Investors, depositors, regulators and many others have to puzzle out the consequences of the weekend rescue of Silicon Valley Bank. The biggest bank failure since the financial crisis had risked leaving many startups, who deposited billions of dollars there, fearing that they had lost those funds.
An intervention by authorities on Sunday night in the United States appears to have ensured that the depositors’ funds are safe. On Monday morning, in Britain, it was announced that HSBC is taking over the British arm of SVB.Is this the end of the affair—or the start of more instability? Another bank, Signature Bank, a New York-based lend, had to be shut by American regulators, though depositors were assured, again, that they would have full access to their funds. In the judgement of my colleagues who analyse the banking system, SVB was uniquely susceptible to a run. But others may be vulnerable, too. What’s coming next? Intervention by the state has helped to address fears of instability, but if more help for banks is needed, then expect to hear talk about moral hazard. (And if you want to double check on moral hazard, I recommend looking it up in our new A-Z of economics.)
Meanwhile, across the Atlantic, as spring is all but here in London, I sense a brightening mood. In Kyiv, too, residents are marking the appearance of longer days and warmer weather. Just getting through the winter has been an ordeal for civilians across Ukraine. For months, Russia’s armed forces tried —with missiles and drones —to smash the country’s civilian infrastructure. After a lull, they struck again last week, attacking the power network. The goal was to freeze families and leave them in the dark, close schools and hospitals, shut transport, and sap the will of Ukrainians to resist. In that respect, thankfully, the Russian invaders have been defeated.
The readiness of civilians to stand up to the invader is crucial. Vladimir Putin’s way of conducting wars —see the human toll in Chechnya —shows he has no compunction about inflicting suffering on civilians. But could even he grow concerned that too many of his own soldiers are dying? More Russian soldiers, including many who were forcibly conscripted, have died in Ukraine since last February than the total killed in all the wars that Russia (or the Soviet Union) fought since 1945. Have a look at this chart for the comparison.
Russia’s forces have now moved into a part of the town of Bakhmut, from where we recently published a devastating photo essay. For all the lives and equipment that the invaders have expended there, that looks to be a partial and costly gain. Meanwhile, I’d recommend you download the third episode of our new podcast series, “Next Year in Moscow”, in which our Russia editor, Arkady Ostrovsky, considers the dead weight of history —notably Stalinism —and spends time in Georgia reflecting on how Russia’s invasion of that country, 15 years ago, presaged events in Ukraine today.
Over in China, we have our eyes on the new prime minister, Li Qiang, who was confirmed in the powerful job on March 11th. He is a puzzle, but is surely one the world needs to solve. He is a protégé of Xi Jinping with a tough manner. On one hand he has lauded entrepreneurial daring and private business, yet he has also tried to tighten the Communist Party’s control over the economy. Read our new profile of China’s new prime minister to get an understanding of a person who, along with Mr Xi, will surely shape the prospects of the world’s second biggest economy.
Finally, back in Britain, many are distracted by the BBC’s self-inflicted wounds in suspending from the airwaves a much-loved sports presenter, Gary Lineker, because he dared to share an opinion about migration policy that upset members of the ruling Conservative party. Boycotts of sports shows by others on the BBC, at the weekend, became the talk of the country this weekend. It’s one of those fusses that are mostly a light distraction from more serious stuff. But there are questions—on free speech, questions of political bias, the lack of independence of the state-funded broadcaster—that will be debated intensely for days to come. None of it will reflect well on the BBC.
Many thanks for all of your recent messages. I was cheered to spot fan mail from Sheilah Forward, a reader in Jamaica, as our team keeps a note of the wonderfully wide range of countries where we have readers. Awodipe Tolu, in Nigeria, was less happy with me, objecting to my comments on the election in his country and writing to express his dismay at the result. Peter Uetz, who won’t be pleased to see our latest story on Britain’s demographic woes, argues that we are wrong to assume that population slumps in many countries count as a bad thing. As a biodiversity researcher, he would rather talk up the benefits of having fewer humans around. Last, Caitlyn Casten, who enjoyed exploring our A-Z of Economics, suggests we create one for political terms. I’m intrigued to know, Caitlyn, whether others would be keen, too. Or, alternatively, should an A-Z of international politics, or perhaps military terms, be our next priority. Any guidance from readers would be most welcome.
Please continue to write to me at economisttoday@economist.com, or follow me on Twitter.
Adam Roberts, Digital editor
