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Fed official: Bank rules under review in wake of SVB failure
WASHINGTON (AP) — The Federal Reserve’s bank supervisors warned Silicon Valley Bank’s management as early as the fall of 2021 of risks stemming from its unusual business model, a top Fed official said Tuesday, but its managers failed to take the steps necessary to fix the problems. The Fed official, Michael Barr, the nation’s top banking regulator, said during a Senate Banking Committee hearing that the Fed is considering whether stronger bank rules are needed to prevent a similar failure in the future. Silicon Valley Bank’s management was deficient, Barr said. In particular, he said, the interest rate model the bank used “was not at all aligned with reality.”
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Small businesses weigh banking options amid bank turmoil
NEW YORK (AP) — The recent banking turmoil has been a jolt for small businesses of all stripes, spurring many to scrutinize their banking services and mull whether or not they should make changes. The turmoil added to the uncertainty already caused by stubborn inflation and higher interest rates. Experts say it’s probably a good idea for small businesses to diversify funds and make sure they’re in close contact with their banker, but emphasized that in the short term their bank accounts are safe because regulators have shown they’re willing to step in when needed.
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Apple rolls out buy now, pay later service, with guardrails
NEW YORK (AP) — Apple is getting into the buy now, pay later space with a few tweaks to the existing model, including no option to pay with a credit card. The company will roll out the product to some consumers this spring, and will begin reporting the loans to credit bureaus in the fall. Since the start of the pandemic, the option to “buy now, pay later” has skyrocketed in popularity, especially among young and low-income consumers who may not have ready access to traditional credit.
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FTX founder Bankman-Fried charged with paying $40M bribe
NEW YORK (AP) — A new indictment charges FTX founder Sam Bankman-Fried with directing $40 million in bribes to one or more Chinese officials to unfreeze assets relating to his cryptocurrency business. The rewritten indictment unsealed Tuesday adds a charge of conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act. It is the 13th charge facing Bankman-Fried as he awaits trial in New York while staying with his parents in Palo Alto, California. He has already pleaded not guilty to charges that he cheated investors out of billions of dollars before his business collapsed last year. He was arrested in December.
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US consumer confidence ticks up in March
WASHINGTON (AP) — Consumer confidence inched up in March after two straight monthly declines, even as persistent inflation, bank collapses and anxiety over a possible recession weighed on Americans. The Conference Board reported Tuesday that its consumer confidence index rose to 104.2 in March from 103.4 in February. The business research group’s present situation index — which measures consumers’ assessment of current business and labor market conditions — inched down to 151.1 from 153 last month. The board’s expectations index — a measure of consumers’ six-month outlook for income, business and labor conditions — rose in March to 73 from 70.4 in February.
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EPA cites 2 oil and gas firms over Permian Basin pollution
WASHINGTON (AP) — Two Texas companies have resolved Clean Air Act violations with the Environmental Protection Agency by agreeing to reduce emissions of planet-warming methane and other harmful pollutants wafting from the nation’s largest oil and gas producing region. EPA announced Monday that Matador Production Company has agreed to pay $6.2 million in fines and mitigation measures related to 239 of oil and gas well pads in New Mexico. The settlement comes after Permian Resources Operating agreed earlier this month to pay $610,000 and make improvements to its equipment to resolve environmental violations. EPA flew a helicopter equipped with a special infrared camera that can detect emissions of hydrocarbonous gases that are invisible to the naked eye.
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Alibaba to split itself into 6 business groups
NEW YORK (AP) — Alibaba is separating the company into six business groups as it looks to react faster to market changes and increase their value. Shares of Alibaba Group jumped 8% at the opening bell Tuesday. The company said in a regulatory filing that it will be split into the Cloud Intelligence Group, Taobao Tmall Business Group, Local Services Group, Global Digital Business Group, Cainiao Smart Logistics and Digital Media and Entertainment Group. The company said that each group will be able to potentially seek its own initial public offering, except for Taobao Tmall Business Group, which will stay wholly-owned by Alibaba Group.
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Juul Minnesota Altria cigarettes vaping
MINNEAPOLIS (AP) — Minnesota Attorney General Keith Ellison has personally opened his state’s lawsuit against Juul Labs. He saYS the state is seeking more than $100 million in damages. It’s the first of thousands of cases against the e-cigarette maker to reach trial. In opening statements Tuesday, Ellison accused Juul of unlawfully targeting young people with vaping products to get a new generation addicted to nicotine. Most of the thousands of lawsuits Juul has faced nationwide have been settled, including 39 with other states and territories, and Juul says the state is depriving its citizens of money that could reduce smoking and vaping. Minnesota added tobacco giant Altria as a co-defendant.
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Biden: GOP policies would surrender tech economy to China
DURHAM, North Carolina (AP) — President Joe Biden says that Republicans’ budget plans could undermine U.S. manufacturing and help China dominate the world economy. Being tough on China has been a core part of the identity of former President Donald Trump, who is seeking to return to the White House in 2024. Biden says the GOP push to cut his incentives for clean energy “would mean ceding the future of innovation and technology to China.” Biden’s visit Tuesday to Wolfspeed follows the Durham-based company’s announcement last September to build a $5 billion manufacturing facility in Chatham County.
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Push in states for $20 minimum wage as inflation persists
ALBANY, N.Y. (AP) — Just years after labor activists persuaded a handful of states to raise their minimum wage to $15 per hour, workers initially thrilled with the pay bump are finding their hard-won gains erased by inflation. New York, California, and Massachusetts are among states where legislation has been filed to boost minimum wages to $20 or more. But opponents to hikes in wages say it can be detrimental to small businesses who already operate on thin margins. Barry Nicholson, a businessowner in Corning, a city by the Finger Lakes in New York, said a big wage increase would be “a smack in the face to small businesses.”
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The S&P 500 fell 6.26 points, or 0.2%, to 3,971.27. The Dow Jones Industrial Average fell 37.83 points, or 0.1%, to 32,394.25. The Nasdaq composite fell 52.76 points, or 0.4% to 11,716.08. The Russell 2000 index of smaller companies fell 1.04 points, or 0.1%, to 1,752.63.
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