According to recent studies, working four days a week instead of five can improve people’s overall wellness. The challenge, however, is whether businesses can maintain the same level of productivity in shorter periods of time. VOA’s Veronica Balderas Iglesias spoke with those who have experimented with the formula.
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Facebook-parent Meta Platforms said on Tuesday it would cut 10,000 jobs, just four months after it let go 11,000 employees, the first Big Tech company to announce a second round of mass layoffs. 

“We expect to reduce our team size by around 10,000 people and to close around 5,000 additional open roles that we haven’t yet hired,” Chief Executive Officer Mark Zuckerberg said in a message to staff.  

The layoffs are part of a wider restructuring at Meta that will see the company flatten its organizational structure, cancel lower priority projects and reduce its hiring rates as part of the move. The news sent Meta’s shares up 2% in premarket trading. 

The move underscores Zuckerberg’s push to turn 2023 into the “Year of Efficiency” with promised cost cuts of $5 billion in expenses to between $89 billion and $95 billion. 

A deteriorating economy has brought about a series of mass job cuts across corporate America: from Wall Street banks such as Goldman Sachs and Morgan Stanley to Big Tech firms including Amazon.com  and Microsoft.  

The tech industry has laid off more than 280,000 workers since the start of 2022, with about 40% of them coming this year, according to layoffs tracking site layoffs.fyi.  

Meta, which is pouring billions of dollars to build the futuristic metaverse, has struggled with a post-pandemic slump in advertising spending from companies facing high inflation and rising interest rates.  

Meta’s move in November to slash headcount by 13% marked the first mass layoffs in its 18-year history. Its headcount stood at 86,482 at 2022-end, up 20% from a year ago. 
…

U.S. consumer prices increased in February amid sticky rental housing costs, but economists are divided on whether rising inflation will be enough to push the Federal Reserve to hike interest rates again next week after the failure of two regional banks.

The Consumer Price Index (CPI) rose 0.4% last month after accelerating 0.5% in January, the Labor Department said on Tuesday. That lowered the year-on-year increase in the CPI to 6.0% in February, the smallest annual gain since September 2021. The CPI rose 6.4% in the 12 months through January.

The annual CPI peaked at 9.1% in June, which was the biggest increase since November 1981.

Excluding the volatile food and energy components, the CPI increased 0.5% after rising 0.4% in January. In the 12 months through February, the so-called core CPI gained 5.5% after advancing 5.6% in January.

Economists polled by Reuters had forecast both the CPI and core CPI climbing 0.4% on a monthly basis. Monthly inflation is rising at double the rate that economists say is needed to bring inflation back to the Fed’s 2% target.

The inflation report was published amid financial market turmoil triggered by the collapse of Silicon Valley Bank in California and Signature Bank in New York, which forced regulators to take emergency measures to shore up confidence in the banking system.

It was also released before the Fed’s policy meeting next Tuesday and Wednesday, and followed a report last Friday showing a still-tight labor market, but cooling wage inflation. Economists said Tuesday’s report remained important for policymakers despite the angst in financial markets.

Fed Chair Jerome Powell told lawmakers last week that the U.S. central bank would likely need to raise rates more than expected, leading financial markets to expect that a half-percentage-point rate increase was on the table next week.

But those expectations were dialed back to 25 basis points after the employment report.

While financial markets on Tuesday still expected a quarter-percentage-point hike, according to CME Group’s FedWatch tool, fear of contagion from the banking crisis prompted some economists, including those at Goldman Sachs, to expect the Fed next week to pause its fastest monetary policy tightening cycle since the 1980s.

The Fed has increased its benchmark overnight interest rate by 450 basis points since last March from the near-zero level to the current 4.50%-4.75% range.
…

Stock markets in Asia fell Tuesday, with shares of banks hit particularly hard, following a decline in U.S. markets amid the fallout from the collapse of two U.S. banks. 

Japan’s Nikkei 225 Index closed down 2.2% with shares of Softbank falling 4.1%, Mizuho Financial Group dropping 7.1% and Sumitomo Mitsui Financial Group sinking 9.8%.  Hong Kong’s Hang Seng Index closed down 2.4% Tuesday. 

U.S President Joe Biden Monday sought to reassure Americans that the U.S. banking system is secure and that taxpayers would not bail out investors at California-based Silicon Valley Bank and the New York-based Signature Bank.    

“Americans can have confidence the banking system is safe. Your deposits are safe,” Biden said in a five-minute statement delivered at the White House.     

He said customers’ deposits will be covered by funds banks routinely pay into a U.S. government-held account for such emergencies.      

Biden vowed, “We must get a full accounting of what happened” at the two banks.     

Despite the assurances, U.S. banks lost about $90 billion in stock market value on Monday as investors feared additional bank failures. The biggest losses came from midsize banks, of the size of Silicon Valley Bank.     

While shares of the country’s biggest banks — such as JP Morgan Chase, Citigroup and Bank of America — also fell Monday, the selloff was not as sharp. The huge banks have been strictly regulated since the 2008 financial crisis and have been repeatedly stress tested by regulators.    

Biden ignored reporters’ questions Monday about the cause of the U.S. bank failures, but financial experts say both banks were affected by a rise in interest rates, which negatively affected the market values of significant portions of their assets, such as bonds and mortgage-backed securities.       

Banks don’t lose money if they hold such notes until maturity. But if they must sell them to cover depositor withdrawals, as was the case in recent days, the losses can quickly mount.       

The Federal Deposit Insurance Corp. reported that industrywide, U.S. banks at the end of last year reported $620 billion in such paper losses caused by rising interest rates.     

The U.S. Federal Reserve, the country’s central bank, announced Monday that it would review its oversight of Silicon Valley Bank in the wake of the bank’s failure.    

“We need to have humility and conduct a careful and thorough review of how we supervised and regulated this firm, and what we should learn from this experience,” said Fed vice chair for supervision Michael Barr.      

The FDIC, which insures deposits up to $250,000 and supervises financial institutions, said Monday it transferred all Silicon Valley Bank deposits to a so-called “bridge bank.” The new bank is run by a board appointed by the agency until it can stabilize operations.          

The Bank of England also announced Monday the sale of Silicon Valley Bank’s United Kingdom subsidiary to HSBC to stabilize the bank, “ensuring the continuity of banking services, minimizing disruption to the U.K. technology sector and supporting confidence in the financial system.”      

The actions were prompted by the failure of Silicon Valley Bank, which U.S. regulators seized on Friday after concerns about the bank’s financial health led to a large number of depositors withdrawing their money at the same time.          

With about $200 billion in assets, Silicon Valley Bank’s failure was the second largest in U.S. history. The bank was heavily involved in financing for venture capital firms, especially in the tech sector.            

Signature Bank also had a large portion of clients in the tech sector, including cryptocurrency.  Its failure, with more than $100 billion in assets, was the third largest in U.S. history, behind Washington Mutual and Silicon Valley Bank.           

Some information for this story came from The Associated Press, Agence France-Presse and Reuters. 
…

U.S. President Joe Biden assured Americans on Monday that the U.S. banking system is secure and that taxpayers would not bail out investors at two banks that collapsed.

“Americans can have confidence the banking system is safe. Your deposits are safe,” Biden said in a five-minute statement delivered at the White House as businesses opened for the work week.

He said that all customers at the California-based Silicon Valley Bank and the New York-based Signature Bank would have immediate access to their deposits as federal financial officials take control of their operations.

“No losses will be borne by taxpayers,” Biden declared. “Managers of these banks will be fired. Investors in these banks will not be protected.”

He said customers’ deposits will be covered by funds banks routinely pay into a U.S. government-held account for such emergencies.

But he vowed, “We must get a full accounting of what happened” at the two banks.

He ignored reporters’ questions about the cause of the failures, but financial experts say both banks were affected by a rise in interest rates, which negatively affected the market values of significant portions of their assets, such as bonds and mortgage-backed securities.

Banks don’t lose money if they hold such notes until maturity. But if they must sell them to cover depositor withdrawals, as was the case in recent days, the losses can quickly mount.

The Federal Deposit Insurance Corp. reported that industrywide, U.S. banks at the end of last year reported $620 billion in such paper losses caused by rising interest rates.

In a statement late Sunday, Biden said, “I am firmly committed to holding those responsible for this mess fully accountable and to continuing our efforts to strengthen oversight and regulation of larger banks so that we are not in this position again.”

The statement followed a meeting of officials from top financial regulators, and said the Federal Reserve, the country’s central bank, was also giving other banks access to an emergency lending program to provide additional stability to the wider banking system.

The FDIC, which insures deposits up to $250,000 and supervises financial institutions, said Monday it transferred all Silicon Valley Bank deposits to a so-called “bridge bank.” The new bank is run by a board appointed by the agency until it can stabilize operations.

The Bank of England also announced Monday the sale of Silicon Valley Bank’s United Kingdom subsidiary to HSBC to stabilize the bank, “ensuring the continuity of banking services, minimizing disruption to the U.K. technology sector and supporting confidence in the financial system.”

A Bank of England statement said all depositor money was safe and that Silicon Valley Bank U.K. would continue operating as normal.

The actions were prompted by the failure of Silicon Valley Bank, which U.S. regulators seized on Friday after concerns about the bank’s financial health led to a large number of depositors withdrawing their money at the same time.

With about $200 billion in assets, Silicon Valley Bank’s failure was the second largest in U.S. history. The bank was heavily involved in financing for venture capital firms, especially in the tech sector.

Signature Bank also had a large portion of clients in the tech sector, including cryptocurrency. Its failure, with more than $100 billion in assets, was the third largest in U.S. history, behind Washington Mutual and Silicon Valley Bank.

Some information for this story came from The Associated Press, Agence France-Presse and Reuters.
…

U.S. Federal Reserve officials meet next week again chasing persistent inflation but now balancing that against the first acute tremors from the aggressive interest rate hikes the central bank approved over the past year.

The sudden failure of Silicon Valley Bank last week isn’t expected to prevent the Fed from continuing to raise interest rates at its March 21-22 meeting, with inflation still running far above the Fed’s 2% target and Fed chair Jerome Powell indicating monetary policy might need to become even more aggressive.

But it could add a dose of caution to the policy debate and undermine the sense, common among officials so far, that Fed policy had not caused anything to “break” in an economy where spending and job growth have seemed immune to the impact of higher interest rates. 

SVB’s failure, which the Fed came to a view as a potentially systemic shock if bank depositors faced losses, prompted the Fed to announce a new bank lending facility on Sunday in an effort to maintain confidence in the system – effectively putting the Fed back in the business of emergency lending even as it tries to tighten credit overall with higher interest rates.

Given the stakes that bit of dissonance seemed unavoidable, and may be accompanied by a slightly softer approach to monetary policy if risks are seen to be intensifying.

“The threat of a systemic disruption in the banking system is small, but the risk of stoking financial instability may well encourage the Fed to opt for a smaller rate increase at the upcoming meeting,” Oxford Economics economist Bob Schwartz wrote on Friday after SVB was closed by regulators and as officials began examining how to respond to the largest bank failure since the 2007 to 2009 financial crisis.

The upcoming Fed session was already providing a reality check of sorts, as policymakers tried to understand why the rapid rate hikes of the last year have not had more impact on the pace of price increases.

The inflation rate in January actually rose, while an Atlanta Fed real-time projection as of March 8 showed gross domestic product expanding at a 2.6% annual rate, well above the economy’s roughly 2% underlying potential.

Officials were poised to push the expected path of interest rates higher yet again as a result, the third time in their two-year battle against inflation that U.S. policymakers will have shifted on the fly after price increases proved to be faster, broader and more persistent than seen in their forecasts.

A February jobs report released Friday showed the unemployment rate rising to 3.6%. More importantly for the Fed, monthly wage growth slowed even as the economy continued to add jobs, an outcome that leaves open whether the Fed will approve a quarter or a half point rate increase at its next meeting. By late Sunday after the day’s emergency actions, the probability of a half-point hike had diminished to below one-in-five. 

Higher end point?

New inflation data to be released Tuesday and retail sales data on Wednesday both have the potential to push policymakers in either direction at the two-day meeting, which concludes March 22 with a new Federal Open Market Committee statement and projections issued at 2 p.m. EDT (1800 GMT), and a press conference by Powell at 2:30 p.m.

While investors at this point see lower odds of a return to larger rate hikes, there is still the question of just how much higher the Fed will go overall. Powell in his remarks to Congress last week signaled the new “dot plot” of projections for the rate path beyond March would likely be higher than previously expected in order to slow inflation to the central bank’s 2% target from levels more than double that.

As of December the high point for the target federal funds rate was expected by most officials to be 5.1%. In their final public comments before the beginning of a pre-meeting blackout period, Fed officials other than Powell also said they were primed for a more aggressive response if upcoming data show them losing more ground on inflation.

“The ultimate level of interest rates is likely to be higher than previously anticipated,” Powell said in congressional testimony that reset expectations for where the Fed was heading, and pushing yields on U.S. Treasury bonds higher and prompting a sell-off in equity markets.

At a Feb. 1 press conference, in contrast, his focus was on a “disinflationary process” he saw taking root.

Developments since then have raised some doubt in investors minds if Fed officials will follow through with that, however, and much of the immediate heat on bond yields and rate expectations eased after Friday’s employment data, with the weekend’s developments in the banking sector to address the Silicon Valley Bank collapse also factoring into the reversal. 

Still nimble?

Government reports released after Powell’s last press conference showed the central bank’s preferred measure of inflation had risen slightly to a 5.4% annual rate.

Revisions to prior months also erased some of the progress policymakers had relied on when they decided to step down to quarter point rate hikes at their last session. A New York Fed study last week suggested moreover that current inflation was being driven more by persistent factors and less by cyclical or sectoral influences that might be quicker to dissipate.

It is not the first time the Fed has been caught out by after-the-fact data updates. In the fall of 2021 the first release of monthly jobs reports seemed to show the job market weakening, taking some of the urgency out of discussions about when to start tightening monetary policy. By the end of the year revisions showed hundreds of thousands more jobs had been added than originally estimated.

“If you are trying to be nimble, this is the risk. And Powell is trying to be nimble,” said former Fed economist John Roberts. 
…

U.S. President Joe Biden is due to speak Monday about the banking system after the government acted to try to contain a potential crisis from the failure of two major banks. 

“The American people and American businesses can have confidence that their bank deposits will be there when they need them,” Biden said in a statement late Sunday. “I am firmly committed to holding those responsible for this mess fully accountable and to continuing our efforts to strengthen oversight and regulation of larger banks so that we are not in this position again.” 

The U.S. Treasury Department said in a statement Sunday that depositors at the California-based Silicon Valley Bank and the New York-based Signature Bank will have access to all of their money on Monday. 

The regulators also said no losses associated with the resolution of Silicon Valley Bank and Signature Bank will be borne by the taxpayer. 

The statement followed a meeting of officials from top financial regulators, and said the Federal Reserve was also giving other banks access to an emergency lending program to provide additional stability to the wider banking system. 

The actions were prompted by the failure of Silicon Valley Bank, which regulators seized on Friday after concerns about the bank’s financial health led to a large number of depositors withdrawing their money at the same time. 

With about $200 billion in assets, Silicon Valley Bank’s failure was the second-largest in U.S. history.  The bank was heavily involved in financing for venture capital firms, especially in the tech sector. 

Signature Bank also had a large portion of clients in the tech sector, including cryptocurrency. Its failure, with more than $100 billion in assets, was the third-largest in the country’s history. 

Both banks were affected by a rise in interest rates, which negatively affected the market values of significant portions of their assets such as bonds and mortgage-backed securities. 

Some information for this story came from The Associated Press, Agence France-Presse and Reuters. 
…

India’s state minister for technology said on Sunday he will meet startups this week to assess the impact on them of Silicon Valley Bank’s collapse, as concerns rise about the fallout for the Indian startup sector. 

California banking regulators shut down Silicon Valley Bank (SVB) on Friday after a run on the lender, which had $209 billion in assets at the end of 2022, with depositors pulling out as much as $42 billion on a single day, rendering it insolvent. 

“Startups are an important part of the new India economy. I will meet with Indian Startups this week to understand impact on them and how the government can help during the crisis,” Rajeev Chandrasekhar, the state minister for IT, said on Twitter. 

India has one of the world’s biggest startup markets, with many clocking multibillion-dollar valuations in recent years and getting the backing of foreign investors, who have made bold bets on digital and other tech businesses. 

SVB’s failure, the biggest in the U.S. since the 2008 financial crisis, has roiled global markets, hit banking stocks and is now unsettling Indian entrepreneurs. 

Two partners at an Indian venture capital fund and one lender to Indian startups told Reuters that they are running checks with portfolio companies on any SVB exposure and if so, whether it is a significant part of their total bank balance. 

Consumer internet startups, which have drawn the bulk of funding in India in recent years, are less affected because they either do not have an SVB account or have minimal exposure to it, the three people said. 

“Spoke to some founders and it is very bad,” Ashish Dave, CEO of Mirae Asset Venture Investments (India), wrote in a tweet. 

“Especially for Indian founders … who setup their U.S. companies and raised their initial round, SVB is default bank. Uncertainty is killing them. Growth ones are relatively safer as they diversified. Last thing founders needed.” 

Software firm Freshworks said it has minimal exposure to the SVB situation relative to the company’s overall balance sheet. 

“As we grew, we brought on larger, diversified banks such as Morgan Stanley, JP Morgan and UBS. The vast majority of our cash and marketable securities today is not held at SVB,” Freshworks said in a blog post, adding that the company does not foresee any disruption to employees or customers. 

Freshworks said it is working with customers and vendors who were using its SVB account to migrate to alternate bank accounts. 

India’s Nazara Technologies Ltd., a mobile gaming company, said in a stock exchange filing that two of its subsidiaries, Kiddopia Inc. and Mediawrkz Inc., hold cash balances totaling $7.75 million or 640 million rupees with SVB. 
…

China reappointed Yi Gang as head of the central bank Sunday to reassure entrepreneurs and financial markets by showing continuity at the top while other economic officials change during a period of uncertainty in the world’s second-largest economy.

Yi, whose official title is governor of the People’s Bank of China, plays no role in making monetary policy, unlike his counterparts in other major economies. His official duties lie in “implementing monetary policy,” or carrying out decisions made by a policymaking body whose membership is a secret.

But the central bank governor acts as spokesperson for monetary policy, is the most prominent Chinese figure in global finance and oversees reassuring bankers and investors at a time when China’s economy is emerging from drastically slower growth.

At the March 5 opening of the annual session of China’s rubber-stamp parliament, the National People’s Congress, China announced plans for a consumer-led revival of the struggling economy, setting this year’s growth target at “around 5%.”

Last year’s growth fell to 3%, the second-weakest level since at least the 1970s, putting president and head of the ruling Communist Party Xi Jinping under exceptional pressure to revitalize the economy.

A longtime veteran of monetary policy departments, Yi was first appointed governor of the People’s Bank of China in March 2018, taking over from the highly regarded Zhou Xiaochuan.

Before becoming governor, Yi spent 20 years at the central bank after getting his Ph.D. from the University of Illinois and working as a professor of economics at Indiana University from 1986 to 1994.

He is also a co-founder and professor at Peking University’s China Center for Economic Research.

The party made a similar decision to opt for continuity in 2013, when then-PBOC governor Zhou, who already had been in the job for a decade, stayed on as governor while all other economic regulators changed.

Yi’s reappointment came on the congress’s penultimate day, which also saw Xi loyalists appointed as finance minister and head of the Cabinet planning agency to carry out a program to tighten control over entrepreneurs, reduce debt risks and promote the state-led technology development. Incumbent Wang Wentao was reappointed minister of commerce.

The congress also named four vice premiers, individuals who may be in line for higher office. They include sixth-ranking member of the party’s all-powerful Politburo Standing Committee, Ding Xuexiang, as vice premier overseeing administrative matters. Veteran bureaucrats He Lifeng, Zhang Guoqing and Liu Guozhong were also named to the post. Liu and Zhang were incumbents.

Foreign Minister Qin Gang was also appointed to the position of state councilor, a position also held by Wang Yi, his predecessor and current superior as director of the party’s Office of the Central Foreign Affairs Commission.

Defense Minister Li Shangfu, an aerospace engineer by training, was also named one of the five state councilors, along with Minister of Public Security Wang Xiaohong and Secretary General of China’s Cabinet, known as the State Council, Wu Zhenglong. Shen Yiqin was the only woman named to the position and is China’s highest-ranking female politician.

No women sit on the 24-member Politburo or its standing Committee, and the party’s more-than-200-member Central Committee is 95% male.

A priority for finance officials will be to manage corporate and household debt that Beijing worries has risen to dangerous levels. Tighter debt controls triggered a slump in China’s vast real estate industry in 2021, adding to the COVID-19 pandemic’s downward pressure on the economy.

At the same time, the ruling party is trying to shift money into technology development and other strategic plans. That has prompted warnings that too much political control over emerging industries could waste money and hamper growth.

Xi has favored promoting officials who sometimes lack the experience of their predecessors and exposure to global industry and finance markets. That reflects Xi’s effort to purge the Chinese system of Western influence and promote homegrown strategies.
…

Treasury Secretary Janet Yellen said Sunday that the federal government would not bail out Silicon Valley Bank, but is working to help depositors who are concerned about their money.

The Federal Deposit Insurance Corporation insures deposits up to $250,000, but many of the companies and wealthy people who used the bank — known for its relationships with technology startups and venture capital — had more than that amount in their account. There are fears that some workers across the country won’t receive their paychecks.

Yellen, in an interview with CBS’ “Face the Nation,” provided few details on the government’s next steps. But she emphasized that the situation was much different from the financial crisis almost 15 years ago, which led to bank bailouts to protect the industry.

“We’re not going to do that again,” she said. “But we are concerned about depositors, and we’re focused on trying to meet their needs.”

With Wall Street rattled, Yellen tried to reassure Americans that there will be no domino effect after the collapse of Silicon Valley Bank.

“The American banking system is really safe and well capitalized,” she said. “It’s resilient.”

Silicon Valley Bank is the nation’s 16th-largest bank. It was the second biggest bank failure in U.S. history after the collapse of Washington Mutual in 2008. The bank served mostly technology workers and venture capital-backed companies, including some of the industry’s best-known brands.

Silicon Valley Bank began its slide into insolvency when its customers, largely technology companies that needed cash as they struggled to get financing, started withdrawing their deposits. The bank had to sell bonds at a loss to cover the withdrawals, leading to the largest failure of a U.S. financial institution since the height of the financial crisis.

Yellen described rising interest rates, which have been increased by the Federal Reserve to combat inflation, as the core problem for Silicon Valley Bank. Many of its assets, such as bonds or mortgage-backed securities, lost market value as rates climbed.

“The problems with the tech sector aren’t at the heart of the problems at this bank,” she said.

Yellen said she expected regulators to consider “a wide range of available options,” including the acquisition of Silicon Valley Bank by another institution. So far, however, no buyer has stepped forward.

Tom Quaadman, executive vice president of the U.S. Chamber of Commerce’s Center for Capital Markets Competitiveness, said in a statement, “We urge the administration to facilitate a quick acquisition, guaranteeing all bank depositors have access to their cash.”

Regulators seized the bank’s assets on Friday. Deposits that are insured by the federal government are supposed to be available by Monday morning.

“I’ve been working all weekend with our banking regulators to design appropriate policies to address this situation,” Yellen said. “I can’t really provide further details at this time.”

House Speaker Kevin McCarthy, R-Calif., told Fox News Channel’s “Sunday Morning Futures” that he hoped the administration would announce the next steps as soon as Sunday.

“They do have the tools to handle the current situation, they do know the seriousness of this and they are working to try to come forward with some announcement before the markets open,” he said.

McCarthy also expressed hope that Silicon Valley Bank would be purchased.

“I think that would be the best outcome to move forward and cool the markets and let people understand that we can move forward in the right manner,” he said.

Sen. Mark Warner, D-Va., said in an interview with ABC News’ “This Week” that he was concerned that the bank’s collapse could prompt nervous people to transfer money from other regional banks to larger institutions.

“We don’t want further consolidation,” he said.

Warner suggested there would be a “moral hazard” in reimbursing depositors in excess of the $250,000 limit and said an acquisition would be the best next step.

“I’m more optimistic this morning than I was yesterday afternoon at this time,” he said. “But, again, we will see how this plays out during the rest of the day.”

He added: “What we’ve got to focus on right now is how do we make sure there’s not contagion.”

President Joe Biden and Gov. Gavin Newsom, D-Calif., spoke about “efforts to address the situation” on Saturday, although the White House did not provide additional details on next steps.

Newsom said the goal was to “stabilize the situation as quickly as possible, to protect jobs, people’s livelihoods, and the entire innovation ecosystem that has served as a tent pole for our economy.”
…

It was called Silicon Valley Bank, but its collapse is causing shockwaves around the world.

From winemakers in California to startups across the Atlantic Ocean, companies are scrambling to figure out how to manage their finances after their bank suddenly shut down Friday. The meltdown means distress not only for businesses but also for their workers whose paychecks could get tied up in the chaos.

California Governor Gavin Newsom said Saturday that he’s talking with the White House to help “stabilize the situation as quickly as possible, to protect jobs, people’s livelihoods, and the entire innovation ecosystem that has served as a tent pole for our economy.”

U.S. customers with less than $250,000 in the bank can count on insurance provided by the Federal Deposit Insurance Corp. Regulators are trying to find a buyer for the bank in hopes customers with more than that can be made whole.

That includes customers such as Circle, a big player in the cryptocurrency industry. It said it has about $3.3 billion of the roughly $40 billion in reserves for its USDC coin at SVB. That caused USD Coin’s value, which tries to stay firmly at $1, to briefly plunge below 87 cents Saturday. It later rose back above 97 cents, according to CoinDesk.

Across the Atlantic, startup companies woke up Saturday to find SVB’s U.K. business will stop making payments or accepting deposits. The Bank of England said late Friday that it will put Silicon Valley Bank U.K. in its insolvency procedure, which will pay out eligible depositors up to 170,000 British pounds ($204,544) for joint accounts “as quickly as possible.”

“We know that there are a large number of startups and investors in the ecosystem who have significant exposure to SVB UK and will be very concerned,” Dom Hallas, executive director of Coadec, which represents British startups, said on Twitter. He cited “concern and panic.”

The Bank of England said SVB UK’s assets would be sold to pay creditors.

It’s not just startups feeling the pain. The bank’s collapse is having an effect on another important California industry: fine wines. It’s been an influential lender to vineyards since the 1990s.

“This is a huge disappointment,” said winemaker Jasmine Hirsch, the general manager of Hirsch Vineyards in California’s Sonoma County.

Hirsch said she expects her business will be fine. But she’s worried about the broader effects for smaller vintners looking for lines of credit to plant new vines.

“They really understand the wine business,” Hirsch said. “The disappearance of this bank, as one of the most important lenders, is absolutely going to have an effect on the wine industry, especially in an environment where interest rates have gone up.”

In Seattle, Shelf Engine CEO Stefan Kalb found himself immersed in emergency meetings devoted to figuring out how to meet payroll instead of focusing on his startup company’s business of helping grocers manage their food orders.

“It’s been a brutal day. We literally have every single penny in Silicon Valley Bank,” Kalb said Friday, pegging the deposit amount that’s now tied up at millions of dollars.

He is filing a claim for the $250,000 limit, but that won’t be enough to keep paying Shelf Engine’s 40 employees for long. That could force him into a decision about whether to begin furloughing employees until the mess is cleaned up.

“I’m just hoping the bank gets sold during the weekend,” Kalb said.

Tara Fung, co-founder and CEO of tech startup Co:Create that helps launch digital loyalty and rewards programs, said her firm uses multiple banks besides Silicon Valley Bank so was able switch over its payroll and vendor payments to another bank Friday.

Fung said her firm chose the bank as a partner because it is the “gold standard for tech firms and banking partnerships,” and she was upset that some people seemed to be gloating about its failure and unfairly tying it to doubts about cryptocurrency ventures.

San Francisco-based employee performance management company Confirm.com was among the Silicon Valley Bank depositors that rushed to pull their money out before regulators seized the bank.

Co-founder David Murray credits an email from one of Confirm’s venture capital investors, which urged the company to withdraw its funds “immediately,” citing signs of a run on the bank. Such actions accelerated the flight of cash, which led to the bank’s collapse.

“I think a lot of founders were sharing the logic that, you know, there’s no downside to pulling up the money to be safe,” Murray said. “And so, we all did that, hence the bank run.”

The U.S. government needs to act more quickly to stanch further damage, said Martín Varsavsky, an Argentinian entrepreneur who has investments across the tech industry and Silicon Valley.

One of his companies, Overture Life, which employs about 50 people, had some $1.5 million in deposits in the financially embattled bank but can rely on other holdings elsewhere to meet payroll.

But other companies have high percentages of their cash in Silicon Valley Bank, and they need access to more than the amount protected by the FDIC.

“If the government allows people to take at least half of the money they have in Silicon Valley Bank next week, I think everything will be fine,” Varsavsky said Saturday. “But if they stick to the $250,000, it will be an absolute disaster in which so many companies won’t be able to meet payroll.”
…