Jakarta wants to reduce its dependence on foreign payment systems, citing sanctions on Russia.
The Bank of Indonesia is preparing to phase out Visa and Mastercard while introducing its own domestic payment system, Antara news agency reported on Monday, citing the regulator.
Last week, Indonesian President Joko Widodo urged regional authorities to wean themselves away from foreign payment systems and start using cards issued by local banks. He argued that Indonesia needed to shield itself from geopolitical disruptions, citing the sanctions targeting Russia’s financial sector from the US, EU, and their allies over the conflict in Ukraine.
“Be very careful. We must remember the sanctions imposed by the US on Russia. Visa and Mastercard could be a problem,” he said.
Commenting on the initiative, the central bank’s spokesperson, Erwin Haryono, said that the regulator was in talks with local businesses “and the progress is about 90%,” adding that domestic cards will have many advantages, including lower fees. Also, according to him, “offshore settlements and dependence on foreign payment networks such as US Visa or Mastercard will no longer be necessary.”
Board member of the Indonesian Credit Cards Association (AKKI), Dodit Proboyakti, told RIA Novosti that Indonesia would apply the experience of Russia and its Mir payment system to promote the domestic financial network.
Indonesia’s interbank system, GPN, currently supports only local debit cards and requires some adjustments to properly serve credit cards and international transactions, according to AKKI executive director Steve Marta.
Moscow rolled out its own national card system, Mir, soon after the US first targeted the country with sanctions in 2014, and created the domestic National Payment Card System (NSPK) to smoothly take over all Visa and Mastercard transactions should the US-based companies pull the plug.
The former US president was controversially suspended over his connection to the Capitol riots in Washington DC.
Former US president Donald Trump returned to Facebook on Friday, writing “I’M BACK!” on his reinstated page. He was banned from the social network in 2021 following the January 6 Capitol riots in Washington.
Aside from the short announcement of his return, he also posted an old video of himself from when he won the presidential election of 2016, saying “Sorry to keep you waiting, complicated business.”
Meta, Facebook’s parent company, announced in January that it would reinstate the former president because “the public should be allowed to hear from politicians.” However, the official post clarified that Trump now faced “heightened penalties for repeat offenses” as a way to “deter” such behavior.
The former president was removed from Facebook and Instagram, both of which are owned by Meta, in 2021. Writing about the ban in 2022, the company’s president for global affairs, former UK deputy prime minister, Nick Clegg, says it was under “extreme and highly unusual circumstances” and the official reason was that Trump praised “people engaged in violence at the Capitol on January 6, 2021.”
He was similarly permanently suspended from Twitter for “incitement of violence.” This referred to Trump’s tweets about the Capitol riots where he called the protesters “great American patriots.” The former president was quite fond of this social network in particular, even before assuming office. In 2017, he even said that he would not have won the election without Twitter.
In response, Trump filed a lawsuit against Twitter, Google and Facebook for “censorship.” He argued that if the companies could ban him, the president of the United States at the time, then “they can do it to anyone.” However, the suit against Twitter was dismissed in May 2022.
The politician then created his own social network called Truth Social in October 2021, marketing it as a competitor to the “tyranny of big tech.” Trump wrote in the official press release: “We live in a world where the Taliban has a huge presence on Twitter, yet your favorite American President has been silenced.”
Tesla owner Elon Musk bought Twitter for $44 billion in October and said he would put the reinstatement of Trump’s account up to a popular vote. The result of the poll, which generated 15 million responses, showed 52% voting to bring the banned ex-president back. Trump’s account was once again visible in November, but he has not yet tweeted anything. He wrote that even though he “liked Elon,” he would be staying on Truth Social, calling it “special.”
Trump announced his 2024 presidential campaign in November, after the Republican Party secured a narrow majority in the House of Representatives in the midterm elections. The newly revived Facebook account will be “an important tool for the 2024 campaign to reach voters through advertising, grassroots mobilization and fundraising,” his campaign spokesman, Steven Cheung, told Fox News.
The Eternal Neocon Calls for Bombing Russian Infrastructure
John Bolton is a very principled man /s, and his actual strategy is to slowly make the war more acceptable in the minds of the public by pushing the Overton Window and creating new forms of acceptable speech.
Moscow spooked NATO from going all in for Ukraine – John Bolton
Attacks on any target, including Nord Stream, should not imperil foreign aid, the US arch-hawk argued.
John Bolton in Kiev, Ukraine in 2019
Russian intimidation has prevented NATO members from giving Ukraine the weapons it needs and allowing it attack any targets it wants – including key European infrastructure – US arch-hawk John Bolton has claimed. This must change, he has insisted, in an oped urging President Joe Biden to change his policies.
“[Russian President] Vladimir Putin has masterfully deterred NATO from responding robustly enough to end the conflict promptly and victoriously. Time to solve this problem is growing short,” Bolton wrote in an opinion piece published by the Wall Street Journal on Wednesday.
The former national security adviser to President Donald Trump blamed Biden for failing to aim for “ambiguous goals” and claimed his “fear of Russian escalation” had led to a military gridlock in Ukraine. The current president “barely tried” to prevent the Russian military operation, Bolton argued, before criticizing the reported limitations imposed by Washington in terms of which targets Kiev can attack with the weapons it gets from the West.
“NATO pressures Ukraine not to strike inside Russia, and to spare key assets like Nord Stream, whereas the Kremlin can strike anywhere within Ukraine,” he wrote.
Nord Stream comprises two undersea gas pipelines, which were built to deliver Russian natural gas directly to Germany. They were blown up in September.
Bolton mentioned claims in the Western press, which said US intelligence suspected that a “pro-Ukrainian group” not connected with any government had carried out the sophisticated operation. Even if Kiev ordered the attack, he said, it should not impact the level of support it gets.
According to Bolton, debates in NATO on whether to deliver longer-range ATACMS missiles or F-16 fighter jets to Kiev “reflect a disjointed strategy” and harm Ukraine’s war effort. He said it was clear to him that “fears of Russian escalation are unwarranted.”
Bolton is a lifelong advocate for using US hard power against other nations, including nuclear powers Russia and China. US political observers suggest that he may seek the Republican nomination for president in the 2024 election.
Fox News host Tucker Carlson included him on a list of GOP candidates to whom he sent a questionnaire on the Ukraine conflict to get them on record. One question was whether the US should support regime change in Russia. Bolton failed to respond, Carlson said during his show on Monday.
>Former Vice President Mike Pence made his most blistering comments yet about former President Donald Trump’s role in the January 6 attack on the US Capitol during remarks Saturday evening at the annual Gridiron Club Dinner in Washington, DC.
>Pence began his remarks at the dinner, which traditionally features politicians making jokes about notable Washington figures, with lighthearted comments about Trump, President Joe Biden, Vice President Kamala Harris and several Republicans expected to run for president in 2024, including Florida Gov. Ron DeSantis and former UN Ambassador Nikki Haley.
>He then took a serious tone, noting the attack on the Capitol was “one thing I haven’t joked about” and calling January 6 “a tragic day.”
>Pence rebuked Trump for his role in the January 6, 2021 attack, saying he was “wrong” for claiming Pence had the authority to overturn the results of the 2020 election in his role presiding over Congress that day, saying “history will hold Donald Trump accountable.”
>“President Trump was wrong. I had no right to overturn the election and his reckless words endangered my family and everyone at the Capitol that day, and I know that history will hold Donald Trump accountable,” Pence said.
Pence is a pussy. He should have selected the alternative electors like the constitution says.
What did you expect from Pence anyway?
Most of his generation were gifted the most prosperous country on earth only to destroy it and leave nothing for their children.
Mike Pence states at the Gridiron Dinner that Trump endangered his entire family and that History will judge Trump harshly. However Pence won't testify against Trump and is fighting his subpoena using bogus claims of executive privilege. He is a coward and a hypocrite. pic.twitter.com/epvFQlWq4p
California was never a slave state, but the San Francisco “Reparations Committee” is proposing to pay each longtime black resident $5 million and grant them total debt forgiveness for suffering decades of “systemic repression.”
San Francisco Council President Shamann Walton
“While neither San Francisco, nor California, formally adopted the institution of chattel slavery, the tenets of segregation, white supremacy and systematic repression and exclusion of Black people were codified through legal and extralegal actions, social codes, and judicial enforcement,” the proposed draft says.
“A lump sum payment would compensate the affected population for the decades of harms that they have experienced, and will redress the economic and opportunity losses that Black San Franciscans have endured, collectively, as the result of both intentional decisions and unintended harms perpetuated by City policy,” the draft says.
The committee is also proposing the debt forgiveness plan because “Black households are more likely to hold costlier, riskier debt, and are more likely to have outstanding student loan debt.”
The reparations committee is also planning to supplement lower-income blacks so they can afford housing.
“Racial disparities across all metrics have led to a significant racial wealth gap in the City of San Francisco,” the draft says. “By elevating income to match AMI, Black people can better afford housing and achieve a better quality of life.”
San Francisco Council President Shamann Walton says the millions of dollars in reparations, debt forgiveness and supplemental income is not enough.
The San Francisco Board of Supervisors met on Tuesday to review the committee’s plans to pay reparations to black residents.
“An estimated 50,000 Black people live in San Francisco, but it’s unclear who among them would be eligible for reparations. Under the committee’s draft reparations plan, a person must be at least 18 years old and identified as “Black/African American” in public documents for at least 10 years. Eligible people must also meet two of eight other criteria, such as living in San Francisco during a certain time period or descending from someone incarcerated for the police war on drugs.” Fox News reported.
The Board of Supervisors will vote to accept all or parts of the reparations committee’s recommendations.
Fox News reported:
The San Francisco Board of Supervisors is meeting Tuesday to review a proposal to dole out $5 million each to qualifying Black residents in reparations as a way to make amends for slavery.
At the board meeting, the city’s African American Reparations Advisory Committee will present the controversial idea, along with dozens of other recommendations from its draft reparations plan released in December.
The other recommendations range from offering grants to buy and maintain homes to exempting Black businesses from paying taxes. But the $5 million lump-sum payment has garnered the most attention — and controversy.
The Board of Supervisors can vote to adopt all, none, or some of the committee’s recommendations and even change them. Tuesday’s hearing was originally scheduled for last month but was postponed.
On Friday, bank regulators closed Silicon Valley Bank, based in Santa Clara, California. Its failure was the second largest in US history and the largest since the financial crisis of 2008.
Will other banks fail? On Sunday, regulators closed New York-based Signature Bank.
As they rushed to contain the fallout, government regulators at the Federal Reserve, Treasury and Federal Deposit Insurance Corporation announced in a joint statement on Sunday that depositors in Silicon Valley Bank would have access to all of their money starting Monday. They’d enact a similar program for Signature Bank.
They stressed that the bank losses would not be borne by taxpayers but by bank shareholders.
The surface story of the Silicon Valley Bank debacle is straightforward. During the pandemic, startups and technology companies enjoyed heady profits, some of which they deposited in the Silicon Valley Bank. Flush with their cash, the bank did what banks do: it kept a fraction on hand and invested the rest – putting a large share into long-dated Treasury bonds that promised good returns when interest rates were low.
But then, starting a little more than a year ago, the Fed raised interest rates from near zero to over 4.5%. As a result, two things happened. The value of the Silicon Valley Bank’s holdings of Treasury bonds plummeted because newer bonds paid more interest. And, as interest rates rose, the gusher of venture capital funding to startup and tech companies slowed, because venture funds had to pay more to borrow money. As a result, these startup and tech companies had to withdraw more of their money from the bank to meet their payrolls and other expenses.
But the bank didn’t have enough money on hand.
There’s a deeper story here. Remember the scene in It’s a Wonderful Life where the Jimmy Stewart character tries to quell a run on his bank by explaining to depositors that their money went to loans to others in the same community, and if they’d just be patient, they’d get their deposits back?
In the early 1930s, such bank runs were common. But the Roosevelt administration enacted laws and regulations requiring banks to have more money on hand, barring them from investing their depositors’ money for profit (in the Glass-Steagall Act), insuring deposits and tightly overseeing the banks. Banking became more secure, and boring.
That lasted until the 1980s when Wall Street financiers, seeing the potential for big money, pushed to dismantle these laws and regulations – culminating in 1999, when Bill Clinton and Congress repealed what remained of Glass-Steagall.
Then, of course, came the 2008 financial crisis, the worst collapse since 1929. It was the direct result of financial deregulation. Alan Greenspan, chairman of the Federal Reserve from 1987 to 2006, called it “a once-in-a-century credit tsunami”, but pressed by critics, Greenspan acknowledged that the crisis had forced him to rethink his free market ideology. “I have found a flaw,” he told a congressional committee. “I made a mistake … I was shocked.”
Once banking was deregulated, such a crash was inevitable. In the 1950s and 60s, when banking was boring, the financial sector accounted for just 10 to 15% of US corporate profits. But deregulation made finance exciting and exceedingly profitable. By the mid-1980s, the financial sector claimed 30% of corporate profits, and by 2001 – by which time Wall Street had become a gigantic betting parlor in which the house took a big share of the bets – it claimed a whopping 40%. That was more than four times the profits made in all US manufacturing.
When the bubble burst in 2008, the Bush administration moved to protect investment banks. Treasury Secretary Hank Paulson, former CEO of Goldman Sachs, and Timothy Geithner, president of the New York Fed, arranged a rescue of the investment firm Bear Stearns but allowed Lehman Brothers to go under. The stock market crashed. AIG, an insurance giant that had underwritten hundreds of billions’ worth of credit on the Street, faced collapse. So did Citigroup (to which Robert Rubin, Clinton’s former Treasury secretary, had moved after he successfully pushed for the Glass-Steagall repeal), which had bet heavily on risky mortgage-related assets.
Paulson asked Congress for $700bn to bail out the financial industry. He and Ben Bernanke, the Fed chair, insisted that a taxpayer bailout of Wall Street was the only way to avoid another Great Depression.
Obama endorsed the Wall Street bailout and appointed a team of Clinton-era economic advisors (led by Geithner, who became Obama’s Treasury secretary, and Lawrence Summers, who became director of the National Economic Council). These were the same people who, working under Rubin in the 1990s, had prepared the way for the financial crisis by deregulating Wall Street. Geithner, as chair of the New York Fed, had been responsible for overseeing Wall Street in the years leading up to the crisis.
In the end, the Obama administration rescued Wall Street, but at enormous cost to taxpayers and the economy. Estimates of the true cost of the bailout vary from half a trillion dollars to several trillion. The Federal Reserve also provided huge subsidies to the big banks in the form of virtually free loans. But homeowners, whose homes were suddenly worth less than the mortgages they owed on them, were left hanging in the wind. Many lost their homes.
Obama thereby shifted the costs of the bankers’ speculative binge onto ordinary Americans, deepening mistrust of a political system increasingly seen as rigged in favor of the rich and powerful.
A package of regulations put in place after the financial crisis (called Dodd-Frank) was not nearly as strict as the banking laws and regulations of the 1930s. It required that the banks submit to stress tests by the Fed and hold a certain minimum amount of cash on their balance sheets to protect against shocks, but it didn’t prohibit banks from gambling with their investors’ money. Why not? Because Wall Street lobbyists, backed with generous campaign donations from the Street, wouldn’t have it.
Which brings us to Friday’s failure of the Silicon Valley Bank. You didn’t have to be a rocket scientist to know that when the Fed raised interest rates as much and as fast as it did, the financial cushions behind some banks that had invested in Treasury bonds would shrink. Why didn’t regulators move in?
Because even the thin protections of Dodd-Frank were rolled back by Donald Trump, who in 2018 signed a bill that reduced scrutiny over many regional banks and removed the requirement that banks with assets under $250bn submit to stress testing and reduced the amount of cash they had to keep on their balance sheets to protect against shock. This freed smaller banks – such as Silicon Valley Bank (and the Signature Bank) – to invest more of their deposits and make more money for their shareholders (and their CEOs, whose pay is linked to profits).
Not surprisingly, Silicon Valley Bank’s own chief executive, Greg Becker, had been a strong supporter of Trump’s rollback. Becker had served on the San Francisco Fed’s board of directors.
Oh, and Becker sold $3.6m of Silicon Valley Bank stock under a trading plan less than two weeks before the firm disclosed extensive losses that led to its failure. There’s nothing illegal about corporate trading plans like the one Becker used, and the timing could merely have been coincidental. But it smells awful.
Will the failure of Silicon Valley Bank be as contagious as the failures of 2008, leading to other bank failures as depositors grow nervous about their safety? It’s impossible to know. The speed with which regulators moved over the weekend suggests they’re concerned. The Wall Street crisis of 2008 began with one or two bank failures, as did the financial crisis of 1929.
Four lessons from this debacle.
The Fed should hold off raising interest rates again until it has done a thorough appraisal of the consequences for smaller banks.
When the Fed rapidly raises interest rates, it must better monitor banks that have invested heavily in Treasury bonds.
The Trump regulatory rollbacks of financial regulations are dangerous. Small banks can get into huge trouble, setting off potential contagion to other banks. The Dodd-Frank rules must be fully reinstated.
More broadly, not even Dodd-Frank is adequate. To make banking boring again, instead of one of the most profitable parts of the economy, Glass-Steagall must be re-enacted, separating commercial from investment banking. There’s no good reason banks should be investing their depositors’ money for profit.
California-based First Republic Bank and Arizona-based Western Alliance Bancorporation both attempted to calm nerves around the collapse of Silicon Valley Bank after shares for both financial institutions plunged in the past week or so.
First Republic Bank told customers that their deposits were safe amid fears of spillover caused by SVB’s collapse late last week and as shares of First Republic Bank dropped 33 percent over the past five days.
In a regulatory filing with the U.S. Securities and Exchange Commission (SEC) on Friday, First Republic said its liquidity position remains strong amid falling share prices.
“This filing reiterates First Republic’s continued safety and stability and strong capital and liquidity positions,” the filing stated. “First Republic’s deposit base is strong and very-well diversified. Consumer deposits have an average account size of less than $200,000 and business deposits have an average account size of less than $500,000.”
The U.S. Federal Deposit Insurance Corporation (FDIC) insures deposits up to $250,000 per depositor per insured bank, for each account category. There were reports that about 85 percent of Silicon Valley Bank (SVB) accounts weren’t insured as the financial institution was often used by tech firms and startups.
“Within business deposits, no one sector represents more than 9 percent of total deposits, with the largest being diversified real estate. Technology-related deposits represent only 4 percent of total deposits,” First Republic also said. Its investment portfolio is less than 15 percent of total bank assets and only less than 2 percent of total bank assets are categorized as available for sale.
Silicon Valley Bank is the first FDIC-insured institution to fail this year, the Federal Deposit Insurance Corporation said, although analysts noted that its collapse represents the largest bank to fall since 2008 when Washington Mutual collapsed. The last FDIC-insured institution to close was Almena State Bank in Kansas on Oct. 23, 2020.
Meanwhile, Western Alliance, based in Phoenix, issued a news release on March 11 that “deposits remain strong,” saying that “total deposits of $61.5 billion, an increase of $7.8 billion since year end, led by our deposit verticals of Settlement Services, Home Owner Associations and Mortgage Warehouse. The company expects deposits to moderately decline from these levels by quarter end due to typical seasonal and monthly activity.”
Like First Republic, shares of Western Alliance have plunged about 35 percent. As of Friday, it held $2.5 billion cash on its balance sheet while held-to-maturity securities made up less than 2 percent of assets with an unrecognized loss of $192 million as of Feb. 28.
On Twitter, a highly visible post alleged that people were going on “a bank run” at a Brentwood, California, First Republic Bank location. That post’s video, shot from a moving vehicle, showed what appeared to be a long line of people standing outside the branch.
“I’ve never seen a bank run in Brentwood Los Angeles in over 40 years—this is at first republic bank branch. People standing in rain,” the user alleged on March 11. The Epoch Times has contacted First Republic Bank for comment on the claim and others.
A Daily Mail article, too, published photos of the long lines outside the Brentwood location. Before SVB’s collapse, depositors moved to withdraw their money en masse, triggering California state regulators to shutter the bank and allow the FDIC to take over.
Those concerns were also exacerbated by a Wall Street Journal article with a headline that blared, “First Republic Hit by Silicon Valley Bank Failure” and that “investors have grown wary of First Republic Bank for reasons similar to those that caused concern at SVB.”
The bank, which was founded in San Francisco in 1985, has some 80 branches in 11 states around the United States. The WSJ article noted that the bank’s funding relies largely on wealthy individuals who want to seek higher yields on their money.
With about $212 billion in total assets, First Republic Bank is the 14th largest in the United States. Western Alliance is smaller, with about $34 billion in total assets.
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