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Big banks create $30B rescue package for First Republic

NEW YORK (AP) — Eleven of the biggest banks in the country announced a $30 billion rescue package for First Republic Bank on Thursday, in an effort to stop the California-based bank from becoming the third bank to fail in less than a week. Shares of First Republic had fallen sharply this week, dropping 60% on Monday alone. For the package, JPMorgan Chase, Bank of America, Citigroup and Wells Fargo would each put $5 billion in uninsured deposits into First Republic. Meanwhile Morgan Stanley and Goldman Sachs would deposit $2.5 billion each. The remaining $5 billion would come from five other banks.

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Experts, banks look for ideas to stop next bank failure

WASHINGTON (AP) — The warning signs were all there. Silicon Valley Bank was expanding at a breakneck pace and pursuing wildly risky investments in the bond market. The vast majority of its deposits were uninsured by the federal government, leaving its customers exposed to a crisis. None of this was a secret. Yet bank supervisors at the Federal Reserve Bank of San Francisco and the state of California did nothing as the bank rolled over the cliff. The search for causes and culprits – and solutions — is refocusing attention on a 2018 federal law that rolled back tough bank regulations put in place after the 2008-2009 financial crisis and, perhaps even more, on the way regulators wrote the rules that put that law in place.

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Why TikTok’s security risks keep raising fears

China is accusing the U.S. of spreading disinformation amid reports the Biden administration is calling for TikTok’s Chinese owners to sell their stakes in the company. The statements from China’s Foreign Ministry is yet another response to efforts being made in the U.S. to restrict the app’s influence. TikTok has long been dogged by criticism that it would give user data — such as browsing history, location and biometric identifiers — to the Chinese government, or push propaganda and misinformation on its behalf. There’s no evidence that TikTok has turned over such data, but fears abound due to the vast amount of user data it collects.

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Yellen tells Congress US banking system ‘remains sound’

WASHINGTON (AP) — Treasury Secretary Janet Yellen is telling Congress and the nation that the U.S. banking system remains sound. Yellen is the first Biden administration official to face lawmakers over the decision to protect uninsured money at two failed regional banks in California and New York, which some are calling a bank “bailout.” Yellen testified before the Senate Finance Committee on Thursday, a week after the second-largest bank collapse in U.S. history. Yellen said the government took “forceful actions to strengthen public confidence” in the banking system. Yellen says she can reassure committee members the banking system is steady and Americans “can feel confident” their deposits “will be there when they need them.”

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Credit Suisse shares soar after central bank offers lifeline

GENEVA (AP) — Credit Suisse shares surged after the Swiss central bank agreed to loan the bank up to 50 billion francs ($54 billion) to bolster confidence in the country’s second-biggest lender following the collapse of two U.S. banks. Credit Suisse announced the agreement before the Swiss stock market opened, sending shares up as much as 33%. That was a massive turnaround from a day earlier, when news that the bank’s biggest shareholder would not inject more money into Credit Suisse sent its shares tumbling 30%. The plunge in price dragged down other European banks and deepened concerns about the international financial system.

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Europe’s central bank backs big rate hike despite bank chaos

FRANKFURT, Germany (AP) — The European Central Bank has carried through with a large interest rate increase, brushing aside predictions it might dial back as U.S. bank collapses and troubles at Credit Suisse feed fears about the impact of higher rates on the global banking system. The ECB hiked rates by half a percentage point Thursday, underlining its determination to fight high inflation. In a statement, the bank called the banking sector in the 20 countries using the euro currency “resilient,” with strong finances. It says it’s “monitoring current market tensions closely and stands ready to respond as necessary to preserve price stability and financial stability in the euro area.”

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Stocks rally after battered First Republic gets a lifeline

NEW YORK (AP) — Stocks rallied after a group of big banks offered a lifeline to the bank that investors had zeroed in on in their hunt for the next victim in the industry’s struggles. The S&P 500 jumped 1.8% Thursday, erasing earlier losses following reports that First Republic Bank could get help or sell itself to another bank. This week has been a whirlwind for markets on worries about banks that may be bending under the weight of the fastest set of hikes to interest rates in decades. Treasury yields also strengthened in a sign of increased confidence from the bond market.

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Microsoft adds AI tools to Office apps like Outlook, Word

NEW YORK (AP) — Microsoft is infusing artificial intelligence tools into its Office software, including Word, Excel and Outlook emails. The company says the new feature, named Copilot, is a processing engine that will allow users to do things like summarize long emails, draft stories in Word and animate slides in PowerPoint. It will also add a chat function called Business Chat, which takes commands from users. The announcement came two days after OpenAI rolled out its latest artificial intelligence model, GPT-4. OpenAI powers the generative AI technology Microsoft is relying on. Microsoft rival Google has also been integrating generative AI tools into its own Workspace applications.

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Average long-term US mortgage rates come back down to 6.6%

NEW YORK (AP) — The average long-term U.S. mortgage inched back down this week after five straight weeks of increases, good news for homebuyers as the housing market’s all-important spring buying season gets underway. Mortgage buyer Freddie Mac reported Thursday that the average on the benchmark 30-year rate slid back to 6.60% from 6.73% last week. The average long-term rate hit 7.08% in the fall — a two-decade high — as the Federal Reserve continued to raise its key lending rate in a bid to cool the economy and quash persistent, four-decade high inflation.

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The S&P 500 rose 68.35 points, or 1.8%, to 3,960.28. The Dow Jones Industrial Average added 371.98 points, or 1.2%, to 32,246.55. The Nasdaq composite gained 283.22 points, or 2.5%, to 11,717.28. The Russell 2000 index of smaller companies tacked on 25.29 points, or 1.4%, to 1,771.24.