Fed blamed for ignoring warning signs preceding bank meltdown
WASHINGTON (AP) – The Federal Reserve is receiving severe criticism for ignoring what experts believe were significant warning indications that Silicon Valley Bank was in imminent danger of failing, resulting in the second-largest bank failure in U.S. history. The Santa Clara, California-based bank was primarily supervised by the Federal Reserve, but also by the California Department of Financial Protection and Innovation. Critics point to numerous warning signs that had surrounded Silicon Valley Bank, such as its rapid growth since the pandemic, its unusually high level of uninsured deposits, and its over-investment in long-term government bonds and mortgage-backed securities, whose value plummeted as interest rates rose.
A non-magical AI technique may identify parents with impairments.
PITTSBURGH (AP) — The Associated Press received, as part of a year-long investigation, the data points behind the algorithms used by child welfare agencies to determine which children are in danger of harm. They provide unique insight into the underlying mechanisms of these new technologies. Race, poverty rates, handicap status, and family size are among the criteria used to assess a family’s risk, whether directly or indirectly. The tool’s creators claim their work is transparent and they make their models available to the public. The Associated Press has discovered that the U.S. Department of Justice is reviewing a Pennsylvania county’s child welfare system to investigate if its use of an algorithm discriminates against individuals with disabilities or other protected groups.
How the Government stepped in to save American banks
WASHINGTON (AP) – During a frenzied weekend of round-the-clock briefings, U.S. leaders took the daring step of insuring all deposits of the failing Silicon Valley Bank, including those exceeding the $250,000 limit of the Federal Deposit Insurance Corporation. After the second-largest bank failure in U.S. history, it is hoped that it will restore trust in the financial system. Although the government was unable to sell off the defunct institution on time, the idea came together. But, the FDIC may attempt to auction it again. In the meantime, officials and legislators are beginning to plan for the next catastrophe.
The fall of Silicon Valley Bank upsets the tech industry’s disruptors.
The collapse of Silicon Valley Bank has shaken the technology industry, which was the bank’s backbone. Entrepreneurs are grateful for the government reprieve that preserved their money, but they regret the loss of a venue that acted as an innovative social club. The deposit guarantees are relieving for IT firms since they will now be able to continue paying their employees and other costs. Yet, startup CEOs and venture capitalists who support them are concerned that it may become more difficult in the future to finance risky ideas without the presence of an institution that has been a dependable partner for the previous four decades.
A class action lawsuit has been launched against Silicon Valley Bank’s
A class action complaint has been launched against the parent company of Silicon Valley Bank, its chief executive officer, and its top financial officer, alleging that the corporation failed to disclose the risks of future interest rate hikes to its business. The complaint seeks specific damages for anyone who invested in SVB Financial Group between June 16, 2021, through March 10, 2023. According to the lawsuit, some quarterly and annual financial reports from SVB failed to account for Federal Reserve warnings on interest rate increases.
A second round of layoffs at Meta; 10,000 positions are eliminated.
As a cost-cutting measure, Facebook’s parent company Meta will eliminate an additional 10,000 workers and will not fill 5,000 vacancies. The firm said on Tuesday that it will reduce the number of its recruitment team, as well as its tech groups at the end of April and its business groups at the end of May. The corporation in Menlo Park, California, has invested billions of dollars to shift its attention to the metaverse. It reported reduced earnings and sales for the fourth quarter in February, due to a decline in the online advertising industry and competition from TikTok.
Chevron reports oil price information over concerns
(AP) — SACRAMENTO, California Chevron states that it has revealed how much money it gained selling gasoline in California in January. The submission to state authorities is the result of new state legislation requiring oil firms to publish additional price information. The purpose of the statute is to collect data to investigate why California’s gas costs are so high. According to the California Energy Commission, four of the state’s five largest firms submitted the required information by the March 2 deadline. Chevron initially opposed the publication of the data. The authorities warned that they would be penalized if they failed to report. A Chevron spokeswoman stated that the business submitted the data late Tuesday afternoon.
After Wall Street’s recovery from bank concerns, Asian equities rose.
BEIJING (AP) — As Wall Street recovered following severe drops in bank stocks and U.S. inflation crept down, Asian stock markets are higher. Sydney, Shanghai, Tokyo, and Hong Kong progressed. Oil prices recovered a portion of the previous day’s steep declines. The benchmark S&P 500 index on Wall Street increased as bank stocks regained a portion of their losses caused by fears that clients might withdraw savings following the failure of two U.S. institutions. In February, according to government statistics, prices increased by 6% over the previous year, a decrease from January’s 6.4% but still well above the Federal Reserve’s 2% objective. Investors were concerned that the Federal Reserve may respond to persistent increasing price pressure by accelerating the rate of interest rate hikes.
Ohio sues Norfolk Southern for the derailment of a hazardous train.
Last month, a catastrophic train disaster occurred on the Ohio-Pennsylvania border, and the state of Ohio has filed a lawsuit against Norfolk Southern to ensure the company pays for the cleaning and environmental damage. The state’s attorney general stated on Tuesday that the federal action also aims to compel the corporation to pay for future groundwater and soil monitoring as well as economic damages in the East Palestine hamlet and neighboring areas. Attorney General of Ohio David Yost said the effects of the incident on February 3 would be felt for many years. Alan Shaw, chief executive officer of Norfolk Southern, has apologized for the impact the incident has had on East Palestine.
Is my money safe? What you must understand about bank collapses
NEW YORK (Associated Press) — You may be concerned about your finances due to the recent collapses of Silicon Valley Bank and Signature Bank, which catered mostly to the technology industry. These were the second and third-largest bank collapses in the history of the United States. There’s no reason to fear if your money is at a bank guaranteed by the Federal Deposit Insurance Corp. and you have less than $250,000 there. If the bank collapses, you will receive a refund. If you have more than $250,000 in a single bank, that sum is deemed uninsured, and experts advise you to relocate the excess funds to a different bank.