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World Today: Summary of Today’s News

The collapse of Silicon Valley Bank (SVB) continues to make headlines globally, with governments and financial institutions taking measures to contain its impact on the financial markets. South Korean Finance Minister Chu Kyung-ho stated that the global impact of SVB’s collapse is expected to be limited, while the US monetary authority vows to protect depositors’ funds. Meanwhile, India’s Minister of Electronics and Information Technology will meet with startups this week to evaluate the impact of the bank’s collapse on Indian startups.

In other news, North Korea conducted “strategic underwater cruise missile launch exercises” off its east coast, according to its state-run Korean Central News Agency. The US Treasury Department has confirmed that it will not support SVB and Signature Bank after both banks were shut down to prevent risks in the banking system.

The CSI300 index of the Shanghai and Shenzhen stock markets fell 4% last week, and Hong Kong’s Hang Seng Index tumbled 6% after China announced its 2023 gross domestic product (GDP) growth target of 5% during the annual meeting of the National People’s Congress (NPC). The Bank of Korea has assured that the SVB’s bankruptcy is unlikely to spread as a systemic risk.

Goldman Sachs’ analysts predict that the Federal Reserve is unlikely to raise interest rates at its March 21-22 meeting due to uncertainties surrounding the bankruptcy of SVB, which could pressure the US banking system. Asian bank stocks have fallen as a result of the bankruptcy, with concerns that it may create risks in the financial system at large.

JPMorgan Chase & Co. and PNC Financial Group are reportedly in talks to acquire SVB Financial Group, the parent company of Silicon Valley Bank. However, the acquisition will not include SVB, which is now under US government control following its closure last weekend.

In other news, HSBC Bank announced that its UK-based bank, HSBC UK Bank, will acquire the British branch of SVB for £1 ($1.21). The acquisition does not include the assets and liabilities of SVB Financial Group. Lastly, the Monetary Authority of Singapore has assured that Singapore’s banking system is not exposed to significant risks from bankruptcies in the United States.

Experts warn that the US government’s intervention in SVB’s bankruptcy crisis by offering protection for deposits in the bank could end up supporting some unscrupulous investors. In China, parliament approved a law change that would allow the emergency law to be passed more quickly, potentially undermining public debate and criticism, according to Xinhua News Agency.

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