 14 Mar 2023 16:59:49 +0200 https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt9OlYt50AbKqHn9ye8UNv30 https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt-RQ3z9ula_wilmFkX7M1Jw U.S. consumer prices increased in February amid sticky rental housing costs, but economists are divided on whether rising inflation will be enough to push the Federal Reserve to hike interest rates again next week after the failure of two regional banks. The Consumer Price Index (CPI) rose 0.4% last month after accelerating 0.5% in January, the Labor Department said on Tuesday. That lowered the year-on-year increase in the CPI to 6.0% in February, the smallest annual gain since September 2021. The CPI rose 6.4% in the 12 months through January. The annual CPI peaked at 9.1% in June, which was the biggest increase since November 1981. Excluding the volatile food and energy components, the CPI increased 0.5% after rising 0.4% in January. In the 12 months through February, the so-called core CPI gained 5.5% after advancing 5.6% in January. Economists polled by Reuters had forecast both the CPI and core CPI climbing 0.4% on a monthly basis. Monthly inflation is rising at double the rate that economists say is needed to bring inflation back to the Fed's 2% target. The inflation report was published amid financial market turmoil triggered by the collapse of Silicon Valley Bank in California and Signature Bank in New York, which forced regulators to take emergency measures to shore up confidence in the banking system. It was also released before the Fed's policy meeting next Tuesday and Wednesday, and followed a report last Friday showing a still-tight labor market, but cooling wage inflation. Economists said Tuesday's report remained important for policymakers despite the angst in financial markets. Fed Chair Jerome Powell told lawmakers last week that the U.S. central bank would likely need to raise rates more than expected, leading financial markets to expect that a half-percentage-point rate increase was on the table next week. But those expectations were dialed back to 25 basis points after the employment report. While financial markets on Tuesday still expected a quarter-percentage-point hike, according to CME Group's FedWatch tool, fear of contagion from the banking crisis prompted some economists, including those at Goldman Sachs, to expect the Fed next week to pause its fastest monetary policy tightening cycle since the 1980s. The Fed has increased its benchmark overnight interest rate by 450 basis points since last March from the near-zero level to the current 4.50%-4.75% range.]]> Tue, 14 Mar 2023 16:14:57 +0200 https://api.follow.it/track-rss-story-click/v3/hAtoApeLNt-RQ3z9ula_wilmFkX7M1Jw