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close video Silicon Valley Bank fall: Former Fed official says he would have pressed harder for a private sector solution

Former Federal Reserve Vice Chair Randal Quarles gives his take on the Fed’s reaction to collapse of the Silicon Valley Bank on ‘Kudlow.’

The Biden administration is gearing up to investigate the collapse of Silicon Valley Bank, which was the 16th-largest bank in the United States before it went under after a run on the bank last week.

The Justice Department is in the early stages of investigating SVB's failure, Fox News has confirmed. The news was first reported by the Wall Street Journal, which said the Securities and Exchange Commission is also investigating.

These inquiries may or may not lead to charges or allegations of wrongdoing and are typical of the government's response after a big company reports massive, unexpected losses.

SVB suffered $1.8 billion in losses last week as it faced a liquidity crisis caused by bad investments in bonds. The bank's share price fell 60% last week and the Federal Deposit Insurance Corporation (FDIC) stepped in Friday to take over the bank's operations as depositors panicked and rushed to withdraw their money. Ticker Security Last Change Change % SIVB SVB FINANCIAL GROUP 106.04 -161.79 -60.41%

The government probes will look into stock sales that SVB Financial's officers made days before the bank collapsed, according to the Journal. The Justice Department's investigation reportedly involves federal fraud prosecutors based in Washington and San Francisco. 

SVB COLLAPSE: MOODY'S FLAGS SIX OTHER BANKS WITH CONCERNING CREDIT RATINGS

An FDIC sign is posted on a window at a Silicon Valley Bank branch in Wellesley, Mass., on Saturday, March 11, 2023. (AP Photo/Peter Morgan / AP Newsroom)

A spokesperson for the SEC would not confirm the investigation but referred to SEC Chair Gary Gensler's Sunday statement, which said, "we at the SEC are particularly focused on monitoring for market stability and identifying and prosecuting any form of misconduct that might threaten investors, capital formation, or the markets more broadly. Without speaking to any individual entity or person, we will investigate and bring enforcement actions if we find violations of the federal securities laws."

SVB's collapse was the second-largest bank failure in U.S. history and the largest since Washington Mutual went under in 2008. As of last year, the bank held $209 billion in assets and $175.4 billion in deposits, according to the FDIC. 

SILICON VALLEY BANK COMMITTED ‘ONE OF THE MOST ELEMENTARY ERRORS IN BANKING,' LARRY SUMMERS SAYS

The Justice Department, led by U.S. Attorney General Merrick Garland, is reportedly investigating Silicon Valley Bank’s collapse. ((Photo by Drew Angerer/Getty Images) / Getty Images)

Prior to its failure, SVB mainly serviced tech startups and their investors. As the tech industry grew, so too did SVB's deposits, increasing 86% in 2021 to $189 billion.

But concerns over the bank's health prompted a run on deposits last week. On Thursday, customers attempted to withdraw $42 billion — nearly a quarter of the bank's total deposits — which the bank simply did not have available. SVB had tied up most of its funds in treasury bonds and other long-term investments, which have declined in value as the Federal Reserve has raised interest rates to combat inflation in the past year.

SILICON VALLEY BANK COLLAPSE: HERE'S WHO BENEFITTED FROM THEIR EXECUTIVE, PAC DONATIONS

Igor Fayermark, right, from the Federal Deposit Insurance Corporation (FDIC), exits Silicon Valley Bank’s headquarters in Santa Clara, California, on Monday, March 13, 2023. (AP Photo/Benjamin Fanjoy / AP Images)

Securities filings show that SVB CEO Greg Becker and CFO Daniel Beck each sold shares in their bank the week before it collapsed. The Journal reported that Becker exercised options on 12.451 shares on Feb. 27 and sold them for $2.3 million.

Beck sold a little more than $575,000 worth of shares on Feb. 17, which was roughly one-third of his total stake in the company.

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However, both sales were scheduled 30 days in advance under 10b5-1 plans, which allow insiders to schedule share sales to allay suspicion of illegal trading. "The SEC recently tightened rules for the plans, which include a 90-day waiting period before sales can be executed. The new rules went into effect on Feb. 27, the same day the executives sold," the Journal reported. 

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Wes Streeting rules out pay rises for striking resident doctors saying they have ‘squandered goodwill’

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Wes Streeting rules out pay rises for striking resident doctors saying they have 'squandered goodwill'

Resident doctors have “squandered the considerable goodwill” they had with the government by going on strike, Health Secretary Wes Streeting has told them.

The medics – formerly known as junior doctors – finished a five-day strike over pay on Wednesday morning. The group were awarded a close to 30% raise last year but say they want more in an attempt to bring their pay back in line with what they had in 2008.

Mr Streeting previously said he would not negotiate further on pay but would consider taking steps on working conditions.

He has reiterated that stance – and continued to put pressure on negotiations to start again on the government’s terms.

The British Medical Association Resident Doctors Committee, which represents the doctors, have not ruled out further action.

In a letter sent today to the co-chairs of the committee, Mr Streeting thanked them for an invitation to “get back to the negotiating table” – but added the barb that it was “ironic because I never left”.

“I am ready to continue the conversation from where you left it,” he added.

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He went on to say the strikes were “deeply disappointing and entirely unnecessary” – adding that there were “seemingly promising discussions” about improving doctors’ working lives.

Read more:
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‘No doctor wants to go out on strike’

‘We cannot move on pay’

Mr Streeting criticised the committee, saying they “rushed to strike”.

His letter added: “The consequences of your strike action have been a detrimental impact on patients, your members, your colleagues and the NHS, which might have been worse were it not for the considerable efforts of NHS leaders and front-line staff who stepped up.

“Your action has also been self-defeating, because you have squandered the considerable goodwill you had with me and this government. I cannot in good conscience let patients, or other NHS staff, pay the price for the costs of your decision.”

The health secretary said he wanted to “reset the relationship” between the government and young doctors following the previous industrial action.

Mr Streeting went on to say he is “serious about improving working conditions” but has been clear “we cannot move on pay”.

“This government is prepared to negotiate on areas related to your conditions at work, career progression and tangible measures which would put money in your members’ pockets,” he added.

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Mr Streeting concluded: “I was critical of my predecessors when they closed the door to the Junior Doctors Committee.

“My door remains open to the hope that we can still build the partnership with resident doctors I aspired to when I came in a year ago and, in that spirit, I am happy to meet with you early next week.”

A BMA spokesperson said: “The resident doctors committee has received the letter from Mr Streeting and is considering its response.”

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Companies who pay suppliers late to be fined

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Companies who pay suppliers late to be fined

Companies which continually pay their suppliers late will face fines worth potentially millions of pounds, the prime minister has announced.

Sir Keir Starmer said “It’s time to pay up” as the government is set to unveil plans to give the small business commissioner powers to fine large companies that persistently pay their suppliers late.

Under the new legislation, businesses will have to pay their suppliers within 30 days of receiving a valid invoice, unless otherwise agreed, with spot checks to help identify breaches.

Maximum payment terms of 60 days, reducing to 45 days, will also be introduced as part of the legislation to ensure businesses are paid on time.

Late payments cost the UK economy £11 billion a year and shut down 38 businesses a day, the government said.

The new law will save small and medium businesses time so they can focus on growing their revenue, it added.

Chancellor Rachel Reeves and Prime Minister Sir Keir Starmer at the launch of the 10-year health plan in east London. Pic: PA
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Chancellor Rachel Reeves and PM Sir Keir Starmer. Pic: PA

Sir Keir said: “From builders and electricians to freelance designers and manufacturers – too many hardworking people are being forced to spend precious hours chasing payments instead of doing what they do best – growing their businesses.

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“It’s unfair, it’s exhausting, and it’s holding Britain back. So, our message is clear: it’s time to pay up.

“Through our Small Business Plan, we’re not only tackling the scourge of late payments once and for all, but we’re giving small business owners the backing and stability they need for their business to thrive, driving growth across the country through our Plan for Change.”

The late payment crackdown is part of a wider government package, including a move to pump £4bn of financial support into small business start-ups and growth.

This will include £1bn for new firms, with 69,000 start-up loans and mentoring support.

Read more:
Sainsbury’s blames Visa card issues for online payment failure
Streeting rules out pay rises for striking doctors

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The value of ‘de minimis’ imports into Britain

The Conservatives said the crackdown will be welcome, but fails to address the “218,000 businesses that have closed under Labour”.

Andrew Griffith, the Tory shadow business secretary, added: “The reality for businesses under Labour is a doubling of business rates, a £25billion jobs tax and a full-on strangulation of employment red tape.

“Only the Conservatives are on the side of the makers and will support businesses across Britain to create jobs and wealth.”

Chancellor Rachel Reeves has increased employers’ national insurance, raised the minimum wage and lowered the threshold at which employers’ national insurance is paid.

The Resolution Foundation said this hits the cost of low-paid and part-time workers the most.

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How is Starmer’s government doing? Here’s what ‘end-of-term’ report from voters says

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How is Starmer's government doing? Here's what 'end-of-term' report from voters says

One year on, how’s Keir Starmer’s government going? We’ve put together an end-of-term report with the help of pollster YouGov.

First, here are the government’s approval ratings – drifting downwards.

It didn’t start particularly high. There has never been a honeymoon.

But here is the big change. Last year’s Labour voters now disapprove of their own government. That wasn’t true at the start – but is now.

And remember, it’s easier to keep your existing voter coalition together than to get new ones from elsewhere.

So we have looked at where voters who backed Labour last year have gone now.

YouGov’s last mega poll shows half of Labour voters last year – 51% – say they would vote for them again if an election was held tomorrow.

Around one in five (19%) say they don’t know who they’d vote for – or wouldn’t vote.

But Labour are also leaking votes to the Lib Dems, Greens and Reform.

These are the main reasons why.

A sense that Labour haven’t delivered on their promises is top – just above the cost of living. Some 22% say they’ve been too right-wing, with a similar number saying Labour have “made no difference”. Immigration and public services are also up there.

Now, YouGov asked people whether they think the cabinet is doing a good or a bad job, and combined the two figures together to get a net score.

John Healey and Bridget Phillipson are on top, but the big beats of Angela Rayner, Keir Starmer and Rachel Reeves bottom.

But it’s not over for Labour.

Here’s one scenario – 2024 Labour voters say they would much prefer a Labour-led government over a Conservative one.

But what about a Reform UK-led government? Well, Labour polls even better against them – just 11% of people who voted Labour in 2024 want to see them enter Number 10.

Signs of hope for Keir Starmer. But as Labour MPs head off for their summer holidays, few of their voters would give this government an A*.

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