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China reappointed Yi Gang as head of the central bank Sunday to reassure entrepreneurs and financial markets by showing continuity at the top while other economic officials change during a period of uncertainty in the world’s second-largest economy.

Yi, whose official title is governor of the People’s Bank of China, plays no role in making monetary policy, unlike his counterparts in other major economies. His official duties lie in “implementing monetary policy,” or carrying out decisions made by a policymaking body whose membership is a secret.

But the central bank governor acts as spokesperson for monetary policy, is the most prominent Chinese figure in global finance and oversees reassuring bankers and investors at a time when China’s economy is emerging from drastically slower growth.

At the March 5 opening of the annual session of China’s rubber-stamp parliament, the National People’s Congress, China announced plans for a consumer-led revival of the struggling economy, setting this year’s growth target at “around 5%.”

Last year’s growth fell to 3%, the second-weakest level since at least the 1970s, putting president and head of the ruling Communist Party Xi Jinping under exceptional pressure to revitalize the economy.

A longtime veteran of monetary policy departments, Yi was first appointed governor of the People’s Bank of China in March 2018, taking over from the highly regarded Zhou Xiaochuan.

Before becoming governor, Yi spent 20 years at the central bank after getting his Ph.D. from the University of Illinois and working as a professor of economics at Indiana University from 1986 to 1994.

He is also a co-founder and professor at Peking University’s China Center for Economic Research.

The party made a similar decision to opt for continuity in 2013, when then-PBOC governor Zhou, who already had been in the job for a decade, stayed on as governor while all other economic regulators changed.

Yi’s reappointment came on the congress’s penultimate day, which also saw Xi loyalists appointed as finance minister and head of the Cabinet planning agency to carry out a program to tighten control over entrepreneurs, reduce debt risks and promote the state-led technology development. Incumbent Wang Wentao was reappointed minister of commerce.

The congress also named four vice premiers, individuals who may be in line for higher office. They include sixth-ranking member of the party’s all-powerful Politburo Standing Committee, Ding Xuexiang, as vice premier overseeing administrative matters. Veteran bureaucrats He Lifeng, Zhang Guoqing and Liu Guozhong were also named to the post. Liu and Zhang were incumbents.

Foreign Minister Qin Gang was also appointed to the position of state councilor, a position also held by Wang Yi, his predecessor and current superior as director of the party’s Office of the Central Foreign Affairs Commission.

Defense Minister Li Shangfu, an aerospace engineer by training, was also named one of the five state councilors, along with Minister of Public Security Wang Xiaohong and Secretary General of China’s Cabinet, known as the State Council, Wu Zhenglong. Shen Yiqin was the only woman named to the position and is China’s highest-ranking female politician.

No women sit on the 24-member Politburo or its standing Committee, and the party’s more-than-200-member Central Committee is 95% male.

A priority for finance officials will be to manage corporate and household debt that Beijing worries has risen to dangerous levels. Tighter debt controls triggered a slump in China’s vast real estate industry in 2021, adding to the COVID-19 pandemic’s downward pressure on the economy.

At the same time, the ruling party is trying to shift money into technology development and other strategic plans. That has prompted warnings that too much political control over emerging industries could waste money and hamper growth.

Xi has favored promoting officials who sometimes lack the experience of their predecessors and exposure to global industry and finance markets. That reflects Xi’s effort to purge the Chinese system of Western influence and promote homegrown strategies.
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Treasury Secretary Janet Yellen said Sunday that the federal government would not bail out Silicon Valley Bank, but is working to help depositors who are concerned about their money.

The Federal Deposit Insurance Corporation insures deposits up to $250,000, but many of the companies and wealthy people who used the bank — known for its relationships with technology startups and venture capital — had more than that amount in their account. There are fears that some workers across the country won’t receive their paychecks.

Yellen, in an interview with CBS’ “Face the Nation,” provided few details on the government’s next steps. But she emphasized that the situation was much different from the financial crisis almost 15 years ago, which led to bank bailouts to protect the industry.

“We’re not going to do that again,” she said. “But we are concerned about depositors, and we’re focused on trying to meet their needs.”

With Wall Street rattled, Yellen tried to reassure Americans that there will be no domino effect after the collapse of Silicon Valley Bank.

“The American banking system is really safe and well capitalized,” she said. “It’s resilient.”

Silicon Valley Bank is the nation’s 16th-largest bank. It was the second biggest bank failure in U.S. history after the collapse of Washington Mutual in 2008. The bank served mostly technology workers and venture capital-backed companies, including some of the industry’s best-known brands.

Silicon Valley Bank began its slide into insolvency when its customers, largely technology companies that needed cash as they struggled to get financing, started withdrawing their deposits. The bank had to sell bonds at a loss to cover the withdrawals, leading to the largest failure of a U.S. financial institution since the height of the financial crisis.

Yellen described rising interest rates, which have been increased by the Federal Reserve to combat inflation, as the core problem for Silicon Valley Bank. Many of its assets, such as bonds or mortgage-backed securities, lost market value as rates climbed.

“The problems with the tech sector aren’t at the heart of the problems at this bank,” she said.

Yellen said she expected regulators to consider “a wide range of available options,” including the acquisition of Silicon Valley Bank by another institution. So far, however, no buyer has stepped forward.

Tom Quaadman, executive vice president of the U.S. Chamber of Commerce’s Center for Capital Markets Competitiveness, said in a statement, “We urge the administration to facilitate a quick acquisition, guaranteeing all bank depositors have access to their cash.”

Regulators seized the bank’s assets on Friday. Deposits that are insured by the federal government are supposed to be available by Monday morning.

“I’ve been working all weekend with our banking regulators to design appropriate policies to address this situation,” Yellen said. “I can’t really provide further details at this time.”

House Speaker Kevin McCarthy, R-Calif., told Fox News Channel’s “Sunday Morning Futures” that he hoped the administration would announce the next steps as soon as Sunday.

“They do have the tools to handle the current situation, they do know the seriousness of this and they are working to try to come forward with some announcement before the markets open,” he said.

McCarthy also expressed hope that Silicon Valley Bank would be purchased.

“I think that would be the best outcome to move forward and cool the markets and let people understand that we can move forward in the right manner,” he said.

Sen. Mark Warner, D-Va., said in an interview with ABC News’ “This Week” that he was concerned that the bank’s collapse could prompt nervous people to transfer money from other regional banks to larger institutions.

“We don’t want further consolidation,” he said.

Warner suggested there would be a “moral hazard” in reimbursing depositors in excess of the $250,000 limit and said an acquisition would be the best next step.

“I’m more optimistic this morning than I was yesterday afternoon at this time,” he said. “But, again, we will see how this plays out during the rest of the day.”

He added: “What we’ve got to focus on right now is how do we make sure there’s not contagion.”

President Joe Biden and Gov. Gavin Newsom, D-Calif., spoke about “efforts to address the situation” on Saturday, although the White House did not provide additional details on next steps.

Newsom said the goal was to “stabilize the situation as quickly as possible, to protect jobs, people’s livelihoods, and the entire innovation ecosystem that has served as a tent pole for our economy.”
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Oil giant Saudi Aramco reported Sunday its profits surged to $161 billion last year off higher crude prices, a record result for an energy firm crucial to the kingdom’s economy.

The firm, known formally as the Saudi Arabian Oil Co., said in its annual report that the profit represented “its highest annual profits as a listed company.” That came off the back of energy prices rising after Russia launched its war on Ukraine in February 2022, with sanctions limiting the sale of Moscow’s oil and natural gas in Western markets.

Aramco also hopes to increase its production to take advantage of market demand, raising the billions needed to pay for Crown Prince Mohammed bin Salman’s plans to develop futuristic cityscapes to pivot Saudi Arabia away from oil.

However, those plans come despite growing international concerns over the burning of fossil fuels accelerating climate change.

“Given that we anticipate oil and gas will remain essential for the foreseeable future, the risks of underinvestment in our industry are real — including contributing to higher energy prices,” Saudi Aramco CEO and President Amin H. Nasser said in a statement.

Profits rose 46.5% when compared to the company’s 2021 results of $110 billion. It earned $49 billion in 2020 when the world faced the worst of the coronavirus pandemic lockdown, travel disruptions and oil prices briefly going negative.

Aramco put its crude production at around 11.5 million barrels a day in 2022 and said it hoped to reach 13 million barrels a day by 2027.

To boost that production, it plans to spend as much as $55 billion this year on capital projects.

Aramco also declared a dividend of $19.5 billion for the fourth quarter of 2022, to be paid in the first quarter of this year.

Aramco’s results, viewed as a bellwether for the global energy market, mirror the huge profits seen at those of U.K. energy giant BP,America’s Exxon Mobil, Shell and others in 2022.

Benchmark Brent crude oil now trades around $82 a barrel, though prices had reached over $120 a barrel back in June. Aramco, whose fortunes hinge on global energy prices, announced a record $42.4 billion profit in the third quarter of 2022 off the back of that price spike.

Those high prices have further strained ties between the kingdom and the United States, traditionally a security guarantor among the Gulf Arab states amid tensions with Iran. Before the midterm elections in November, the kingdom said the Biden administration sought to delay a decision by OPEC and allies including Russia to cut production that could have kept gasoline prices lower for voters — making public the typically behind-the-scenes negotiations common in the region.

President Joe Biden had warned the kingdom that “there’s going to be some consequences for what they’ve done” in terms of oil prices. However, those consequences have yet to be seen as Saudi Arabia and Iran went to China to strike a diplomatic deal Friday. U.S. gasoline prices now stand on average at $3.47 a gallon, down just about a dollar from last year.

For the kingdom, higher crude oil prices can help fuel the dreams of Prince Mohammed, including his planned $500 billion futuristic desert city project called Neom. However, they also run against the fears of activists over climate change, particularly as the United Nations’ COP28 climate talks will begin this November in the neighboring United Arab Emirates.

Saudi Arabia has pledged to have net-zero carbon emissions by 2060, like China and Russia, though its plans to reach that goal remain unclear. Aramco’s earnings report noted it started a $1.5 billion Sustainability Fund in October and plans a carbon-capture-and-storage facility as well.

Saudi Arabia’s vast oil resources, located close to the surface of its desert expanse, make it one of the world’s least expensive places to produce crude. For every $10 rise in the price of a barrel of oil, Saudi Arabia stands to make an additional $40 billion a year, according to the Institute of International Finance.

Shares in Aramco stood at $8.74 on Riyadh’s Tadawul stock exchange before it opened Sunday. That’s down from a high of $11.55 a share in the last year. However, that current price still gives Aramco a valuation of $1.9 trillion — making it the world’s second most valuable company behind only Apple.

The Saudi government still owns the vast majority of the firm’s shares. Saudi Aramco publicly listed a sliver of its worth back in late 2019.

Aramco will release a comprehensive earnings report Monday.
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It was called Silicon Valley Bank, but its collapse is causing shockwaves around the world.

From winemakers in California to startups across the Atlantic Ocean, companies are scrambling to figure out how to manage their finances after their bank suddenly shut down Friday. The meltdown means distress not only for businesses but also for their workers whose paychecks could get tied up in the chaos.

California Governor Gavin Newsom said Saturday that he’s talking with the White House to help “stabilize the situation as quickly as possible, to protect jobs, people’s livelihoods, and the entire innovation ecosystem that has served as a tent pole for our economy.”

U.S. customers with less than $250,000 in the bank can count on insurance provided by the Federal Deposit Insurance Corp. Regulators are trying to find a buyer for the bank in hopes customers with more than that can be made whole.

That includes customers such as Circle, a big player in the cryptocurrency industry. It said it has about $3.3 billion of the roughly $40 billion in reserves for its USDC coin at SVB. That caused USD Coin’s value, which tries to stay firmly at $1, to briefly plunge below 87 cents Saturday. It later rose back above 97 cents, according to CoinDesk.

Across the Atlantic, startup companies woke up Saturday to find SVB’s U.K. business will stop making payments or accepting deposits. The Bank of England said late Friday that it will put Silicon Valley Bank U.K. in its insolvency procedure, which will pay out eligible depositors up to 170,000 British pounds ($204,544) for joint accounts “as quickly as possible.”

“We know that there are a large number of startups and investors in the ecosystem who have significant exposure to SVB UK and will be very concerned,” Dom Hallas, executive director of Coadec, which represents British startups, said on Twitter. He cited “concern and panic.”

The Bank of England said SVB UK’s assets would be sold to pay creditors.

It’s not just startups feeling the pain. The bank’s collapse is having an effect on another important California industry: fine wines. It’s been an influential lender to vineyards since the 1990s.

“This is a huge disappointment,” said winemaker Jasmine Hirsch, the general manager of Hirsch Vineyards in California’s Sonoma County.

Hirsch said she expects her business will be fine. But she’s worried about the broader effects for smaller vintners looking for lines of credit to plant new vines.

“They really understand the wine business,” Hirsch said. “The disappearance of this bank, as one of the most important lenders, is absolutely going to have an effect on the wine industry, especially in an environment where interest rates have gone up.”

In Seattle, Shelf Engine CEO Stefan Kalb found himself immersed in emergency meetings devoted to figuring out how to meet payroll instead of focusing on his startup company’s business of helping grocers manage their food orders.

“It’s been a brutal day. We literally have every single penny in Silicon Valley Bank,” Kalb said Friday, pegging the deposit amount that’s now tied up at millions of dollars.

He is filing a claim for the $250,000 limit, but that won’t be enough to keep paying Shelf Engine’s 40 employees for long. That could force him into a decision about whether to begin furloughing employees until the mess is cleaned up.

“I’m just hoping the bank gets sold during the weekend,” Kalb said.

Tara Fung, co-founder and CEO of tech startup Co:Create that helps launch digital loyalty and rewards programs, said her firm uses multiple banks besides Silicon Valley Bank so was able switch over its payroll and vendor payments to another bank Friday.

Fung said her firm chose the bank as a partner because it is the “gold standard for tech firms and banking partnerships,” and she was upset that some people seemed to be gloating about its failure and unfairly tying it to doubts about cryptocurrency ventures.

San Francisco-based employee performance management company Confirm.com was among the Silicon Valley Bank depositors that rushed to pull their money out before regulators seized the bank.

Co-founder David Murray credits an email from one of Confirm’s venture capital investors, which urged the company to withdraw its funds “immediately,” citing signs of a run on the bank. Such actions accelerated the flight of cash, which led to the bank’s collapse.

“I think a lot of founders were sharing the logic that, you know, there’s no downside to pulling up the money to be safe,” Murray said. “And so, we all did that, hence the bank run.”

The U.S. government needs to act more quickly to stanch further damage, said Martín Varsavsky, an Argentinian entrepreneur who has investments across the tech industry and Silicon Valley.

One of his companies, Overture Life, which employs about 50 people, had some $1.5 million in deposits in the financially embattled bank but can rely on other holdings elsewhere to meet payroll.

But other companies have high percentages of their cash in Silicon Valley Bank, and they need access to more than the amount protected by the FDIC.

“If the government allows people to take at least half of the money they have in Silicon Valley Bank next week, I think everything will be fine,” Varsavsky said Saturday. “But if they stick to the $250,000, it will be an absolute disaster in which so many companies won’t be able to meet payroll.”
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America’s employers added a substantial 311,000 jobs in February, fewer than January’s huge gain but enough to keep pressure on the Federal Reserve to raise interest rates aggressively to fight inflation.

The unemployment rate rose to 3.6%, from a 53-year low of 3.4%, as more Americans began searching for work but not all of them found jobs.

Friday’s report from the government made clear that the nation’s job market remains fundamentally healthy, with many employers still eager to hire. Fed Chair Jerome Powell told Congress this week that the Fed would likely ratchet up its rate hikes if signs continued to point to a robust economy and persistently high inflation. A strong job market typically leads businesses to raise pay and then pass their higher labor costs on to customers through higher prices.

February’s sizable job growth shows that so far, hiring is continuing to strengthen this year after having eased in late 2022. From October through December, the average monthly job gain was 284,000. That average has surged to 351,000 for the past three months.

Economists pointed to other data in Friday’s report that suggested that the job market, while still hot, may be better balancing employers’ need for workers and the supply of unemployed people. More people have been coming off the sidelines to seek work, a trend that makes it easier for businesses to fill the millions of jobs that remain open.

The proportion of Americans who either have a job or are looking for one has risen for three straight months to 62.5%, the highest level since COVID struck three years ago. Still, it remains below its pre-pandemic level of 63.3%.

With more potential hires to choose from, employers seem under less pressure now to dangle higher pay to attract or retain workers. Average wage growth slowed in February, rising just 0.2%, to $33.09, the smallest monthly increase in a year. Measured year over year, though, hourly pay is up 4.6%, well above the pre-pandemic trend. Even so, that’s down from average annual gains above 5% last year.

What the Fed may decide to do about interest rates when it meets later this month remains uncertain. The Fed’s decision will rest, in part, on its assessment of Friday’s jobs data and next week’s report on consumer inflation in February. Last month, the government’s report on January inflation had raised alarms by showing that consumer prices had reaccelerated on a month-to-month basis.

Ahead of the February jobs data, many economists had said they thought the Fed would announce a substantial half-point increase in its key short-term interest rate, rather than a quarter point hike as it did at its meeting in February. Friday’s more moderate hiring and wage figures, though, led some analysts to suggest that the central bank may not need to move so aggressively at this month’s meeting.

“There’s clear signs of cooling when you dig deeper into the numbers,” said Mike Skordeles, head of economics at Truist, a bank. “I think it makes the case for the Fed to say … we’ll still hike rates, but we’re not going to do” a half-point hike.

The Fed’s final determination, though, will rest heavily on Tuesday’s report on consumer prices.

“Everything now hinges on February’s CPI report,” said Paul Ashworth, an economist at Capital Economics.

When the Fed tightens credit, it typically leads to higher rates on mortgages, auto loans, credit card borrowing and many business loans. Its rate hikes can cool spending and inflation, but they also raise the risk of a recession.

Even for workers who have received substantial pay raises, ongoing high inflation remains a burden. Consumer prices rose 6.4% in January compared with a year ago, driven up by the costs of food, clothing and rents, among other items.

Frustrated by wages that aren’t keeping up with inflation, Rodney Colbert, a cook at the Las Vegas convention center, joined a strike Thursday by the Culinary Workers union to demand better pay and benefits. Colbert said that his hourly pay was $4-$5 less than what cooks were paid at casinos on the Las Vegas Strip.

“I’ll average approximately 28 hours a week, and that’s not enough,” Colbert said. “Just in the past two years, my rent has gone up $400, so that’s a lot.”

Nationally, nearly all of last month’s hiring occurred in mostly lower-paid services industries, with a category that includes restaurants, bars, hotels and entertainment adding 105,000 jobs, its second straight month of strong gains. Warmer-than-usual weather likely contributed to the increase. With the weather likely allowing more building projects to continue, construction companies added 24,000 jobs.

Retailers added about 50,000 jobs last month, health care providers 63,000. Local and state governments — some of them flush with cash from stimulus programs — added 46,000 jobs.

Much of that job growth reflects continuing demand from Americans who have been increasingly venturing out to shop, eat out, travel and attend entertainment events — activities that were largely restricted during the height of COVID.

“We’ve created more jobs in two years than any administration has created in the first four years,” President Joe Biden said Friday about the employment report. “It means our economic plan is working.”

Economists note, however, that the very strength of the job market is itself contributing to the high inflation that continues to pressure millions of households.

In February, in contrast to the solid hiring in the services sector, manufacturers cut 4,000 jobs. And a sector that includes technology and communications workers shed 25,000 jobs, its third straight month of losses. It is a sign that some of the announced layoffs in the economy’s tech sector are being captured in the government’s data.

Last month, the government reported a surprising burst of hiring for January — 517,000 added jobs — though that gain was revised down slightly to 504,000 in Friday’s report. The vigorous job growth for January was the first in a series of reports to point to an accelerating economy at the start of the year. Sales at retail stores and restaurants also jumped, and inflation, according to the Fed’s preferred measure, rose from December to January at the fastest pace in seven months.

The stronger data reversed a cautiously optimistic narrative that the economy was cooling modestly — just enough, perhaps, to tame inflation without triggering a deep recession. Now, the economic outlook is hazier.
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The United States rushed to seize the assets of Silicon Valley Bank on Friday after it experienced a run on the bank.

Silicon Valley, the nation’s 16th-largest bank, failed after depositors — mostly technology workers and venture capital-backed companies — hurried to withdraw money this week as anxiety over the bank’s balance sheet spread. It is the second biggest bank failure in U.S. history, behind Washington Mutual during the height of the financial crisis more than a decade ago.

Silicon Valley was heavily exposed to the tech industry and there is little chance of contagion in the banking sector similar to the chaos in the months leading up to the Great Recession more than a decade ago. The biggest banks — those most likely to cause a systemic economic issue — have healthy balance sheets and plenty of capital.

In 2007, the biggest financial crisis since the Great Depression rippled across the globe after mortgage-backed securities tied to ill-advised housing loans rippled from the United States to Asia and Europe. The panic on Wall Street led to the collapse of the storied Lehman Brothers, founded in 1847. Because major banks had extensive exposure to one another, it led to cascading disruption throughout the global financial system, putting millions out of work.

There has been unease in the banking sector all week and the collapse of Silicon Valley pushed shares of almost all financial institutions lower Friday, shares that had already tumbled by double digits since Monday.

Silicon Valley Bank’s failure arrived with incredible speed, with some industry analysts on Friday suggesting it was a good company and still likely a wise investment. Silicon Valley Bank executives were trying to raise capital early Friday and find additional investors. However, trading in the bank’s shares was halted before the opening bell on Wall Street because of extreme volatility.

Shortly before noon eastern, the Federal Deposit Insurance Corporation moved to shutter the bank. Notably, the FDIC did not wait until the close of business to seize the bank, as is typical in an orderly wind down of a financial institution. The FDIC could not immediately find a buyer for the bank’s assets, signaling how fast depositors had cashed out. The bank’s remaining uninsured deposits will now be locked up in receivership.

The bank had $209 billion in total assets at the time of failure, the FDIC said. It was unclear how much of its deposits were above the $250,000 insurance limit at the moment, but previous regulatory reports showed that much of Silicon Valley Bank’s deposits exceeded that limit.

The FDIC said Friday that deposits below the $250,000 limit would be available Monday morning.

Silicon Valley Bank appeared stable this year, but on Thursday it announced plans to raise up to $1.75 billion to strengthen its capital position. That sent investors scurrying and shares plunged 60%. They fell further on Friday before the opening of the Nasdaq, where it is traded.

As its name implied, Silicon Valley Bank was a major financial conduit between the technology sector, its founders and startups as well as its workers. Hundreds of companies held their operating capital with the bank, and it was seen as good business sense to develop a relationship with Silicon Valley Bank if a founder wanted to find new investors or go public.

“We saw building a relationship with Silicon Valley Bank as a logical step, given their reach,” said Ashley Tyrner, CEO of FarmboxRx, a company that delivers food as medicine to Medicaid and Medicare recipients. While Tyrner has money in other banks and can make payroll, she said a good portion of her business’ profits are now locked up with the bank.

Silicon Valley’s connections to the tech sector became a liability rapidly. Technology stocks have been hit hard in the past 18 months after a growth surge during the pandemic and layoffs have spread throughout the industry.

At the same time, the bank was hit hard by the Federal Reserve’s fight against inflation and an aggressive series of interest rate hikes to cool the economy.

As the Fed raises its benchmark interest rate, the value of bonds, typically a stable asset, start to fall. That is not typically a problem as the declines lead to “unrealized losses,” or losses that are not counted against them when calculating the capital cushion than banks can use should there be a downturn in the future.

However, when depositors grow anxious and begin withdrawing their money, banks sometimes have to sell those bonds before they mature to cover that exodus.

That is exactly what happened to Silicon Valley Bank, which had to sell $21 billion in highly liquid assets to cover the exodus of deposits. It took a $1.8 billion loss on that sale.

Tyrner said she’s spoken to several friends who are backed by venture capital. She described those friends as being “beside themselves” over the bank’s failure. Tyrner’s chief operating officer tried to withdraw her company’s funds on Thursday but failed to do so in time.

“One friend said they couldn’t make payroll today and cried when they had to inform 200 employees because of this issue,” Tyrner said.
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