Yahoo Finance Credit Suisse latest: Doubts over UBS rescue amid bond markets turmoil
UBS has found itself caught up in market turmoil over a key method of bank funding after its £2.7bn takeover of Credit Suisse.
Prices of its so-called AT1 bonds have plummeted amid a crisis of confidence in the debt instrument.
Credit Suisse had the value of its own $17bn worth of AT1 bonds wiped out under the terms of its takeover enforced by Swiss regulators.
However, now investors are demanding higher returns to take on the debt, with yields surging today from just over 11pc to nearly 17pc.
It comes as markets demonstrate growing doubts over the takeover designed to avert a global banking crisis.
Gold has risen above $2,000 an ounce for the first time in more than a year after the banking crises in the US and Europe triggered a return to haven buying.
The European Central Bank has said the European financial system is "resilient" and has sufficient liquidity, as banking shares plunged.
Banking stocks across the FTSE 100 and FTSE 250 remain down 1.3pc.
Meanwhile, oil and gas prices have tumbled on fears the fallout would slow the global economy.
08:08 PM
Good night!
That's it from me. We'll be back first thing tomorrow. Here's our latest story to keep you busy until then: Row breaks out between Brussels and the Swiss over Credit Suisse rescue deal
07:39 PM
Letterbox florist Bloom & Wild returns to profitability following Mother's Day surge
Letterbox bouquet business Bloom & Wild is expected to reveal improved financials following a Mother's Day surge.
The London-headquartered company will report that turnover rose 3.6pc to £145.5m in the year to March 2022, while its core UK business was profitable during that period.
“Mother’s Day this year was a sell-out, with record sales of our premium hand tied bouquets and strong demand for our new, broader gifting ranges. Despite a challenging environment our revenues are up three fold on pre-Covid levels,” said chief executive Aron Gelbard.
The accounts will also show that pre-tax profits fell to a £18.4m loss down from a £26m profit, the Evening Standard reported. However, the group has since returned to profitability during 2023, according to Mr Gelbard.
It comes after Bloom & Wild acquired rivals in Amsterdam and France during the pandemic to expand its European operations.
07:22 PM
Ministry of Defence resumes payments to the Army's delayed armoured vehicle project
Payments towards the Army’s £5.5bn Ajax armoured vehicle programme will resume after major setbacks.
The Ministry of Defence has agreed to hand over £480m to project developer General Dynamics later this month, more than two years after payments were halted in December 2020.
Nearly 600 armoured vehicles were supposed to enter service in 2017, but the project was delayed after encountering problems with noise and vibration which injured soldiers.
Ben Wallace, Defence Secretary, said:
Having worked closely with General Dynamics to address the issues, I am pleased to say that we are making progress and are now on course to see the delivery of a suite of hundreds of battle-ready vehicles for the British Army.
Further payments will be made against the new schedule, which expects the first vehicles being ready from July 2025.
06:55 PM
Protesters assemble outside of Credit Suisse's Zurich HQ
About 200 protesters have reportedy gathered outside Credit Suisse's headquarters in Zurich this evening following the bank’s collapse.
The demonstrators threw eggs at the Paradeplatz office, and chanted “revolution” and “eat the rich", Bloomberg reported.
Police officers looked on as the protesters made speeches against the power of Switzerland’s financial sector.
Demonstrations have also taken place outside Credit Suisse's office in Geneva.
Oh- we have a little protest in front of the Credit Suisse offices in Geneva… « UBS, Credit Suisse, accomplices! » (left wing protest) pic.twitter.com/GnMYPjKYCh
— Ssbak🇨🇭 (@TheSsbak) March 20, 2023
06:34 PM
UBS takeover has 'no impact' on Saudi National Bank's growth plans
Saudi National Bank has said its strategy will not be impacted by reduced valuation on its investment in the Swiss bank after its takeover by rival UBS.
"Changes in the valuation of SNB's investment in Credit Suisse have no impact on SNB's growth plans and forward-looking 2023 guidance," Saudi National Bank said in a bourse filing on Monday.
The Saudi lender, the kingdom's largest by assets, acquired almost 9.9pc of Credit Suisse for 5.5bn riyals (£1.08bn) last November.
SNB, the largest shareholder in Credit Suisse, is now sitting on a loss of roughly $1.17 billion on its investment, according to Reuters.
The Credit Suisse investment represents less than 0.5pc of the Saudi lender's total assets of more than 945bn riyals as of last December, and there is no expected impact on profitability, the statement said.
06:06 PM
US law firm prepares legal action over Credit Suisse's AT1 bonds
Quinn Emanuel is preparing its lawyers across UK, US and Switzerland to launch legal action on behalf of holders of Credit Suisse’s AT1 bonds.
Its lawyers are already in discussions with a number of holders of the capital instruments whom represent a "significant percentage" of the notional value of AT1 bonds issued by Credit Suisse, according to the firm.
The disputes specialist is exploring possible legal action available to such bondholders after around $17bn of AT1s were wiped out under the UBS takeover.
Quinn Emanuel is expected to hold a call for AT1 bondholders on Wednesday to explain the potential avenues of recourse.
05:15 PM
Startups urged to pull cash from small US banks to protect themselves
Venture capital firms have urged startups to pull their cash from small banks and shift them into the likes of JP Morgan and Bank of America in order to protect themselves.
Senior technology reporter Gareth Corfield has more:
The advice, contained in a note to startup founders, was signed by seven prominent VC firms including Silicon Valley’s Kleiner Perkins, General Catalyst, Redpoint Ventures and others.
“Maintain accounts with 2-3 separate banks at all times, with one being one of the four largest in the US,” said the note, which named the four as Bank of America, Citi, JP Morgan, and Wells Fargo.
Founders were also advised to develop a short-term investment strategy with a “duration below 6 months”. Investors added: “Remember the goal is to preserve capital, not generate hedge fund returns.“
Here's what BlackRock boss Larry Fink has to say
04:50 PM
Collapsing banks could spark failure across supply chains
The collapse and rescue of several major banks has implications for the wider networks of supplier chains that these institutions work with or for.
Wayne Scott, regulatory compliance solutions lead at NCC Group Software Resilience, explained:
Supplier failure can rapidly spread contagion. One link fails, and others follow suit.
The risk of supplier failure, service deterioration and concentration risk is now heightened, which is interesting to consider through a technology and IT lens given how digital work now is – much more advanced than at the time of the 2008 crash, but even then we saw an impact on IT operational continuity.
Economic shocks like these dramatically increase the frequency, velocity, duration, impact and settlement of operational IT outages.
As a supplier building customer confidence is going to be key now, to show that no matter what happens in the coming weeks, services are resilient and available in these turbulent times. Stressed exit plans, demonstrating the ability to remediate from an unexpected supplier failure, are paramount.
The likes of the recent near collapse shows just how critical these plans are, and others in the industry should act on this swiftly and responsibly.
04:24 PM
Foot Locker's new CEO unveils plans to revamp business
Foot Locker's new chief executive has unveiled a restructuring plan that aims to deliver $9.5bn in annual sales by 2026.
The shoe retailer will open new store formats away from shopping malls, push a loyalty program and pump investment into technology, Mary Dillon told investors today.
The sales target is around 9pc higher than the $8.7bn in revenue the company recorded in its latest fiscal year.
Foot Locker is also aiming to reduce its reliance on products from sportswear giant Nike, which currently represent about 70pc of sales. Executives want to reduce this to as low as 55pc.
As part of the revamp, Foot Locker is restructuring its business in Asia by closing its stores and e-commerce operations in Hong Kong and Macau.
It will convert existing stores in Singapore and Malaysia to a licensed model and seek out growth in the region through partnership deals.
The company trim about 10pc of its total store network, or about 400 shops, as part of cost cutting measures.
03:54 PM
Leadenhall Market office tower will ‘irreversibly harm’ City of London
A proposed new skyscraper in the City of London will cause “irreversible harm” to the identity of the capital’s distinctive financial district, the Victorian Society has warned.
Business reporter Riya Makwana has the details:
A proposed new skyscraper in the City of London will cause “irreversible harm” to the identity of the capital’s distinctive financial district, the Victorian Society has warned.
Plans to develop a new 32-storey tower in the Leadenhall Market Conservation Area will leave the vicinity “diminished and disrespected”, the heritage group said.
It added that there was “a danger that the city will become a monoculture of glass towers”.
Grade II listed Leadenhall Market, which dates back to 1321, was originally a meat, poultry and game market at the centre of Roman London but is now home to a number of boutique retailers, restaurants and wine bars.
In the 1800s Sir Horace Jones, also the architect of Billingsgate and Smithfield Markets, redesigned Leadenhall as it appears today, with mediaeval street patterns, Corinthian columns and a cast-iron and glazed roof.
03:33 PM
Handing over
That's all from me today. My esteemed colleague Adam Mawardi will take over from here to keep you up to speed with what's happening on the markets.
03:29 PM
Euro zone banks liquidity 'way in excess of requirements,' says Lagarde
Euro zone banks' liquidity and capital buffers are "way in excess of requirements," European Central Bank chief Christine Lagarde has.
The ECB president was speaking amid market turbulence after the UBS takeover of Swiss rival Credit Suisse.
She told a European Parliament hearing: "We are very confident that the capital and liquidity positions of the euro area banks are very satisfactory, with significant capital ratio and liquidity coverage ratio way in excess of requirements."
03:23 PM
Financial turmoil will force Bank of England to abandon rate rise, City predicts
The Bank of England will be forced to abandon an interest rate rise this week, City analysts have predicted, amid turmoil in the financial markets following UBS's emergency takeover of Credit Suisse.
Economics reporter Melissa Lawford has the latest:
Barclays has scrapped its expectation for a 0.25 percentage point rise in the Bank Rate on Thursday, following widespread instability in financial markets. Now, it expects the Bank will hold rates at 4pc.
Silvia Ardagna, chief European economist at Barclays, said: "In light of elevated tensions in the US and European banking systems, we change our call and expect the Bank of England to pause next week and reassess the need for further hikes at the May meeting."
The crisis in US regional banks and the pressure on Credit Suisse overshadowed the Chancellor's Budget last week and the Office for Budget Responsibility's assessment of the public finances, Ms Ardagna said.
Read how the change in Barclays' forecasts mirrors a sea change in the consensus among investors.
03:11 PM
Central banks seek to reassure markets over AT1 investments
European authorities sought to restore investor confidence in the sort of risky bank bonds that were wiped out in the shotgun deal to save Credit Suisse.
Investors were dumping the notes, known as additional tier 1 bonds or AT1s, issued by many other European banks on concern that they too could get wiped out in a similar situation.
Some $17bn of AT1s were wiped out under the rescue of Credit Suisse brokered by Swiss regulators.
AT1s from UBS and Deutsche Bank fell by more than 10 cents on today.
Both the ECB and the Bank of England have released statements saying that in the event of any future collapse, shareholders would absorb losses first before AT1s are written down.
The market for AT1 bonds has been a key source of funding for banks in the wake of the 2008 financial crisis.
Patrik Kauffmann, a fixed-income portfolio manager at Aquila Asset Management, said "this just makes no sense".
He added: "Shareholders should get zero" because "it's crystal clear that AT1s are senior to stocks."
03:01 PM
Amazon plans to be 'leaner' but 'still invest robustly'
Explaining the decision to cut another 9,000 jobs on top of the 18,000 announced in January, Amazon chief executive Andy Jassy said:
Some may ask why we didn’t announce these role reductions with the ones we announced a couple months ago.
The short answer is that not all of the teams were done with their analyses in the late fall; and rather than rush through these assessments without the appropriate diligence, we chose to share these decisions as we've made them so people had the information as soon as possible.
He added: "The overriding tenet of our annual planning this year was to be leaner while doing so in a way that enables us to still invest robustly in the key long-term customer experiences that we believe can meaningfully improve customers’ lives and Amazon as a whole."
02:49 PM
Amazon to cut 9,000 more jobs
Amazon will lay off an additional 9,000 staff in what was already the largest round of job losses in the tech giant's history.
Chief executive Andy Jassy announced the cuts to staff today, saying they would take place in the coming weeks.
He added it will primarily affect Amazon Web Services, human resources, advertising and its Twitch livestreaming service.
The company had already begun cutting around 18,000 roles from its global workforce.
02:40 PM
Strike action was worth it, says RMT boss Lynch
Speaking on BBC Radio 4's World At One programme, RMT general secretary Mick Lynch said that members had decide they wanted to end the dispute.
He described the union as "a democracy and we had a full conversation with our members leading up to this".
Asked whether the strike action had been worth it, he said:
I think it was because originally we were offered 2pc for last year, that's gone up to 5pc but there's an underpin for the lowest paid. So some people will get up to 14pc, the very lowest paid, and there's a graduated scheme.
It's very similar to other deals that you've heard about in the public sector.
So it's more than double the initial offer and we've stopped mass redundancies.
We were told there'd be over 3,000 redundancies. There probably won't be any now and we've got some real improvements on the travel facilities that our members have been wanting for a couple of decades now.
02:24 PM
Bank shares rise as Credit Suisse rescue eases concerns
US banking stocks have risen and Europe's lenders have recovered from a sharp early sell-off after UBS's state-backed takeover of Credit Suisse.
Bonds issued by major European banks fell after some bondholders were wiped out in the deal.
However, UBS shares were 5pc higher as its takeover of its 167-year-old rival appeared to close off one source of worry for the global banking sector.
UBS bounced back from a 16pc slump earlier that was triggered by concerns about the long-term benefits of the deal and the outlook for Switzerland, once considered a paragon of sound banking.
European bank shares inched into positive territory while shares in US financial giants Citigroup and JPMorgan Chase rose 1.2pc and 0.7pc respectively.
PacWest Bancorp jumped 21pc after the bank said deposit outflows had stabilized, while New York Community Bancorp also gained 33pc after the bank's unit agreed to buy deposits and loans from Signature Bank.
The S&P 500 and the Dow Jones Industrial Average have gained, while investors weighed odds of the Federal Reserve pausing its rate hikes this week.
02:14 PM
Government must make 'right offer' to end rail dispute, says RMT
In a turnout of nearly 90pc, RMT members in Network Rail voted by 76pc to 24pc in favour of the latest pay offer, signalling an end to the bitter row, which led to a series of strikes in recent months.
The union said the deal includes an uplift on salaries of between 14.4pc for the lowest paid grades to 9.2pc for the highest paid, increased backpay, a no compulsory redundancy agreement until January 2025 and rail travel benefits.
RMT general secretary Mick Lynch said:
Strike action and the inspiring solidarity and determination of members has secured new money and a new offer which has been clearly accepted by our members and that dispute is now over.
Our dispute with the train operating companies remains firmly on and our members' recent highly effective strike action across the 14 train companies has shown their determination to secure a better deal.
If the Government now allows the train companies to make the right offer, we can then put that to our members, but until then the strike action scheduled for March 30 and April 1 will take place.
The ball is in the Government's court.
01:41 PM
US markets move higher at opening bell
It has been a day of turmoil on markets, but things look mainly positive on Wall Street.
The Dow Jones Industrial Average has risen by 0.7pc to 32,072.45 after the opening bell. The broad-based S&P 500 has risen 0.3pc.
However, the tech-heavy Nasdaq Composite has fallen 0.3pc to 11,593.02.
01:37 PM
Network Rail staff at RMT accept pay deal
Members of the RMT in Network Rail have voted to accept a pay offer, the union announced.
However, it does not affect its members at 14 train operators across Britain, who still plan to hold strikes in a separate dispite.
Transport Secretary Mark Harper said:
I am pleased Network Rail's RMT members have voted to accept a fair and reasonable 5pc plus 4pc pay offer, over two years, that the Government worked hard to facilitate.
While this is good news, unfortunately, RMT members who work for train operating companies are not being given the same chance to bring their dispute to an end.
That's because the RMT has refused to put the Rail Delivery Group's very similar offer to a vote, denying these members the pay rise they deserve.
"That's why I am once again urging the RMT to call off their upcoming strikes across train operating companies, put the Rail Delivery Group offer to a vote, and give all of their members a say.
01:33 PM
Bank of England reassures AT1 bondholders in UK
The Bank of England has clarified its position on bond markets - and who loses out if a financial institution needs to be bailed out.
It said it would follow its existing rules, which would see AT1 debt holders ranked ahead of shareholders in the event of a collapse - unlike what has happened with the rescue of Credit Suisse. It said:
The UK's bank resolution framework has a clear statutory order in which shareholders and creditors would bear losses in a resolution or insolvency scenario.
This was the approach used for the recent resolution of SVB UK, in which all of SVB UK's Additional Tier 1 (AT1) and T2 instruments were written down in full and the whole of the firm's equity was transferred for a nominal sum of £1.
AT1 instruments rank ahead of CET1 and behind T2 in the hierarchy. Holders of such instruments should expect to be exposed to losses in resolution or insolvency in the order of their positions in this hierarchy.
The Bank welcomes the comprehensive set of actions taken yesterday by the Swiss authorities in order to ensure financial stability. The UK banking system is well capitalised and funded, and remains safe and sound.
01:26 PM
Sterling shifts higher as market turmoil weakens the dollar
Sterling has risen as the Swiss government-backed takeover by UBS of Credit Suisse failed to soothe market nerves, weakening the dollar.
Global financial markets continue to be rattled by the collapse of Silicon Valley Bank and the troubles of larger Swiss lender Credit Suisse.
The boost in the pound comes ahead of the Bank of England's interest rate decision on Thursday and inflation data due this week.
UK inflation data on Wednesday is expected to show some easing and amid the global financial market instability.
Money markets are pricing in a 50pc chance of no interest rate hike by the Bank of England on Thursday and the same chance of a 25 basis-point increase.
Sterling was up 0.6pc against the dollar to more than $1.22. It was flat against the euro at 87 pence.
Goldman Sachs said it sees no economic growth in Britain this year and no longer expects the BoE to hike its policy rate in May, leaving its terminal rate forecast for BoE at 4.25pc.
01:20 PM
UBS shares rise after turmoil
There are some signs of the ship steadying amid the banking turmoil.
After plunging as much as 14pc earlier, UBS shares are now up on the day by 1.4pc.
Sentiment may be turning slightly for the better after early readings on its agreement to buy Credit Suisse and central bank moves to boost dollar liquidity.
The Fed and five other central banks announced coordinated action to boost liquidity in US dollar swap arrangements to ease strains in the global financial system.
01:13 PM
Credit Suisse staff fear 'inevitable' job losses
Job losses are expected at Credit Suisse's UK office after the historic sale of the Swiss bank to its bigger rival UBS on Sunday, with an impact on the lender's British workers seen as being "inevitable".
UBS said it plans to run down the investment bank division of Credit Suisse as part of its merger plans, but stressed it is "too early to say" exactly how staff across the regions will be affected.
Credit Suisse employs around 5,500 people in the UK, based in London's Canary Wharf, which includes investment bankers, wealth and asset managers, as well as staff across teams such as technology, risk and compliance.
The stricken lender has been scooped up by UBS in a rescue deal in efforts to avoid further turmoil in global financial markets, and will mean the two businesses merge together.
UBS has about 6,200 people in the UK with offices in London, Birmingham, Manchester, Leeds, Newcastle and Edinburgh.
The former chief executive of UBS in the UK, Mark Yallop, said he thinks job losses will be "inevitable" as a result of the merger and chopping down the investment bank.
12:23 PM
UK banking system 'safe,' says No 10
Downing Street has said the UK banking system remains "safe and well-capitalised" following the takeover of the troubled Credit Suisse.
The Prime Minister's official spokesman said that Rishi Sunak has been regularly updated on the situation by the Treasury and the Bank of England, and has been in touch with the Swiss president. He said:
Obviously it is good that a resolution has seen secured.
As the Bank of England has said, we believe the UK banking system remains safe and well-capitalised.
We have a strong regulatory system and we have taken a number of steps over the past 15 years, together with the Bank of England, to strengthen that system.
12:19 PM
Wall Street on course to open flat
US stock market futures have bounced back after an earlier drop following the Swiss government-brokered sale of Credit Suisse to UBS over the weekend.
Contracts on the S&P 500 were steady as major lenders JPMorgan, Bank of America, Wells Fargo and Citigroup rebounded from pre-market lows.
First Republic Bank plunged as S&P Global cut its credit rating for the second time in a week. Nasdaq 100 futures erased a decline.
It comes as the FTSE 100 has bounced back from earlier falls and is now up 0.3pc to 7,358.39. The Europe-wide Stoxx 600 has risen 0.4pc after earlier falls.
Michael Field, European equity market strategist at Morningstar, said:
Investors prefer to overreact first and find a bottom, then slowly adjust if the news isn't as bad as first thought.
The UBS takeover in principle is good news, an expedited outcome, rather than wait and watch to see if Credit Suisse could actually manage the necessary restructuring.
11:50 AM
How the Credit Suisse rescue wiped out $17bn – and threatened the next crisis
The emergency takeover of Credit Suisse by rival UBS over the weekend leaves few obvious winners, but holders of its riskiest bonds are certainly among the biggest losers.
Banking & financial services correspondent Simon Foy explains what has happened:
In a move that startled markets, the Swiss financial regulator Finma ruled that investors in $17bn (£13.9bn) of Credit Suisse bonds, known as AT1s, will have their investment wiped out entirely as part of the shotgun marriage between the country’s two biggest banks.
On Sunday, Finma said: "The extraordinary government support will trigger a complete writedown of the nominal value of all AT1 shares of Credit Suisse in the amount of around SFr16bn (£14.1bn), and thus an increase in core capital."
Yet the move raises questions about the hierarchy of investor claims, with Credit Suisse’s shareholders receiving $3.3bn as part of the deal, and risks sending the $275bn market for bank funding into chaos.
Read what ATIs are and what has happened to them at Credit Suisse.
11:39 AM
Ofwat tightens rules over water company dividends
The UK water regulator will be able to stop suppliers paying out dividends if they fail to meet performance standards.
Under new powers announced today, Ofwat said it can block payments to shareholders if "they would risk the company's financial resilience" and take enforcement action if the pay-outs are not linked to performance.
The Government said it backs the new proposed powers.
Ofwat, which oversees the sector in England and Wales, said the changes will cut the risks a firm's poor financial health may pose to customers or its environmental responsibilities.
If a company falls short in supporting customers or the environment, Ofwat will be able to step in and take enforcement action, the watchdog said.
11:26 AM
AT1 bonds tumble after Credit Suisse deal
European bank shares and AT1 bonds from other European banks have tumbled as traders re-priced the risk and cost of banks' capital.
Bid prices on AT1 bonds from banks including Deutsche Bank, HSBC, UBS and BNP Paribas have dropped 9-12 points today, sending yields sharply higher, data from Tradeweb showed.
A London-listed exchange-traded fund which tracks banks' AT1 debt tumbled 15.7pc.
Sean Darby, global equities strategist at Jefferies in Hong Kong, said:
With the restructuring of Credit Suisse, no-one had really thought about how it would affect the AT1 and that was a fat tail risk.
What the market is saying today, is that between now and maturity there's a risk on this debt which hadn't been priced correctly in light of what's happening in banks in the U.S. and around the world.
11:02 AM
European banking sector 'resilient,' insists ECB
The European Central Bank has said the European financial system is "resilient" and has sufficient liquidity, as banking shares plunged following the Credit Suisse takeover.
The ECB said in a joint statement with the European Banking Authority and the EU's Single Resolution Board that they welcomed the actions taken by the Swiss authorities "to ensure financial stability".
They added: "The European banking sector is resilient, with robust levels of capital and liquidity."
The ECB stressed in its joint statement that shareholders were the first in line to absorb losses before holders of so-called AT1 bonds were hit.
The rescue by UBS will see holders of around $17.3bn worth of the high-risk so-called additional tier 1 (AT1) bonds at Credit Suisse lose their investment, Swiss regulators announced.
10:43 AM
UK banking system 'safe and sound,' says Bank of England
The Bank of England has insisted the UK banking system "remains safe and sound" after the market turmoil following the takeover of Credit Suisse.
In a statement released this morning, the Bank said:
We welcome the comprehensive set of actions set out by the Swiss authorities today in order to support financial stability.
We have been engaging closely with international counterparts throughout the preparations for today’s announcements and will continue to support their implementation.
The UK banking system is well capitalised and funded, and remains safe and sound.
10:41 AM
North Sea oil and gas workers vote to strike
Oil and gas operators in the North Sea are being warned of a "tsunami" of industrial unrest after workers voted to strike over jobs, pay and conditions.
Unite said around 1,400 of its members in a number of companies operating in the UK Continental Shelf (UKCS) are involved in the dispute.
The union warned that platforms and offshore installations will be brought to a "standstill" due to the specialised roles its members undertake.
Unite general secretary Sharon Graham said:
Oil and gas companies have been given free rein to enjoy massive windfall profits in the North Sea; drilling concessions are effectively licences to print money.
1,400 offshore workers are now set to take strike action against these employers who are raking it in but refusing to give them a fair share of the pie. This will create a tsunami of industrial unrest in the offshore sector.
Unite will support these members every step of the way in their fight for better jobs, pay and conditions.
The prospective action includes electrical, production and mechanical technicians in addition to deck crew, scaffolders, crane operators, pipefitters, platers and riggers.
10:32 AM
Cambridge University's economic contribution 'four times that of Premier League'
The University of Cambridge makes a financial contribution to the UK almost four times that of the Premier League, a new report has suggested.
Analysis of its economic impact found the university adds nearly £30bn to the UK economy every year through a combination of research, entrepreneurial activities, tourism and enhanced value that graduates bring to employment.
The report was commissioned by Cambridge University.
It was carried out by London Economics, which describes itself as "one of Europe's leading specialist policy and economics consultancies".
Data from the 2020-2021 academic year was used to calculate the net economic impact on the UK economy as £29.8bn and concludes that the university supports more than 86,000 jobs across the country.
The report, carried out by London Economics, states: "For every £1 we spend, we create £11.70 of economic impact, and for every £1m of publicly funded research income we receive, we generate £12.65m in economic impact across the UK.
"The university's contribution to the UK economy is almost four times that of the Premier League."
10:10 AM
Gas prices sink amid banking crisis and end of winter
European gas prices have fallen below $40 for the first time since August 2021 as the banking crisis hurts commodity markets.
Prices would already have been impacted by storage levels remaining at about 56pc on the continent, which is far above the average for this time of year.
Germany, Austria, Belgium and some other EU nations topped up their supplies on Saturday, according to Gas Infrastructure Europe - although strikes in France saw it withdraw more than usual to support its energy network.
The rising supplies - which have sent prices down 6pc today - come as turmoil in financial markets has left investors jittery about commodities.
They are considered more risky than safe havens like Government bonds and currencies like the Japanese yen.
Ole Hansen, head of commodity strategy at Saxo Bank, said:
Most commodities are currently driven by fears of what may happen next given the upheaval in the banking sector.
Gas is - in addition to that fear - also trading lower as we are running out of winter to support demand.
09:58 AM
Avanti West Coast handed short-term extension
All the focus this morning has understandably been on the Credit Suisse takeover and the market reaction - but I'll now try to get you up to speed with some other news.
Train operator Avanti West Coast has been handed a short-term contract extension by the Department for Transport (DfT).
The FirstGroup-owned operator has struggled with reliability and punctuality during parts of the past year.
Its contract was due to expire at the end of March but has been extended until October 15.
Avanti West Coast runs trains on the West Coast Main Line between London Euston and Glasgow Central, with branches to Birmingham, North Wales, Liverpool, Manchester and Edinburgh.
It is a joint venture between FirstGroup (70pc) and Italian state operator Trenitalia (30pc). FirstGroup chief executive Graham Sutherland said:
We are working closely with Government and our partners across the industry to deliver a successful railway for our customers and communities.
Performance at Avanti is steadily improving and, since the introduction of the new timetable in mid-December, the number of services has increased by more than 40pc compared to last summer, with more seats and better frequencies.
Today's agreement allows our team to continue their focus on delivering their robust plans to continue enhancing services for our customers, including further progress on our train upgrade and refurbishment programme.
09:44 AM
Goldman Sachs 'to trade claims on wiped-out Credit Suisse bonds'
Goldman Sachs traders are reportedly preparing to take bids on claims against Credit Suisse's riskiest bonds.
Clients were told in a message late Sunday that the New York-based bank would soon start trading claims in the so-called additional tier 1 bonds, or AT1s, according to Bloomberg News.
The Swiss lender's additional tier 1 shares with a nominal value of around 16 billion Swiss francs ( $17bn, £14.6bn) will be written down completely after the Swiss government provided support for UBS' takeover of Credit Suisse.
Goldman Sachs declined to comment.
Goldman Sachs : "SUPER ACTIVE ON AT1s, down between 5 to 15pts"
The vultures are circling and litigations will start soon.— JohannesBorgen (@jeuasommenulle) March 20, 2023
09:34 AM
Yen rallies amid flight to safe haven assets
Japan's yen has strengthened as investors sought out safe assets after UBS' cut-price takeover of its beleaguered rival Credit Suisse failed to quell market nerves.
Under the deal, holders of $17bn worth of Credit Suisse's additional tier-1 (AT1) bonds will be wiped out.
That angered some of the holders of the debt who thought they would be better protected than shareholders and unnerved investors in other banks' AT1 bonds.
The yen - long seen as a safe currency to hold at times of stress - rallied as a drop in Asian bank stocks overnight spread to Europe.
The dollar slid to its lowest since February 10 at 130.55 yen, and was last down 1pc at 130.98. The pound is down 0.4pc against the yen at 159.97.
Takahiro Sekido, chief Japan strategist at MUFG, said:
The market's driving force is risk aversion.
I'm not so pessimistic, but still we have to wait and see how much we will see risk contagion from Europe.
09:24 AM
UBS shares plunge after Credit Suisse takeover
UBS's share price plunged as its deal to take over its troubled Swiss rival Credit Suisse for 3 billion Swiss francs (£2.7bn) failed to calm stock market nerves.
The buyout, in which Switzerland's biggest bank will take over the second largest, was vital to prevent economic turmoil from spreading throughout the country and beyond, the Swiss government said Sunday.
But investors remained on edge, with UBS shares falling as much as 12pc in early trading before clawing back some losses.
Shares of Credit Suisse, for their part, opened almost 64pc lower, at just 0.68 Swiss francs per share, well below the UBS takeover price in a deal aimed at preventing a wider international banking crisis.
After suffering heavy falls on the stock market last week, Credit Suisse's share price closed Friday at 1.86 Swiss francs, with the bank worth just over $8.7bn.
UBS said Credit Suisse shareholders would get 0.76 Swiss francs per share.
Credit Suisse's share price has tumbled from 12.78 Swiss francs in February 2021 due to a string of scandals and crises that it has been unable to shake off.
Like UBS, Credit Suisse was one of 30 worldwide Global Systemically Important Banks - deemed of such importance to the international banking system that they are colloquially called "too big to fail".But the markets saw the bank as a weak link in the chain.
UBS shareholders face a massive dilution of the UBS #earnings-per-share. The combination must compensate for that after the first couple of lousy years. https://t.co/dAlDvX4pgD
— jeroen blokland (@jsblokland) March 20, 2023
09:16 AM
'A deposit is a loan we make to the bank'
Some banking fundamentals here from Telegraph columnist Andrew Lilico:
If, instead of loaning money to the bank in the form of a fractional reserve deposit, you just want the bank to store your money, you should be using a different kind of deposit - a storage deposit that is 100% backed.
— Andrew Lilico (@andrew_lilico) March 20, 2023
09:09 AM
Pound rises amid speculation of pause in Fed rate increases
The pound has risen against the dollar amid speculation that the US Federal Reserve may pause its programme of interest rate increases to help ease the banking crisis.
The case for the Federal Reserve to forgo an interest-rate increase strengthened in the eyes of some central bank watchers following a coordinated global move to ease growing financial strains.
Ahead of the weekend, most economists had been forecasting that the Fed would raise its benchmark rate by a quarter percentage point on Wednesday, to a range of 4.75pc to 5pc, extending a yearlong campaign to stamp out inflation.
On Sunday afternoon, however, the Fed and five other central banks announced action to boost liquidity in US dollar swap arrangements by increasing the frequency of access to daily from weekly — echoing actions taken during other moments of crisis.
Several analysts said the risk-benefit calculations around a pause were becoming more favourable.
Julia Coronado, president of MacroPolicy Perspectives LLC and a former Fed economist, said: "The fact that you are engaged in global coordination with other central banking authorities to rescue institutions and keep liquidity flowing, it just suggests that a pause is probably a better risk/reward."
The pound has climbed 0.3pc against the dollar to more than $1.22 - its highest level since the start of February.
08:56 AM
Credit Suisse deal could mean 're-pricing of AT1 bonds in other banks'
Under the UBS takeover of Credit Suisse, $17bn of so-called additional-tier 1 (AT1) bonds have been written off.
Capital Economics' chief Europe economist Andrew Kenningham said this is one of several concerns about the deal. He said:
First, [writing off AT1 bonds] is controversial given that the common equity – which is typically considered junior to AT1 in the capital structure – was not entirely wiped out.
That decision could result in a re-pricing of AT1 and other bail-in bonds of other banks – indeed it appears that the prices of other banks' AT1 instruments have fallen in early trading this morning.
Second, there could be legal challenges to the agreement, prolonging the process and creating further uncertainty.
And third, further substantial losses in the legacy bank cannot be ruled out and this could affect confidence in the enlarged UBS and/or prompt demands for further state support.
So while the deal may yet prove to be a turning point in the current banking crisis, we will probably not know for certain for a while yet.
08:44 AM
Hong Kong stocks end day with big losses
Hong Kong stocks closed sharply lower as banks were hammered by worries over the sector.
The Hang Seng Index sank 2.7pc, or 517.88 points, to 19,000.71.
The Shanghai Composite Index lost 0.5pc, or 15.64 points, to 3,234.91, while the Shenzhen Composite Index on China's second exchange fell 0.3pc, or 6.54 points, to 2,053.65.
08:28 AM
Bond markets gain after Credit Suisse deal
Government bonds rallied after a deal to quash the looming crisis of confidence in Credit Suisse failed to assuage concerns that stress in the banking system could spread.
Shorter-maturity bonds led the surge as investors bet that central banks would be more cautious in the face of strains in the banking sector.
The US and German two-year yields dropped over 20 basis points, while the US 10-year yield slumped to the lowest since September.
In Germany, 24 basis points was knocked off its two-year yield, which has fallen to 2.108pc. Its 10-year gilts are down 17 basis points to 1.604pc.
In the UK, the yield on two-year bonds fell 15 basis points to 3.064pc while 10-year Government bonds fell 13 basis points to 3.146pc.
08:23 AM
French minister 'delighted' with Credit Suisse deal
French economy minister Bruno Le Maire welcomed a "good deal" for stricken bank Credit Suisse which is set to be acquired by fellow Swiss giant UBS.
Talking to the BFM TV channel, Mr Le Maire said:
I'm delighted with this deal. It's a good deal.
At the same time... it's a heavyweight in Europe, so we will remain extremely vigilant about the reaction of the markets.
08:20 AM
Banks drag down stock markets
Traders are seeing red on their screens almost across the board as markets open following the UBS takeover of Credit Suisse.
UBS has plunged 13pc while Credit Suisse shares have fallen 58pc although that is in line with the £2.7bn deal price.
The FTSE 100 has fallen 1.3pc after falling 1pc on Friday.
In the eurozone, Frankfurt's DAX index retreated 1pc to 14,617.00 points and the Paris CAC 40 lost 0.8pc to 6,868.51.
In London, HSBC and Standard Chartered were amongst the top decliners, falling 3pc and 4.8pc, respectively.
Energy majors Shell and BP lost 2.5pc and 2.2pc, respectively, while the broader oil and gas index dropped 1.7pc, tracking a decline of more than 2pc in oil prices.
The more domestically-focussed FTSE 250 midcap index also shed 1.7pc.
08:04 AM
FTSE banking stocks drop
Markets have tumbled in London following the takeover of Credit Suisse by UBS, which has left some of the Swiss lender's riskier bonds worthless.
The FTSE 100 has fallen 0.7pc after the open to 7,284.90 while the midcap FTSE 250 has dropped 1pc to 18,291.84.
Banking stocks across the two indexes have slumped 5.3pc.
07:59 AM
Gold prices rise amid banking turmoil
Gold has risen above $2,000 an ounce for the first time in more than a year after the banking crises in the US and Europe triggered a return to haven buying.
Bullion surged 6.5pc last week in its biggest advance since the early days of the pandemic in March 2020 amid growing fears over Credit Suisse and as several regional American lenders collapsed.
It gave up some of those gains early today in the wake of an announcement that UBS had agreed to buy the Swiss lender in an emergency, government-brokered deal, but then started rising again later in the session.
Spot gold rose 0.6pc to $2,000.37 an ounce in Singapore. The last time bullion traded above the psychologically important $2,000 mark was on March 10, 2022.
07:53 AM
Interest rate decisions in focus amid market turmoil
The Bank of England faces pressure over whether to push ahead with another increase in interest rates even as markets are roiled by the rescue of Credit Suisse.
The US Federal Reserve will set the tone on Wednesday when it announces its next move on interest rates. The Bank of England announces its decision on Thursday.
The European Central Bank decided to push ahead with a planned 50 basis point increase last week, taking its deposit rate to 3pc.
However, an ECB chief has said the bank must fight inflation until the job is done, while acknowledging the rising risk of pushing interest rates too high as the peak nears.
Governing Council member Martins Kazaks said price pressures remain too strong and warrant further action — assuming the market turmoil that saw off Silicon Valley Bank and rocked Credit Suisse does not worsen.
At the same time, after 350 basis points of hikes since July, officials must carefully weigh the implications of future moves, he said. Mr Kazaks added:
Inflation is still very high — rates, in my view, needed to go up.
And if the baseline scenario holds and market volatility calms down and does not derail the scenario, then with the current macro outlook and the outlook for inflation, more interest-rate increases will be necessary.
07:43 AM
FTSE 100 on track to open lower
The FTSE 100 is expected to open lower after struggling bank Credit Suisse was sold to Swiss rival UBS.
London's top index is on track to fall by around 1pc as it opens trading following a bruising session last week.
Markets in Asia were struggling earlier in the morning, with shares in Hong Kong falling by more than 3pc as the banking sector took a battering.
Michael Hewson, chief market analyst at CMC Markets, said:
With Credit Suisse shareholders and some bondholders taking a huge hit, banks in Asia have taken a hit on similar concerns about (some of their) bond-holding values.
While the weekend deal still presents the Swiss National Bank and Swiss Government with untold headaches, with the size of the newly merged bank set to dwarf the size of the Swiss economy.
The phrase too big to fail really does spring to mind here, and this morning's weakness in Asia markets serves to reinforce concerns about these types of writedowns and any spillover effects on the rest of the banking sector.
07:40 AM
Bond assets tumble in Asia after Credit Suisse writedown
Risky bank bonds tumbled in Asia, with some posting record declines after holders of Credit Suisse's contingent convertible securities suffered a historic 16.3 billion franc (£14.4bn) loss.
The retreat was most pronounced in bonds designed to be among the first to face writedowns if an institution gets into trouble.
Bank of East Asia's 5.825pc perpetual dollar note slumped 9.4 cents on the dollar to about 80 cents, according to data compiled by Bloomberg.
HSBC's $2bn additional tier 1 bond fell much as 10 cents to around 85 cents on the dollar Monday, according to credit traders.
That drop would be its biggest daily drop since it began trading earlier this month.
UBS's decision to buy rival Credit Suisse triggered a complete write down of the beleaguered lender’s convertible notes.
It was the biggest loss yet for Europe's $275bn AT1 market, which was created after the financial crisis to ensure losses would be borne by investors not taxpayers.
07:30 AM
Oil prices plunge as investors shift away from riskier assets
Oil prices have sunk to their lowest level in two years as escalating investor concerns about the crisis in global banks eroded appetite for riskier assets such as commodities.
Brent crude, the international benchmark, has slumped 3.1pc already today towards $70 a barrel, where prices have not been since March 2021.
US-produced West Texas Intermediate has plunged 3.2pc below $65 a barrel, its lowest level since December 2021.
The decline comes despite Swiss authorities orchestrating a rescue of Credit Suisse by UBS Group over the weekend.
In addition, the Federal Reserve and five other central banks announced coordinated action to boost liquidity in US dollar swaps.
07:22 AM
Credit Suisse woes 'don't concern' European banks, says French chief
France's central bank chief has sought to distance European and French banks from the problems at Credit Suisse and banking woes in the United States.
Francois Villeroy de Galhau, a member of the European Central Bank's governing council, told France Inter radio that Credit Suisse and the banking volatility in the US "don't concern French and European banks".
07:17 AM
Deutsche Bank has 'near zero' of worthless Credit Suisse bonds
Deutsche Bank has said its exposure to Credit Suisse's Additional Tier 1 bonds was "near zero".
Credit Suisse said on Sunday that 16 billion Swiss francs (£14bn) of the securities will be written down to zero on the orders of the Swiss regulator as part of its rescue merger with UBS.
07:10 AM
Markets alarmed as risky Credit Suisse bonds to become worthless
Markets have been alarmed by policymakers' decision to prioritise Credit Suisse's equity investors over holders of additional tier 1 bonds.
Credit Suisse's AT-1 notes - previously valued at about $17bn (£14bn) - will become worthless as a result of the use of public funds for the rescue, potentially sending the $275bn (£226bn) market for bank funding into a tailspin.
Creditors are frantically poring through the fine print for these AT-1 securities to understand if authorities in other countries could repeat what the Swiss government did on Sunday.
The Swiss National Bank is offering a 100bn-franc (£198bn) liquidity assistance to UBS while the government is granting a 9bn-franc guarantee for potential losses from assets UBS is taking over.
Shares in European lenders are expected to decline today, extending last week's rout, as sentiment remains fragile even after UBS agreed to buy Credit Suisse in a government-brokered deal.
Futures of the Euro Stoxx Banks Index were 3.8pc lower in Paris amid thin volumes.
The wider benchmark slumped 12pc last week, wiping out about 111 billion euros (£97bn) of market capitalisation and almost erasing gains made so far this year.
06:53 AM
Good morning
Shares in Shanghai, Tokyo and Hong Kong declined after Swiss authorities arranged the takeover of troubled Credit Suisse.
Swiss authorities on Sunday announced UBS would acquire its smaller rival as regulators try to ease fears about banks following the collapse of US lenders Silicon Valley Bank and Signature Bank.
5 things to start your day
1) Credit Suisse sold in cut-price deal to avert banking crisis | The 167-year-old lender, which was valued at more than £65bn at its peak, has been taken over by arch-rival UBS in a £2.6bn deal
2) Why does John Lewis want to scrap its partnership? | Future of Britain's largest employee-owned business at stake as bosses mull over radical changes
3) Heat pumps are ‘sticking plaster’ solution to green home energy | Britain's biggest radiator maker warns Net Zero push risks failure without funding for insulation
4) The London-educated executive fighting for TikTok’s life | Chinese-owned app faces an uphill struggle to survive as politicians lobby for a ban
5) No hope of UK rocket launch until 2024 after Virgin Orbit failure | Hopes of a UK space revolution dwindle as Virgin Orbit places most staff on leave
What happened overnight
Asian stock markets fell overnight after Swiss authorities arranged the takeover of troubled Credit Suisse amid fears of a global banking crisis ahead of a Federal Reserve meeting to decide on more possible interest rate hikes.
Hong Kong stocks fell 3pc during afternoon trading as HSBC and other lenders tumbled, with traders fretting over the financial sector despite the UBS buyout of troubled Credit Suisse.
The Hang Seng Index slipped 3pc, or 586.66 points, to 18,931.93.
Tokyo shares ended lower, weighed by the concerns about the global banking sector as well as a stronger yen.
The benchmark Nikkei 225 index fell 1.4pc, or 388.12 points, to 26,945.67, while the broader Topix index lost 1.5pc, or 30.12 points, to 1,929.30.
Credit Suisse's banking operations appeared to be running business as usual at its major offices in Asia.
Monetary authorities in Singapore and Hong Kong, where Credit Suisse hosts large regional offices, separately said the Swiss bank's business continued without interruption.
