Janet Yellen admits banking system is stabilising
The U.S. Treasury Secretary admits more may need to be done, if runs on other regional banks occur
U.S. Treasury Secretary Janet Yellen said that the country’s banking system is stabilising, but further steps may be needed to protect depositors if runs on other regional banks threaten contagion.
“Our intervention was necessary to protect the broader U.S. banking system, and similar actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion.”
Her comments came at an American Bankers Association conference, more than a week after the Federal Deposit Insurance Corporation, or FDIC, closed the failing Silicon Valley Bank and Signature Bank.
Yellen said she believed the actions of the FDIC, the Federal Reserve and the Treasury had reduced the risk of further bank failures that would have imposed losses on the bank-funded Deposit Insurance Fund.
“Let me be clear: the government’s recent actions have demonstrated our resolute commitment to take the necessary steps to ensure that depositors savings and the banking system remain safe.”
Yellen did not provide details on what further actions may be warranted.
She said that the current situation was “very different” from the 2008-2009 global financial crisis, when subprime mortgage assets put many banks under stress.
“We do not see that situation in the banking system today. Our financial system is also significantly stronger than it was 15 years ago.”
Yellen did, however, add that in coming weeks, regulators will examine the failures of SVB and Signature Bank, and reexamine whether current regulatory and oversight protocols are appropriate for the risks that banks face today.
When will airfares begin to fall?
As the global aviation market rebounds, airlines are changing their service offerings
Over 46 million workers in the global aviation sector lost their jobs as global aviation came to a grinding halt at the onset of the pandemic.
However, Geoffrey Thomas from AirlineRatings.com said passengers have returned to airport terminals and boarded flights in droves.
“When travelled returned, many of us wondered what sort of low airfares will we have to be charged to entice people back onto airplanes.”
In February 2023, total traffic (measured in revenue passenger kilometres) rose 55.5 per cent when compared to February 2022.
Globally, traffic is at 84.9 per cent of February 2019 levels.
“It was a stampede, the likes of which we have never seen before,” Mr Thomas said.
The worst of inflation could be behind us
The unprecedented nature of the pandemic continue to shape international fiscal policy
As reserve banks and federal reserves continue to battle the impacts of Covid-19, inflation has become a dominate issue.
In some parts of the world, rising household costs have slowed consumer spending by more than expected.
It means the end of aggressive rate hikes could come to an end in a matter of months.
In Australia, recent data from the Australian Bureau of Statistics confirmed inflation has passed its peak and is beginning to moderate.
The numbers show annual inflation peaked in December 2022 but will still remain higher for longer than anticipated.
Matt Grudnoff is a Senior Economist at The Australia Institute, who said these are uncharted waters.
“I don’t think they should be fully blamed.
“The pandemic was an entirely different kind of recession, one that we have never seen before.
“The world went into recession because the world shut down for very good health reasons.
“But the economy rebounded extremely quickly, simply because there was no underlying problem with the economy,” he said.
“I think there is a great risk”: will AI steal our jobs?
Artificial Intelligence has become an increasingly powerful and pervasive force in our modern world.
Artificial intelligence is not a new concept. However, the growing advancements have the potential to revolutionise industries, improve efficiency, and enhance the quality of life.
Along with its promising advancements, artificial intelligence also brings certain risks and challenges that must be acknowledged and addressed.
It has become the focus of lawmakers, who are working towards greater regulation of the sector.
U.S. and European Union officials recently met in Sweden to weigh up the benefits and challenges of artificial intelligence, and other emerging technologies.
“The AI process is creeping up on us,” said Dr Keith Suter, who is a global futurist.
“You’ve got competition between companies.”
It’s almost like some of us can see this raft that’s heading towards the rapids and a disappearance towards the waterfall, and we’re giving a warning but it’s not being heeded because everybody’s in this race to get down to the river,” Dr Suter said.
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