FirstFT: SVB collapse hits global markets

Good morning.

The fallout from the collapse of Silicon Valley Bank remains the big story today. The Federal Reserve has announced that it will lead a review of how the bank was supervised and regulated, as the US central bank comes under fire.

Meanwhile, about 500 miles south of California’s Silicon Valley, US president Joe Biden and his Australian and UK counterparts gathered in San Diego earlier today to announce a historic partnership as they work to counter China in the Indo-Pacific.

Here’s what else to keep tabs on today:

• Bangladesh-England cricket: Today’s Twenty20 International cricket match in Dhaka, Bangladesh will be the final match of the series.

• Net Zero Industry Act: Brussels unveils the proposal as part of its wider Green Deal Industrial Plan.

• US inflation: Figures are expected to show that consumer prices rose at an annual pace of 6 per cent in February, according to economists’ forecast compiled by Bloomberg.

Today’s top news

1. Investors are ripping up their forecasts for further rises in interest rates and dumping bank stocks around the world following the failure of Silicon Valley Bank. The two-year US Treasury yield, which moves with interest rate expectations, recorded its biggest one-day drop since 1987.

2. HSBC averted a crisis in Britain’s tech sector by rescuing Silicon Valley Bank’s UK arm, a fire sale sealed after all-night talks led by Prime Minister Rishi Sunak and the Bank of England. The deal, which will see HSBC pay a symbolic £1 for SVB UK, avoids the UK government having to step in to protect depositors.

3. The US, UK and Australia unveiled a decades-long project to supply Canberra with nuclear-powered submarines. Under the three-stage plan, Australia and Britain will co-build a new submarine based on a modified version of a next-generation boat the UK was already in the process of designing.

4. Xi Jinping has pledged to strengthen China’s security and build the military into a “great wall of steel” to defend the country’s interests as relations with the west reach the lowest point in decades. Read more from Xi’s speech yesterday at the close of the annual National People’s Congress.

5. Pfizer has offered to buy the drug developer SeaGen in a deal valued at $43bn. The acquisition will bulk up Pfizer’s cancer treatment portfolio as it faces declining sales linked to its Covid-19 treatment.

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News in-depth

Venture capital firms and tech start-ups appear to have averted crisis following SVB’s collapse with the Federal Reserve’s emergency measures to support depositors. But relief has made way for a round of bitter recriminations, as VCs contemplate a reckoning: by abandoning SVB, they had helped to create a gaping hole at the heart of Silicon Valley.

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Chart of the day

About 85 central banks are engaged in projects to create digital currencies, according to figures from the Bank for International Settlements. Yet governments’ enthusiasm is not matched by the citizens they represent, many of whom view central bank digital currencies as an encroachment into their private lives.

Take a break from the news

The colours were muted on the Oscars champagne carpet — but there were still plenty of standout looks at Hollywood’s biggest night.

Before you go, what was the last Beatles hit before the band broke up? Try your hand at 2-down in our crossword puzzle on the FT app.

Additional contributions by Gordon Smith and Tee Zhuo.