The daily business briefing: March 20, 2023

1. UBS to buy Credit Suisse in government-backed deal

Swiss banking giant UBS on Sunday agreed to buy rival Credit Suisse in a historic emergency deal aiming to restore calm amid a global banking crisis. UBS will pay $3.23 billion to acquire the 167-year-old Credit Suisse, Switzerland's second largest bank. UBS also will assume $5.4 billion in Credit Suisse losses, but the Swiss government, which pushed the deal, will backstop billions in potential losses. Just after the agreement was announced, the U.S. Federal Reserve, European Central Bank, and other major central banks issued statements seeking to ease market panic with assurances that customer deposits remain safe in the wake of the collapse of two regional U.S. banks earlier this month.

Reuters

2. First Republic shares dive after latest downgrade

First Republic Bank shares plunged by as much as 37 percent in pre-market trading on Monday after S&P Global cut its credit rating again. First Republic's stock fell a record 72 percent last week after the collapse of Silicon Valley Bank and two other lenders dragged down confidence in the financial industry. Shares in another regional bank, Western Alliance Bancorp, fell 6.3 percent early Monday. The shares of banking giants JPMorgan Chase, Wells Fargo, Bank of America, and Citigroup fell more than 1 percent despite the emergency sale of Credit Suisse to rival Swiss bank UBS, which the Swiss government pushed through to restore confidence in the global banking system.

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Bloomberg

3. Stock futures mixed after UBS agrees to buy Credit Suisse

U.S. stock futures struggled on Monday as concerns about the banking system continued despite UBS's purchase of troubled Credit Suisse in a deal pushed by the Swiss government. Futures tied to the Dow Jones Industrial Average, S&P 500, and Nasdaq were all down 0.1 percent at 7:30 a.m. ET. Regional banks face pressure to shore up deposits following the collapse of Silicon Valley Bank earlier this month, which prompted federal regulators to backstop uninsured deposits and offer funding for banks that need it. The turmoil has fueled speculation that the Federal Reserve, which holds a policy meeting this week, might ease its aggressive interest-rate hikes as concerns of financial contagion rise.

CNBC

4. New York Community Bank buys big chunk of Signature Bank

New York Community Bank has agreed to buy a big part of Signature Bank, the second bank to fail in the current banking crisis, in a $2.7 billion deal, the Federal Deposit Insurance Corp. said Sunday. Signature Bank's 40 branches will take the name of Flagstar Bank, a New York Community Bank subsidiary, on Monday, The Associated Press reported. The FDIC said NYCB will take over $38.4 billion in New York-based Signature Bank's assets, about a third of Signature's $110 billion total when it failed. Signature, based in New York, was a large commercial lender that had pushed into cryptocurrencies seeking growth.

The Associated Press

5. TikTok sibling CapCut avoids scrutiny

China-based ByteDance has another app that recently surpassed TikTok in new U.S. downloads, The Wall Street Journal reports. App trackers indicate that CapCut, a video-editing tool people use to easily create online videos and memes, was downloaded more in recent weeks than TikTok. Since it's a tool rather than a social media platform, CapCut hasn't faced the same scrutiny as TikTok, the short-video sharing app U.S. leaders argue poses a security risk because Beijing could use it to access user data, according to the Journal. CapCut, launched in 2020, has more than 200 million monthly active users, compared to TikTok's more than one billion, according to Shanghai-based data tracker Diandian.

The Wall Street Journal