Lending declined in many parts of the US over the past few weeks, after financial sector troubles unleashed by the rapid collapse of Silicon Valley Bank (SVB), the US Federal Reserve said on Wednesday.
“Lending volumes and loan demand generally declined across consumer and business loan types,” the Fed said in its regular report on economic conditions known as the Beige Book.
“Several Districts noted that banks tightened lending standards amid increased uncertainty and concerns about liquidity,” the Fed said.
Photo: REUTERS
The conditions in New York’s financial sector “deteriorated sharply coinciding with recent stress in the banking sector,” it said.
SVB’s collapse on March 10, after taking excessive interest-rate risk, led to a snowball effect in the financial markets as concerned investors looked for signs of weakness in the broader banking sector in the US and Europe.
Another US regional bank failed in the aftermath of SVB’s collapse, while Swiss banking giant Credit Suisse Group AG became the highest-profile casualty a few days later, when it was pushed by regulators to merge with UBS Group AG.
Regulators on both sides of the Atlantic took swift action to stem the outflow of bank deposits by concerned customers.
About a month later, the dramatic intervention by regulators appears to have paid off, with markets operating with far less volatility than they were in the days following SVB’s collapse, the VIX volatility index showed.
The Fed report also said that elevated employment growth in the past months appears to have moderated, with several Fed districts reporting slower growth.
However, wages have remained elevated.
Price levels rose moderately, although the Fed said that “the rate of price increases appeared to be slowing.”
Inflation remains stubbornly above the Fed’s long-term target of 2 percent, despite an aggressive campaign of monetary tightening that has brought interest rates up to a level not seen since the global financial crisis.
Overall economic activity was little changed in the past few weeks, the Fed said.
Taiwan’s technology protection rules prohibits Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) from producing 2-nanometer chips abroad, so the company must keep its most cutting-edge technology at home, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. Kuo made the remarks in response to concerns that TSMC might be forced to produce advanced 2-nanometer chips at its fabs in Arizona ahead of schedule after former US president Donald Trump was re-elected as the next US president on Tuesday. “Since Taiwan has related regulations to protect its own technologies, TSMC cannot produce 2-nanometer chips overseas currently,” Kuo said at a meeting of the legislature’s
TECH WAR CONTINUES: The suspension of TSMC AI chips and GPUs would be a heavy blow to China’s chip designers and would affect its competitive edge Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, is reportedly to halt supply of artificial intelligence (AI) chips and graphics processing units (GPUs) made on 7-nanometer or more advanced process technologies from next week in order to comply with US Department of Commerce rules. TSMC has sent e-mails to its Chinese AI customers, informing them about the suspension starting on Monday, Chinese online news outlet Ijiwei.com (愛集微) reported yesterday. The US Department of Commerce has not formally unveiled further semiconductor measures against China yet. “TSMC does not comment on market rumors. TSMC is a law-abiding company and we are
FLEXIBLE: Taiwan can develop its own ground station equipment, and has highly competitive manufacturers and suppliers with diversified production, the MOEA said The Ministry of Economic Affairs (MOEA) yesterday disputed reports that suppliers to US-based Space Exploration Technologies Corp (SpaceX) had been asked to move production out of Taiwan. Reuters had reported on Tuesday last week that Elon Musk-owned SpaceX had asked their manufacturers to produce outside of Taiwan given geopolitical risks and that at least one Taiwanese supplier had been pushed to relocate production to Vietnam. SpaceX’s requests place a renewed focus on the contentious relationship Musk has had with Taiwan, especially after he said last year that Taiwan is an “integral part” of China, sparking sharp criticism from Taiwanese authorities. The ministry said
US President Joe Biden’s administration is racing to complete CHIPS and Science Act agreements with companies such as Intel Corp and Samsung Electronics Co, aiming to shore up one of its signature initiatives before US president-elect Donald Trump enters the White House. The US Department of Commerce has allocated more than 90 percent of the US$39 billion in grants under the act, a landmark law enacted in 2022 designed to rebuild the domestic chip industry. However, the agency has only announced one binding agreement so far. The next two months would prove critical for more than 20 companies still in the process