Asia markets UBS, Credit Suisse; China, loan prime rates

The Bank of Japan forecast that inflation could slow this year, according to a summary of central bank opinions at its March meeting.

“The year-on-year rate of change in the consumer price index (CPI) is likely to decelerate through mid-2023 due to the impact of government stimulus measures pushing down energy prices,” the report said.

The Bank of Japan said Japan’s economy was “beneficially resilient” but also called for continued monetary easing.

“The current monetary easing, including yield curve control, should be continued until the price stability target of 2% is fully visible,” the report said.

Japan’s consumer price index fell to 3.3% in February from a 42-year high.

— Li Yingxiang

The Monetary Authority of Singapore (MAS) said Monday that UBS’s takeover of troubled rival Credit Suisse is not expected to affect the stability of Singapore’s banking system. Stated.

“MAS said today that following the announcement of its acquisition by UBS Group AG, Credit Suisse Group AG will continue to operate in Singapore without interruption or restriction. Credit Suisse customers will continue to have full access to their accounts. The contract between Credit Suisse and the other party remains intact,” MAS said in a statement Monday.

“The acquisition is not expected to affect the stability of Singapore’s banking system,” MAS said.

MAS added that both banks do not serve individual clients as their main activities in Singapore are private and investment banking.

The Straits Times Index fell 0.58% in early trading. Shares of DBS Bank rose 0.15%, while OCBC Bank and UOB fell 0.49% and 0.18% respectively.

The People’s Bank of China kept prime rates on 1- and 5-year loans unchanged. Nearly all banks were up 0.25 points last week.

The 1-year LPR remained at 3.65% and the 5-year LPR at 4.3%, both unchanged since last August.

The offshore CNY rose 0.14% to trade at 6.8795, while the onshore CNY was flat, trading at 6.885 against the US dollar.

— Lim Hijie

The Federation of Midsize Banks in the United States has asked regulators to guarantee all deposits for the next two years, Bloomberg reports.

The report, citing a letter from the MBCA, argued that deposit insurance would stop rapid withdrawals from smaller banks and stabilize the banking sector.

According to a Bloomberg report, MBCA has proposed that banks themselves raise their deposit insurance valuations to fund an expanded insurance program.

The coalition’s request was made by U.S. Treasury Secretary Janet Yellen to impose an FDIC insurance limit of $250,000 per account on all depositors, even though the FDIC secures all deposits at Silicon Valley banks and signatory banks. It is not protected beyond

— Yo Boon Ping

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— Tan Weizhen

The US Federal Reserve, along with five other central banks, has jointly announced an increase in the frequency of US dollar swap line arrangements from weekly to daily.

The five central banks are the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank.

The frequency of 7-day maturity operations will increase from weekly to daily from March 20th through “at least” the end of April.

In doing so, the Fed said the move would “act as an important liquidity backstop to ease tensions in global funding markets, thereby reducing such strains on the supply of credit to households and businesses.” It helps mitigate the impact of

The move comes ahead of the Federal Reserve’s two-day meeting this week, when it will announce its intentions on interest rates.

— Lim Hui Jie, Jeff Cox

Bernstein estimates that the global EV market has a huge opportunity, with the European market alone expected to be worth $300 billion by 2030.

EV car makers may be an obvious strategy, but Wall Street analysts point to dozens of stocks in different sectors as ways to make money.

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— Xavier Ong

The FDIC has announced a transaction to sell “substantially all deposits and certain loan portfolios” of Signature Bank to Flagstar Bank, a subsidiary of New York Community Bancorp.

The agency said Signature’s 40 former branches will begin operating under the Flagster name on Monday.

The deal includes $38.4 billion in signed assets, including $12.9 billion in loans the FDIC said it purchased at a $2.7 billion discount.

However, Flagstar’s bid did not include approximately $4 billion in deposits related to Signature’s digital banking business. The agency said it will offer these deposits directly to digital banking customers. The FDIC also said about $60 billion in loans remained in trustees.

— Christine Wang

UBS has agreed to buy rival Credit Suisse for $3.2 billion. Swiss regulators have played a key role in facilitating transactions to quell the contagion threatening the banking sector.

Credit Suisse shares plunged last week after its biggest investor, the Saudi National Bank, refused to provide additional funding. despite having taught — Includes loans of up to CHF 50 billion ($54 billion) — The stock plunged 25.5% over the weekend.

Under the transaction, Credit Suisse shareholders will receive one UBS share for every 22.48 Credit Suisse shares. According to UBS, the combined bank will have his $5 trillion investment assets.

— Kim Ha Kyung

The Wall Street Journal’s Chief Economics Correspondent Nick Timiros says the Federal Reserve will decide whether to raise rates by 25 basis points or not at next week’s policy meeting. He said it could depend on future developments.

The Fed is expected to approve a rate hike of 1/4 point (25 basis points) at next week’s meeting. But market observers say the central bank’s next decision on interest rates is less certain over the past week amid the banking crisis.

“I’m hearing the same thing everyone else is hearing: the claim that you should go by 25 and the claim that you should skip it,” he said on CNBC’s “The Exchange.” rice field. “I think it will depend on market conditions and what the risk of this financial turmoil will be in the next few days,” he said.

— Alex Haring

First Republic Bank dropped further in afternoon trading, plummeting more than 30% as investors positioned themselves in the final hour of trading this week. Friday’s plunge has sent the stock down more than 70% since the start of the week.

The decline has also weighed on the SPDR S&P Regional Banking ETF (KRE). It fell 6% on Friday and is expected to lose more than 14% weekly.