Tag: Finance and banking

Top global regulator warns of ‘massive adjustment’ for financial system

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AMSTERDAM — The world’s financial system needs a “massive adjustment” to cope with higher interest rates, and key rules will have to be revisited, according to a top global regulator.
Klaas Knot, chair of the Financial Stability Board, an international standard-setting body, told POLITICO that rising interest rates fueled problems at several regional U.S. banks and similar losses may show up elsewhere.
“The speed with which interest rates have changed, that, of course, implies a massive adjustment in the financial system,” the Dutchman said in an interview from his office in Amsterdam. He added it was unclear exactly where those losses would be.

“In many, many places of the financial system, that adjustment will go well because it has been well-anticipated and has been well-managed. But history teaches us that is not always the case everywhere.”
The warning of potential trouble ahead echoes fears of other global officials and comes after the failure of Silicon Valley Bank, a $200 billion lender to the tech sector, sparked contagion across U.S. regional banks. The subsequent market panic contributed to bringing down Credit Suisse in Europe, forcing the Swiss government to hastily merge the lender with UBS.
Any domino effect can have huge impacts for the economy, businesses and households.
“We’ve seen the impact of rapidly changing interest rates manifest in the second tier of the regional U.S. banks,” Knot said. “But I would be very surprised if that was the only sub-sector of the financial system where you would have a significant impact.”
Despite the turmoil, Knot said he was more worried about risks stashed at “nonbanks” — a term that encompasses investment funds, insurers, private equity, pension funds and hedge funds — where authorities have less visibility on hidden losses.
“If they are hidden for a very long period of time, sometimes the problem then grows so big, that it only becomes unhidden or visible when it’s too big to deal with,” he said.
The FSB boss pointed to financial players that took the wrong side of a bet on interest-rates and may now be nursing losses. “I hope, of course, that this is well-dispersed over the financial sector,” he said. “Where we are worried is specific concentrations of such risk.”
In particular, he said, those losses could be amplified when there is a mismatch between hard-to-sell assets and easy withdrawals, and borrowed money is used to juice returns.
That combination has worried authorities for some time — but Knot said this didn’t mean regulators are behind. For instance, the FSB, whose membership includes central bankers, financial regulators and finance ministries, will issue recommendations for open-ended investment funds in July.
Under the plans, regulators would get more powers to trigger restrictions in a crisis, rather than leaving those decisions in the hands of the fund manager.
Rewriting the rules
The financial rulebook will need to be revisited substantially in light of recent events, he said.
“It’s a mistake to see the regulatory framework as something that is fixed, and something that should not be touched,” he said. “The financial industry is not at all fixed, it is continuously evolving. So, the regulatory framework should evolve with the evolving risks.”
The Dutchman said this means revisiting assumptions about how quickly banks can sell assets to meet depositor withdrawals, the speed of those withdrawals in a digital era, and the reserves that have to be set aside to cover potential unrealized losses from interest-rate risks — all of which were factors in the U.S. bank collapses.

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( With inputs from : www.politico.eu )

April 28, 2023
Olaf Scholz faces new probe over German tax fraud scandal

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BERLIN — Germany’s center-right opposition wants to raise the heat on Chancellor Olaf Scholz by launching a parliamentary investigation into his alleged connection to a massive tax evasion scandal.
The case — which dates back over five years to the time when Scholz was still mayor of the Hamburg city-state — is linked to the broader so-called “Cum Ex” affair, under which the German state was defrauded by over €30 billion as some banks, companies, or individuals claimed tax reimbursements from authorities for alleged costs that never occurred.
The scandal already hung over the Social Democratic politician’s election campaign in 2021 but had little impact in the end as Scholz’s potential involvement remained unclear. Now it is heating up again after new details emerged that put his previous defense in question.

The Hamburg regional parliament plans to summon Scholz this spring — which will be for the third time — to an investigative committee looking into the scandal. And now the center-right CDU/CSU bloc also wants to set up an inquiry at the national level in the Bundestag.
“We will request a parliamentary committee of inquiry into the Scholz-Warburg tax affair in the German Bundestag in the first parliamentary week after the Easter vacations,” said the CDU’s Mathias Middelberg, deputy parliamentary group chairman, on Tuesday.
A government spokesperson said that “as a matter of principle,” Berlin does not comment on decisions announced by Bundestag members “out of respect for the constitutional body,” according to media reports.
Katja Mast, the Social Democrats’ chief whip, said the CDU/CSU is not following any interest in knowledge, but rather party tactical interests. “They bring up allegations that have long been refuted,” she said, adding that the committee in Hamburg had clarified all questions.
The CDU/CSU group has enough votes in parliament to be able to set up an investigative committee. The Left party also said it would back such a request. Parliamentary investigative committees can hear witnesses and experts and request access to documents. Although the findings are summarized in a non-binding report, the political consequences, such as for upcoming elections, could be significant.
In a letter to the CDU/CSU parliamentary group seen by POLITICO, chairmen Friedrich Merz and Alexander Dobrindt said that the case should be investigated due to its “significant” importance for German national politics.
Scholz has come under scrutiny because of his links to one Hamburg-based bank involved in the tax evasion scheme: During his time as mayor, he met on three separate occasions in private with one of the owners of the M.M. Warburg & Co. bank, which was already under investigation at the time by the Hamburg tax office. Officials were planning to reclaim €47 million, which they believed were ill-gotten gains in connection with the fraud.
However, in the end, the finance authority let the statute of limitations on the payment demand expire — and years later, after details of Scholz’s meetings with the banker emerged, critics began questioning whether the top Social Democrat might have intervened in favor of the bank.
Although the chancellor has constantly denied having intervened, he has also given no answer on what was discussed during the private meetings. Instead, Scholz said on several occasions during the past two-and-a-half years that he cannot remember the content of the discussions.
During his time as mayor of the Hamburg city-state, Scholz met with one of the owners of the M.M. Warburg & Co. Bank, involved in a tax evasion scheme | Morris MacMatzen/Getty Images
That defense is now being called into question as details emerged of a previous and longtime confidential Bundestag committee hearing with Scholz in July 2020, in which he appeared to easily remember details of his meetings with the banker. His critics argue that Scholz only started to claim having no memory of the meetings when their political and possibly criminal explosiveness became clear.
“This comprehensive memory gap of the chancellor after an initial memory of a concrete meeting … raises a multitude of questions to be clarified,” the letter from the CDU/CSU states.
Scholz and his allies have repeatedly rejected such criticism as politically motivated and stressed that past investigations found no wrongdoing. Scholz also highlighted that in the end, the bank did repay the €47 million, albeit only after it was ordered to do so by a court. The Hamburg Public Prosecutor’s Office said in March that it does not see any initial suspicion against the chancellor in the affair.
That hasn’t discouraged the opposition from planning to dig deeper, though.
“The chancellor would like to see … a line drawn under the clarification of this tax affair. But it is precisely the task of parliament to control the government, to look closely, especially with so many unanswered questions,” said CDU lawmaker Matthias Hauer.

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( With inputs from : www.politico.eu )

April 4, 2023
The tension at the heart of the ECB

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FRANKFURT ― The markets are jittery and inflation still needs taming. Coming together, those two things put the European Central Bank in a real bind.
Fight one fire and it could cause the other to flare. The ECB can keep raising interest rates to try to get inflation under control, but that risks fueling financial market tensions. Conversely, it can give banks some breathing space by slowing its rate-hiking, but that carries the danger of prolonging the region’s economic malaise.
Frankfurt’s official line is that it can do both with no serious consequences. Many economists in the eurozone don’t buy that.

In private, it’s a dilemma that splits the ECB’s decision-makers, and even in public differences of opinion are bubbling to the surface. Here’s what’s at stake:
Why is the ECB raising rates?
The idea is that increasing interest rates subdues inflation because it makes consumers and businesses less likely to borrow ― so that results in reduced spending.
As inflation has started to pick up since last summer, the ECB has raised interest rates at a record pace. They’ve gone from -0.5 to 3 percent as the annual rate of price rises has surged to a eurozone record 10.6 percent in October.
The Bank tries to keep inflation at 2 percent so it’s currently way off target.
How this contributed to the crisis
The unpleasant side effect is that with rising borrowing costs (because of higher interest rates), the value of bonds that banks hold usually fall. This gives investors a bad case of the jitters. After the collapse in March of lenders like Silicon Valley Bank and Credit Suisse ― though their problems seemed unconnected ― it was this that prompted concerns they might not be the only institutions with troubles, and fueled contagion fears around the globe.
But Lagarde plowed on regardless
The ECB remained unfazed in the face of emerging banking troubles: It delivered a previously signaled 0.5 percentage-point rate increase in March, less than a week after SVB failed and at a time when Swiss banking giant Credit Suisse was teetering.
Following that decision, ECB President Christine Lagarde stressed that she sees no trade-off between ensuring price stability and financial stability.
In fact, she said the Bank could continue to lift rates while addressing banking troubles with other tools.
The case against
Many economists disagree with Lagarde that the battle for price stability can be pursued without risking financial stability.
The ECB delivered 0.5 percentage-point rate increase in March, less than a week after SVB failed | Patrick T. Fallon/AFP via Getty Images
Claiming so “should be a career-ending statement,” said Stefan Gerlach, chief economist at EFG Bank in Zurich and a former deputy governor of the Central Bank of Ireland. “This is the idea of the ‘separation principle’ of 2008 revisited. That wasn’t a good idea then, and isn’t now either,” he added.
What’s the separation principle?
In 2008, at the start of the financial crisis, as well as in 2011, when the sovereign debt crisis hit, the ECB adhered to the idea that interest rates could be used to ensure price stability at the same time as other measures, such as generous liquidity injections, could ease market tension.
But this just added to the problems and had to be unwound quickly.
This time around, the Portuguese member on the ECB Governing Council, whose country suffered particularly under the consequences of the sovereign debt crisis, is less blasé than Lagarde.
“Our history tells us that we had to backtrack a couple of times already during processes of tightening given threats to financial stability. We cannot risk that this time,” Mario Centeno told POLITICO in an interview.
The case for Lagarde
After the initial fears that troubles could spread across the eurozone, investor nerves have calmed and bank shares started to recover. At the same time, new data showed that underlying inflation pressures kept rising, suggesting that Lagarde and her colleagues were right to stick to their guns ― at least for now.
If that’s the case, March’s interest rate rise ― what Commerzbank economist Jörg Krämer described as “necessary” investment in the central bank’s credibility ― will have paid off.
Market turmoil actually helps
The nervous markets could help the ECB to reach its inflation target without having to raise interest rates as aggressively as previously thought.
Banks tend to slap an additional risk premium on their lending rates which raises the cost of borrowing money for consumers and business. So banks end up doing part of the tightening job for the central bank.
ECB Vice President Luis de Guindos suggested as much in an interview released last month, though he cautioned that it was too early to assess how much impact exactly it may have.
What’s the endgame?
The challenge for the ECB is to strike the right balance. If it doesn’t it risks either the repeat of 2008-style financial troubles or a return to the stagflationary period (low growth on top of high inflation) that roiled the Continent in the 1970s.
If it raises rates too aggressively, bank failures followed by a recession risks forcing the ECB into an interest rate U-turn for the third time, creating massive credibility risks. Conversely, if they don’t hike enough, the central bank may lose a grip on inflation, which is its main mandate.
The only way Lagarde can win is to deliver both price stability and financial stability. In that sense, there is no trade-off ― one without the other just won’t be enough.

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( With inputs from : www.politico.eu )

April 4, 2023
Swiss prosecutors open probe into UBS takeover of Credit Suisse

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Swiss prosecutors have opened an investigation into possible illegal activity in connection with government support for UBS’s rushed takeover of Credit Suisse.
The two banks agreed to merge in March as part of an emergency deal targeted at avoiding a national financial crisis that could have had a knock-on effect globally.
“The Federal Prosecutor’s office wants to proactively fulfill its mission and responsibility to contribute to a clean Swiss financial center and has set up monitoring in order to take immediate action in any situation that falls within its field of activity,” the authority said in a statement.
Last month, Zurich-based UBS was forced by Swiss authorities to take over its longtime domestic rival Credit Suisse in a deal that creates a new bank.
The prosecutor’s statement said that the intention of the probe was to “analyze and identify any criminal offenses” associated with the deal, adding that various bodies had been contacted to provide clarifications and information.
The deal has been unpopular locally and on Sunday, Swiss daily Tages-Anzeiger reported that the new entity could slash jobs by up to 30 percent.
“If we had done nothing, [Credit Suisse] shares would have been worthless on Monday and the shareholders would have gone home empty-handed,” Swiss Finance Minister Karin Keller-Sutter said last weekend in justifying the deal.

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( With inputs from : www.politico.eu )

April 1, 2023
IMF’s Georgieva: ‘Risks to financial stability have increased’

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The outlook for the global economy is likely to remain weak in the medium term amid heightened risks to financial stability, according to International Monetary Fund Managing Director Kristalina Georgieva.
“We expect 2023 to be another challenging year, with global growth slowing to below 3 percent as scarring from the pandemic, the war in Ukraine, and monetary tightening weigh on economic activity,” Georgieva said on Sunday at a conference in China. “Even with a better outlook for 2024, global growth will remain well below its historic average of 3.8 percent,” she said.
“It is also clear that risks to financial stability have increased,” Georgieva said. “At a time of higher debt levels, the rapid transition from a prolonged period of low-interest rates to much higher rates — necessary to fight inflation — inevitably generates stresses and vulnerabilities, as evidenced by recent developments in the banking sector in some advanced economies.”
Policymakers have acted decisively in response to threats to financial stability, helping ease market stress to some extent, she said. But “uncertainty is high, which underscores the need for vigilance,” she added.
Georgieva also warned about risks of geo-economic fragmentation, which she said “could mean a world split into rival economic blocs — a ‘dangerous division’ that would leave everyone poorer and less secure. Together, these factors mean that the outlook for the global economy over the medium term is likely to remain weak,” she said.
Georgieva spoke during the second day of the China Development Forum in Beijing. The three-day annual event is a social mixer of politics and business, bringing together members of the Chinese Politburo with dozens of CEOs from Western companies like Siemens, Mercedes-Benz and Allianz.
“Fortunately, the news on the world economy is not all bad. We can see some ‘green shoots,’ including in China,” Georgieva said, adding that Beijing is set to account for around a third of the global growth this year.

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( With inputs from : www.politico.eu )

March 23, 2023
UBS buys Credit Suisse in rush deal

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FRANKFURT — Swiss banking giant UBS will buy the country’s second-largest bank Credit Suisse in a deal that will come as a relief to financial markets in Europe and across the world.
UBS said in a statement that the total price is 3 billion Swiss francs, or about $3.25 billion, in UBS shares.
The deal was pushed through in an effort to avoid further turmoil in global banking following the failure of Silicon Valley Bank and another regional lender in the U.S.
“With the takeover of Credit Suisse by UBS, a solution has been found to secure financial stability and protect the Swiss economy in this exceptional situation,” the Swiss National Bank said in a separate statement, noting that the deal was made possible with the support of the Swiss federal government, the Swiss Financial Market Supervisory Authority FINMA and the Swiss National Bank.
The central bank added that UBS and Credit Suisse can obtain a liquidity assistance loan of up to 100 billion francs.
Highlighting the urgency of securing a deal for the bank before markets open on Monday, Swiss authorities adjusted laws to allow further provision of liquidity by the Swiss central bank, while the government agreed to provide additional guarantees.
The expeditious rescue of Credit Suisse was welcomed by the European Central Bank as well as the Federal Reserve in the U.S.
The “swift action” by the Swiss authorities “are instrumental for restoring orderly market conditions and ensuring financial stability,” ECB President Christine Lagarde said in a statement.

The 167-year-old Credit Suisse has been involved in a series of scandals that have undermined the confidence of investors and clients. It has thus found itself in the eye of the storm when the collapse of Silicon Valley Bank sparked fears of a banking crisis.

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( With inputs from : www.politico.eu )

March 15, 2023
The crypto ‘contagion’ that helped bring down SVB

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As U.S. banking regulators begin their post-mortem of Silicon Valley Bank, some pundits are pointing the finger at crypto markets, whose own collapse over the past year left the tech-focused lender hopelessly exposed.
The conventional wisdom about crypto is that it’s “self-referential” — a separate universe to conventional finance — and that its inherent volatility can be contained. The emerging “contagion” theory is that there are enough linkages for extreme turmoil to spill over, much as a virus can sometimes jump from one species to another.
That’s what happened here, according to Barney Frank, the former U.S. congressman who wrote sweeping new banking rules after the banking crisis in 2008, and joined the crypto-friendly Signature Bank as a board member in 2015.
“I think, if it hadn’t been for FTX and the extreme nervousness about crypto, that this wouldn’t have happened,” Frank told POLITICO this week. “That wasn’t something that could have been anticipated by regulators.”
FTX, the crypto exchange that collapsed in November amid allegations of massive fraud, capped a year of turmoil in crypto markets, as investors began withdrawing funds from riskier ventures in response to rising interest rates, which in turn exposed the shaky foundations underpinning the industry. The ensuing “crypto winter” saw the value of the industry plummet by two-thirds, from a peak of $3 trillion in 2021.
Policymakers sought to reassure the public that volatility in the crypto market, blighted by scams and charlatans who sought to profit from investors’ fear of missing out, would naturally be contained. With the collapse of SVB, that claim is facing its biggest test yet.
Patient zero
Under the contagion theory, “patient zero” could be traced back to the implosion of TerraUSD, an “algorithmic stablecoin” that relied on financial engineering to keep its value on par with the U.S. dollar. That promise fell short in May last year following a mass sell-off, creating panic among investors who had used the virtual asset as a safe haven to park cash between taking punts on the crypto market. The origin of the crash is still subject to debate but rising interest rates are often cited as one of the main culprits.
TerraUSD’s demise was catastrophic for a major crypto hedge fund called Three Arrows Capital, dubbed 3AC. The money managers had invested $200 million into Luna, a crypto token whose value was used to prop up TerraUSD, which had become the third largest stablecoin on the market. A British Virgin Islands court ordered 3AC to liquidate its assets at the end of June.

The fund’s end created even more problems for the industry. Major crypto lending businesses, such as BlockFi, Celsius Network and Voyager, had lent hundreds of millions of dollars to 3AC to finance its market bets and were now facing massive losses.
Customers who had deposited their digital assets with the industry lender were suddenly locked out of their accounts, prompting FTX — then the third largest crypto exchange — to step in and bail out BlockFi and Voyager. Meanwhile, central banks continued to raise rates.
The contagion seemed under control for a few months until revelations emerged in November that FTX had been using client cash to finance risky bets elsewhere. The exchange folded soon after, as its customers rushed to get their money out of the platform. BlockFi and Voyager, meanwhile, were left stranded.
Outbreak widens
This is the point where the outbreak of risk in the crypto industry might have jumped species into the banking sector.
Silvergate Bank and Signature Bank, two smaller banks that also failed last week, had extensive business with crypto exchanges, including FTX. Silvergate tried to downplay its exposure to FTX but ended up reporting a $1 billion loss over the last three months of 2022 after investors withdrew more than $8 billion in deposits. Signature also did its best to distance itself from FTX, which made up some 0.1 percent of its deposits.
FTX, the crypto exchange that collapsed in November amid allegations of massive fraud, capped a year of turmoil in crypto markets | Leon Neal/Getty Images
SVB had no direct link to FTX, but was not immune to the broader contagion. Its depositors, including tech startups, crypto firms and VCs, started burning their cash reserves to run their businesses after venture capital funding dried up.
“SVB and Silvergate had the same balance sheet structure and risks — massive duration mismatch, lots of uninsured runnable deposits backed by securities not marked to market, and inadequate regulatory capital because unrealized fair value losses excluded,” former Natwest banker and industry expert Frances Coppola told POLITICO.
Eventually, the deposit drain forced SVB to liquidate underwater assets to accommodate its clients, while trying to handle losses on bond portfolios and an outsized bet on interest rates. As word got out, the withdrawals turned into a bank run as frictionless and hype-driven as a crypto bubble.
Zachary Warmbrodt and Izabella Kaminska contributed reporting from Washington and London, respectively.
This article has been updated to correct the value of the crypto industry.

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( With inputs from : www.politico.eu )

March 14, 2023
Former Greek Finance Minister Varoufakis attacked in central Athens

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ATHENS — Former Greek Finance Minister Yanis Varoufakis was attacked in central Athens late on Friday, suffering a broken nose, cuts and bruises.
The assault, which his party DiEM25 described as a “brazen fascist attack,” took place while Varoufakis was dining in the central Exarchia district with party members from all over Europe.
“A small group of thugs stormed the place shouting aggressively, falsely accusing him of signing off on Greece’s bailouts with the troika [the country’s bailout creditors],” DiEM25 said in a statement. “Varoufakis stood up to talk to them, but they immediately responded with violence, savagely beating him while filming the scene.”
Politicians from across the political spectrum swiftly condemned the assault in Varoufakis, the motorbike-riding, leather-jacket-wearing politician who became well-known as the country’s finance minister in 2015.
As part of the left-wing Syriza-led Greek government, Varoufakis battled the so-called troika and Europe-imposed austerity. While the Greek administration eventually capitulated and signed a bailout agreement, Varoufakis quit government and founded a cross-border far-left political movement, DiEM25.
“They were not anarchists, leftists, communists or members of any movement,” Varoufakis said in a tweet early Saturday. “Thugs for hire they were (and looked it), who clumsily invoked the lie that I sold out to the troika. We shall not let them divide us.”
The Exarchia neighborhood has a reputation for being a bastion of self-styled anarchists. Varoufakis was publicly harassed in 2015 while dining in the same district at the height of the financial crisis.
Greek Minister of Citizen Protection Takis Theodorikakos said police would take all measures to identify and arrest the perpetrators of Friday’s attack. He noted that the DiEM25 leader, “at his own initiative, was not accompanied by his personal police detail” while at the restaurant.

Greece has been hit by the biggest mass demonstrations since the eurozone crisis in recent days, as Greeks have taken to the streets almost on a daily basis to protest the country’s deadliest train crash, ramping up pressure on the conservative New Democracy government ahead of coming elections. The wave of public rage follows a train collision on February 28 that killed 57 people and raised profound questions about the management of the rail system.
The train crash has also sparked deeper questions about the functioning of the Greek state and fresh anger against the political system.
“Let us please stay focused: We are mourning the 57 victims of rail privatization. We support the spontaneous youth rallies, the greatest hope that Greece can change. See you at the demonstrations,” Varoufakis tweeted, as another big rally is scheduled for Sunday.

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( With inputs from : www.politico.eu )

March 9, 2023
Silicon Valley Bank collapse sets off scramble in London to shield UK tech sector

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LONDON — The U.K. government was scrambling on Sunday to limit the fallout for the British tech sector from the collapse of Silicon Valley Bank, a big U.S. lender to many startups and technology companies.
The government is treating the potential reverberations as “a high priority” after a run on deposits drove California-based SVB into insolvency, marking the largest bank failure since the global financial crisis, U.K. Chancellor of the Exchequer Jeremy Hunt said in a statement Sunday morning. U.S. Treasury Secretary Janet Yellen and other policymakers were on alert that problems at SVB could spread.
Hunt said the British government is working on a plan to backstop the cashflow needs of companies affected by SVB’s implosion and the halt in trading of its British unit, Silicon Valley Bank UK. The Bank of England announced on Friday that the U.K. unit is set to enter insolvency.

Silicon Valley Bank’s “failure could have a significant impact on the liquidity of the tech ecosystem,” Hunt said.
The government is working “to avoid or minimize damage to some of our most promising companies in the U.K.,” the chancellor said. “We will bring forward immediate plans to ensure the short-term operational and cashflow needs of Silicon Valley Bank UK customers are able to be met.”
Hunt told the BBC Sunday morning that the government would have a plan that deals with the operational cashflow needs of companies “in the next few days.”
Discussions between the governor of the Bank of England, the prime minister and the chancellor were taking place over the weekend, according to the statement.
Speaking on Sky News Sunday morning, Hunt said that Bank of England Governor Andrew Bailey had made it clear that there was “no systemic risk to our financial system.” But Hunt warned that there was a “serious risk” to the technology and life-sciences sectors in the U.K.
Ministers held talks with the tech industry on Saturday after tech executives in an open letter warned Hunt that the SVB collapse posed an “existential threat” to the U.K. tech sector. They called for government intervention.
Britain’s science and technology minister on Saturday pledged to do “everything we can” to limit the repercussions on U.K. tech companies.
Michelle Donelan, who heads the newly created Department for Science, Innovation and Technology, said in a tweet: “We recognize that the tech sector is often not cashflow positive as they grow and I am determined to stand with them as we do everything we can to minimize impact on the sector.”
Chancellor Jeremy Hunt said protecting the U.K. sector from the impacts of SVB’s collapse was a “high priority” | Justin Tallis/AFP via Getty Images
A bank insolvency procedure for Silicon Valley Bank UK would mean eligible depositors would be paid the protected limit of £85,000, or up to £170,000 for joint accounts.
The Bank of England said in its Friday statement that SVB UK “has a limited presence in the U.K. and no critical functions supporting the financial system.”

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( With inputs from : www.politico.eu )

March 9, 2023
The environmental scars of Russia’s war in Ukraine

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One year of war in Ukraine has left deep scars — including on the country’s natural landscape.
The conflict has ruined vast swaths of farmland, burned down forests and destroyed national parks. Damage to industrial facilities has caused heavy air, water and soil pollution, exposing residents to toxic chemicals and contaminated water. Regular shelling around the Zaporizhzhia nuclear power plant, the largest in Europe, means the risk of a nuclear accident still looms large.
The total number of cases of environmental damage tops 2,300, Ukraine’s environment minister, Ruslan Strilets, told POLITICO in an emailed statement. His ministry estimates the total cost at $51.45 billion (€48.33 billion).
Of those documented cases, 1,078 have already been handed over to law enforcement agencies, according to Strilets, as part of an effort to hold Moscow accountable in court for environmental damage.
A number of NGOs have also stepped in to document the environmental impacts of the conflict, with the aim of providing data to international organizations like the United Nations Environment Program to help them prioritize inspections or pinpoint areas at higher risk of pollution.
Among them is PAX, a peace organization based in the Netherlands, which is working with the Center for Information Resilience (CIR) to record and independently verify incidents of environmental damage in Ukraine. So far, it has verified 242 such cases.
Left: Hostomel, Ukraine, after a Russian assault. Right: Port of Mykolaiv after a Russian strike | Imagery courtesy of Planet Labs PBC
“We mainly rely on what’s being documented, and what we can see,” said Wim Zwijnenburg, a humanitarian disarmament project leader with PAX. Information comes from social media, public media accounts and satellite imagery, and is then independently verified.
“That also means that if there’s no one there to record it … we’re not seeing it,” he said. “It’s such a big country, so there’s fighting in so many locations, and undoubtedly, we are missing things.”

After the conflict is over, the data could also help identify “what is needed in terms of cleanup, remediation and restoration of affected areas,” Zwijnenburg said.
Rebuilding green
While some conservation projects — such as rewilding of the Danube delta — have continued despite the war, most environmental protection work has halted.
“It is very difficult to talk about saving other species if the people who are supposed to do it are in danger,” said Oksana Omelchuk, environmental expert with the Ukrainian NGO EcoAction.
That’s unlikely to change in the near future, she added, pointing out that the environment is littered with mines.
Agricultural land is particularly affected, blocking farmers from using fields and contaminating the soil, according to Zwijnenburg. That “might have an impact on food security” in the long run, he said.
When it comes to de-mining efforts, residential areas will receive higher priority, meaning it could take a long time to make natural areas safe again.
The delay will “[hinder] the implementation of any projects for the restoration and conservation of species,” according to Omelchuk.
And, of course, fully restoring Ukraine’s nature won’t be possible until “Russian troops leave the territory” she said.
Meanwhile, Kyiv is banking that the legal case it is building against Moscow will become a potential source of financing for rebuilding the country and bringing its scarred landscape and ecosystems back to health.
It is also tapping into EU coffers. In a move intended to help the country restore its environment following Russia’s invasion, Ukraine in June became the first non-EU country to join the LIFE program, the EU’s funding instrument for environment and climate.
Earlier this month, Environment Commissioner Virginijus Sinkevičius announced a €7 million scheme — dubbed the Phoenix Initiative — to help Ukrainian cities rebuild greener and to connect Ukrainian cities with EU counterparts that can share expertise on achieving climate neutrality.

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February 21, 2023