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UBS buys Credit Suisse for $3 billion when the tangible book value of Credit Suisse was $45 billion. Tangible book value means little says this report in the WSJ. More significant for investors was that Credit Suisse was losing billions each year and its governance, its investment banking activities were seen negatively. It either had to stop the losses or shrink quickly. Another lesson is that digital banking makes it easier to withdraw deposits and digital communication magnifies the damage. Bonds can be risker than stocks in this situation. Tier One capital ratios also mean little in this situation as both UBS and Credit Suisse had capital ratios of about 14.2. 

What is notable is that even the $3 billion UBS paid was seen as risky so that the Swiss government had to step in with a guarantee that it would provide $9 billion to cover losses after the first $5 billion in losses were taken by UBS, after that the losses would be split between the two.

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French president Macron now faces two no confidence motions one from the right wing parties led by Marine Le Pen and one from the  left wing parties led by Melenchon. Using Article 49 to push through raising the pension age to 64 was an action that bypassed parliament leading to this situation. Macron's action is seen as not appropriate to the moment when there is the cost of living crisis after a severe pandemic and energy shortages in Europe. Macron lacks a majority in parliament.

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Czech Republic Interior Minister Vit Rakusan says that the country has taken in over a half a million Czech refugees without overburdening or crashing our health and education systems. 100,000 have jobs in the labor market using admission mechanisms for this purpose and 50,000 children are in Czech schools. This puts the country at the forefront in taking in Ukraine refugees and integrating them in relation to its population.

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UBS buys Credit Suisse for $3 billion in a takeover arranged by the Swiss National Bank, central bank of Switzerland. The Swiss government also stepped in to provide 9 billion Swiss francs in support which would come into effect if UBS losses exceed 5 billion francs on this takeover. UBS CEO Colm Kelleher makes it clear that a very different Credit Suisse operation will emerge from this that will be "aligned to our conservative risk culture." Risk reduction for Credit Suisse will take place and its investment banking operations reduced, so that the combined operations in investment banking for both banks when integrated will be less than 20% of all its assets. The Swiss government waived shareholder approval because of the emergency nature of the takeover to calm financial markets when stock exchanges open on Monday.

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Xi Jinping visits Russia in an effort to start peace talks between Russia and Ukraine. The Russian leader wrote an article in a Chinese newspaper saying he was grateful for China's "balanced" stance on the conflict," and welcomed China's "constructive" role in ending the conflict. Xi Jinping wrote an article in a Russian newspaper Rossikaya Gazeta saying "complex problems do not have simple solutions."

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UK prime minister Sunak makes changes to policies of the UK post-Brexit that bring the UK closer to France and the European Union. This follows a deterioration of Britain's relations with the EU and France under Boris Johnson during the years Brexit happened. Sunak also comes up with a different policy for Northern Ireland closer to the EU's position. Mark Landler has covered Britain and the EU for NYT over three decades. He calls Boris Johnson's approach bombastic and one that made loud claims for "Global Britain" with little to show in results.

Sunak's challenges are in Britain with strikes across transportation, health sector and NHS, and the cost of living crisis. Labour party is seen as having better solutions and as more caring in its policies for both the environment, workers and families in 2023.

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During 2022 the San Francisco Federal Reserve Bank issued 6 warning citations to Silicon Valley Bank, saying that its bank practices did not allow for enough cash in the event of crisis. By July 2022 in a full supervisory review it was rated deficient for governance and controls. At a meeting with senior leaders of the bank the possible exposure to interest rate losses related to Fed increasing rates was also discussed says this report in NYT. The Fed regulators stated that the bank was using wrong models showing that SVB bank would do better as interest rates increased. Questions are being asked about why things that were in plain sight were overlooked by the regulators- 97% of deposits were uninsured by the federal government. In the event of a crisis depositors might try to get their deposits out causing a run on the bank which is what actually happened with $42 billion attempted withdrawals in one day. Michael Barr is the vice chair for Fed supervision. A investigation report is expected by May 1. March 29 the House Financial Services Committee will hold ahearing in Congress. Peter Conti-Brown, an expert on financial regulation at the University of Pennsylvania calls it failure of banking supervision, and says it will become clear from the investigation whether the supervisors failed in their work. One of the problems is that the CEO of SVB bank, Gregory Becker, was on the Board of the San Francisco Fed. NYT says the optics of this is bad. Bernie Sanders, Senator from Vermont, calls it absurd that he was appointed to the Fed board of the institution that was regulating SVB bank. Another problem is that Randall Quarles, vice chair of Fed supervision 2017-2021 carried out a 2018 regulatory roll back law of president Trump in an expansive way says NYT. This law exempted banks with less than $250 billion in assets from strict banking supervision that larger banks were expected to go through. Fed chairman Powell is criticized for not  flagging these steps as potentially dangerous for the banking system in the way this was done by vice chair Lael Brainard. Brainard is now head of Biden's National Economic Council. She never favored the Trump law and had grasped early the risks of such deregulation. Sanders will bring a new law to prevent bank CEO's from sitting on Fed boards, and Senator Elizabeth Warren has called for an independent review that does not include Powell.     ...

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The origins of Covid in a lab leak is now gaining credibility says this report in the NYT. Prior to this politics played a large part in shaping views on the origins of Covid. Each country presented its own version of events. Research in China was financed by the US according to the reports, was China unaware of the risks involved, what would have been the correct role of the US. Could China have provided the immediate cooperation to fight Covid in a concerted way. These questions remain unanswered and each country trying to present the situation in a public relations way overlooks the fact that both US, China and the rest of the world incurred significant once in a century loss of life with a pandemic. Solutions are meant to protect all the world's people, excluding none, including all, so that all countries benefit from this and benefit from the introspection of understanding where errors were made.

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Swiss regulators engineer UBS buying Credit Suisse for over $3 billion in an emergency rescue. This happened after the Swiss central bank made and infusion of $50 billion into Credit Suisse that failed to stabilize the Swiss bank. With outflows of $10 billion Swiss Francs in the week recently Swiss regulators had to quickly arrange UBS buying out Credit Suisse for over $3 billion.  In its early days in the nineteenth century Credit Suisse helped build the Swiss electricity grid and the Swiss rail system. After World War II it was part of the reconstruction effort in Europe. After 1990 it merged with banks in the US and engaged in international acquisitions, investment banking operations, and wealth management. This led to problems and the company had to make settlements for each of its businesses in the last three decades, leading to the current crisis. The bank is seen as lacking good governance, and taking on excessive risk in the pursuit of profit. A bank that was known for setting up key infrastructure in Switzerland in the nineteenth century succumbed to poor management and risk taking over one hundred years later as it fumbled in each of its businesses. ...

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Online digital libraries such as Internet Archive make it possible for older titles to be read by the public at no cost. Publishers have filed a lawsuit based on copyright law to prevent such digital library access.  Access to digital lending that helps public access educational content is the issue that is being tested in US courts.

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Hybrid work leads to an increase in super commuters who live and work in distant locations in the US, including multiple states. WSJ looks at super commuters.

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In December 2021 China's government ended tax cuts for buyers of automobiles, and ended long running electric vehicle subsidies. China's car sales are sluggish in 2023 leading to price cuts.

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A $50 billion infusion from the Swiss central bank does not stabilize Credit Suisse. The next step is for the Swiss central bank to arrange for UBS bank to take over Credit Suisse. For many years Credit Suisse management has taken outsize risks.