Reuters World News - Credit Suisse’s $54 billion Alpine lifeline

Episode Date: March 16, 2023

Can Switzerland’s blank check for Credit Suisse soothe markets? Japan and South Korea’s fence-mending summit. Libya’s missing uranium. Joe Biden and Netanyahu’s judicial reforms. Abortion pill under threat in Texas lawsuit. Learn more about your ad choices. Visit megaphone.fm/adchoices

Switzerland swoops in with a $54 billion lifeline for Credit Suisse. Will it be enough to stem a crisis of confidence roiling world markets? And in a deadly year for both Israelis and Palestinians, we look at why President Benjamin Netanyahu's controversial judicial reforms are creating a problem for Joe Biden. Plus, all the latest between Moscow and Washington on that downed drone, Libya's missing uranium, and inside the Texas courtroom for the most consequential legal ruling since Roe v. Wade was overturned.

It's Thursday, March 16th. This is Reuters World News, bringing you everything you need to know from the front lines in 10 minutes. I'm Kim Vinal in London. Convierte your passion in a business with Shopify and bathe records of ventas with the form of the pay with a better conversion of the world. Has you heard of bien? The mejor conversion of the world. The incredible system of

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with Shopify. Empecia your period of a month on Shopify dotes bar records. We start in

Zurich, now the center of a crisis in global financial markets. Concerns about the health

of Credit Suisse spooked on Wednesday overnight, the bank said it would tap the Swiss Central Bank for a 50 billion franc loan. It's the first major global bank to get an emergency lifeline since the 2008 financial crisis. So are we on the cusp of financial crisis 2.0? Or is this just one bank already dealing with scandals and losses getting tripped up by market panic? Peter Thal Larsson, global editor of Reuters breaking views, says the next 48 hours will be critical.

Nobody's really worrying about banks like Credit Suisse not having enough capital or having lots of bad loans. Credit Suisse's loanbook, as far as we know, is kind of okay, and its capital position is very strong. It's just raised a load of capital. The worry really more is on the liquidity side, is if customers withdraw their money, then no bank really can survive that indefinitely. I think there are some sort of general conditions which are affecting banks on both sides of the Atlantic, even though the starting points are very different than the regulatory frameworks are very different. And the connecting points really are that interest rates are going up. Banks and some investors are getting caught in a weird position because they have portfolios of securities,

which are now worth less because of higher interest rates. The other thing that's new about all of this is that we're compared to 2008 is we're in a much more online, always on world. And so it's possible for customers, even large customers of banks, to move money. very, very quickly. And that's something that we haven't really seen before. And that makes the system, I think, a bit more fragile. Markets took some respite from the Credit Suisse lifeline and shares in the bank jumped over 20% in early trading. But they did fall as much as 30% on Wednesday. And there is still plenty of nervousness among investors more broadly. All eyes will be on the European Central Bank. Will it go ahead with a 50 basis point rate hike later today? The market puts the odds

at 50%. Now to the rest of the headlines around the world. US and Russian military chiefs hold rare talks after the downing of a US drone in international airspace. The Reaper drone is now sitting at the bottom of the Black Sea. Russia says it will try and retrieve the remnants, prompting US security concerns. But chairman of the Joint Chief of Staff General, Mark Millie, has played down those fears. As normal, we would take, and we did, take mitigating measures. So we are quite confident that whatever was of value is no longer a value. The Pentagon says a Russian military jet collided with the propeller of the drone, causing it to crash, while the Kremlin has denied any contact blaming sharp maneuvering by the Reaper.

The UN nuclear watchdog says roughly two and a half tons of natural uranium have gone missing from a site in Libya. In a statement seen by Reuters, the IAEA said 10 drums meant to contain the radioactive material were not there when they carried out an inspection on Tuesday. The visit had been delayed by a year because of the poor security situation. To Tokyo and the arrival of South Korea's President Yuxukyoyol for talks. It's the first such visit for 12 years after decades of mistrust. Now the two sides want to come together and the common ground is the threat from North Korea. Just hours before the president landed, North Korea fired a long-range ballistic missile,

the latest in a series of tests. In Amarillo, Texas, a federal judge hearing arguments in what could be the most consequential legal ruling on abortion since the overturning of Roe v. Wade. The plaintiffs have asked the judge to overturn the federal approval of the main pill used in medical abortions. Gabriel Aborta filed this dispatch. The judge did not rule from the bench, but he asked a lot of questions of both sides. He seemed very interested in hearing more about the plaintiff's argument that the FDA inappropriately approved Mitha Pristone 22 years ago by allowing its approval through an accelerated process.

He also seemed interested in learning about whether he could grant partial relief to the plaintiffs, which might indicate that maybe he doesn't want to take this drug off the market entirely. And he also asked about whether he has the authority to do this. Mass demonstrations like this outside Ben-Gurion Airport are now a weekly reality in Israel. Increasing numbers of Israelis are protesting plans by the hard-rights. government to curb the powers of the Supreme Court. Meanwhile, in neighboring Gaza, a new generation of young Palestinian fighters is raising fears of another interfaida in what has already been a bloody start to the year for Palestinians

and Israelis. In the middle of all this sits Israel's Prime Minister Benjamin Netanyahu. His efforts to enact sweeping changes to the courts and support for Israeli settlements is sparking domestic uproar. It's also ringing alarm bells with some of his long-time Western allies. One of those is President Joe Biden. I spoke to State Department correspondent Simon Lewis in Washington about how Beebe's actions are reverberating in the corridors of power in the US. I think this situation in Israel is posing a really difficult challenge for the Biden administration. Obviously, the Israeli society is deeply divided over these changes and it comes at the same time as

rising violence in the West Bank and the new government has authorized new settlements after specifically being warned by the Biden administration that that could worsen tensions. What could this balancing act mean for President Biden coming into elections next year? Joe Biden talks a lot about his long relationship with the state of Israel as one of the first countries that he visited as a U.S. senator and he has described himself as a Zionist, But the far-right nature of this new government in Israel is posing a problem to that. Domestically, it makes for a tricky situation with people to Biden's left calling for a much stronger response to events in Israel, whereas, you know, traditionally there has been,

and there is still a lot of support on both sides of the aisle in Washington for the state of Israel. Do you think Biden himself is concerned about these judicial changes? critics say that it's consolidating power in Netanyahu's hands? It's hard to say in terms of what they said publicly, the Biden administration and Biden himself has emphasized that it's a reflection of the really vibrant democracy that Israel has, that there is this level of debate over such important changes. The U.S. government is engaged much more behind the scenes, and there I'm sure they're saying that they want to see this resolved because it's such an important ally in a vital region.

Simon, thank you so much. Thank you. We've entered the first round of March Madness. For our listeners around the world, that's a college basketball tournament. Traditionally, it's when Americans spend their days and nights trying to beat friends, family and co-workers at picking the winners of what's called the NCAA tournament bracket. This year is a little different. Gambling is legal.

Our Business of Entertainment reporter, Dawn Chimalesky, is here to help me understand. Hi, Dawn. Good morning, Kim. How are you? Very well. So we are heading into March Madness in kind of a new world where betting is legal, almost, no matter where you live. How does that change the dynamic? As you mentioned, Kim, people are betting on the outcome of this tournament.

Forever, there are workplaces across America have been running these so-called brackets where people can wager on the outcome of. of the 67 games over three weeks. Here's what's different. Now, sports betting is legal in 36 states plus the District of Columbia. And as much as $15.5 billion will be wagered over the next three weeks betting on the outcome of this contest. It's a lot of money. Do you think it's adding to the excitement?

So the media executives who talk about sports betting is sort of a companion to the game experience say that for a younger viewer, it adds to their engagement in. in the sports. They tend to watch the games because they have something wagered on the outcome. And so it's driving sort of viewership of these competitions and adding an element of excitement. With all these extra bets taking place, are there any concerns about maybe creating a new generation of gambling addicts? There's definitely a concern. Gambling researchers and those who specialize in addiction worry about this flood of advertising, promoting sports betting, and, you know,

And the ease of one-click betting from the home may well increase the risk of addictive behavior. And the industry does, in fact, note that sports betting is not available to minors. So it would obviously be a concern in March Madness because it is a college contest, so its audience might well be younger. So that is illegitimate concern. Dawn, thank you so much. Thank you. That's it for this edition of Reuters World News.

We'll be back on Friday with a special edition to mark 20 years. since the U.S. invasion of Iraq. In the meantime, you can find more trusted news at Reuters.com.