u. s. president joe biden has told americans that banking system is safe in a statement just before you as markets opened. he was trying to be to calm that fears of a financial crisis after the lapse of both signature bank and silicon valley back to back videos. the 2nd bed with u. s. history and business news is up after a short break with more on the bad faint is that a brought to the financial markets? the colleagues even being neat, will get the latest from small at d, w dot com. and to me, a lot of booking for myself on the team with someone else who t v highlights selected for you. you every week in your a box subscribe. now. when you become a criminal m pre klein, ai,

already news with hackers, paralyzed me to your societies. computers that i showed you and governments that go crazy for your data. we explain how these technologies work, how they can work for, and that's how they can also go terribly. watch it now on youtube. ah, president biden's is the american banking system is safe as regulars regulators raised to contain the fall out of the 1st bank failures in the country in 15 years in part by making all depositors hold. can washington ward off other failures will have the latest. also, on our show,

germany's economy minister visits brazil and calls for a green bridge of sustainable trade between europe and south america. i'm from beardsley in berlin. welcome to our show. markets remain on edge after the collapse of 2 u. s. lenders triggered fears that other banks might follow. a government are rushing to reassure citizens that their money is safe. after the u. s. thought biggest bang claps since the global financial crisis. silicon valley banks demise was closely followed by that of new york based signature bank. the u. s. insists a repeat of 2008 is not in the cards. president joe biden thought to assure depositors saying they had nothing to worry about today. thanks to the quick action my administration. over the past few days, miracle can have confidence that the banking system is safe. your deposit will be there when you need them. small businesses across the country, the deposit account at these banks can breed easier knowing they'll be able to pay their workers and pay their bills or not ian's court. on wall street. yes,

we heard the words of biden, there were investors reassured, even it was definitely no coincidence that biden gave those remarks before the market opened to the new weaker their remarks definitely didn't hurt, but i would say it was more the action that we've 1st seen from the if the i see from the federal reserve, partly also from the government to a guarantee, all did deposit specially also the m uninsured one. so that helped and everybody had tried to talk down the crisis to prevent a bank run at the broader market that worked. if i look at some of financial and stocks that didn't really do the trick, i'm, if you look at 1st republic, for example, a regional bank came out in san francisco that stock dropped 60 percent on monday, a loan or a western allianz alliance, and other bank are losing

a good 50 percent in value? yes. why is it that these regional banks we keep hearing regional banks? why are they being more punished by investors than others? well, partly it depends on who their clientele is. if you look at the startup community, for example, we've seen over the past couple of months said they haven't increased the need for cash. so that when they go to their bank, them and, and to ask for their money back and so to speak. so that those 4 things, some of those banks to sell assets for a loss and that could actually feel the lead to a bank run fcc. and with silicon valley bank, if you look at some of the big bang, for example, i mean j. p. morgan is such a big player so that what is happening is not so threatening as to see in the smaller player. so we definitely have to wait and see if the, what the federal reserve is doing that the,

the trick. and there is one positive thing out of the financial crisis of 2008. because we learned a lesson to how to deal with bank runs. that maybe that is helping this time around that this banking crisis is not turning out into a big financial crisis or a young quarter falling all the turmoil in new york's masri thanks very much robbing fuel those fears were midsize lenders is the concern that like silicon valley bank. others may be sitting on undervalued assets, due to recent interest rate hikes. now, when interest waits, rates were low, banks deposited funds into long term bonds. seemed like the smart thing to do at the time, but interest rates have climb dramatically over the past year. and those bonds are now significantly undervalued. well, that's not necessarily a problem if the bank and sit the problem out and wait until those bonds are to be repaid. but if the bank is forced to sell bonds early, as in the case of silicon valley bank, it's gonna take a loss,

accompanies with deposits and week in week banks could get nervous or begin withdrawing money to be sure that they'll have enough to cover costs. and that actually makes the problem worse. the banks need money to cover these withdrawals, so they keep selling bonds and their losses in turn mount spooking, even more depositors. right. ruder bachman is professor of economics at the university of notre dame in the state of indiana in the u. s. and he joins me for more. a professor bock when you're watching this happen like the rest of us. how concerned should we be about further failures? can you give us any sort of idea? well, that would be speculation that this could perhaps fail a few more of these smaller and regional banks. but i would say with the action today with the decisive action of the day of the i, c r, which you know, it's not very palatable because again, we have to bail our banks. our deposit is where it's questionable that we would

like to do that. but you know, the regulation is what it is and it could have been different, but it is what it is. and now to prevent these are these cascade effects is contagion effects. we did that, they needed to do what they had done. and i think i'm reasonably optimistic, precisely because of what you said, because at the big banks don't seem to be affected, that this will be more or less content that does not mean that, you know, the occasional other regional bank might fail. as you said, this is not very politically palatable solution. i biden emphasize that management of these banks to be fired, but unsure depositors will be made whole. and this was a medium sized bank we're told, or regional bank. do we have to redefine what is system system system relevant? i can barely get that word out because we were told that these banks shouldn't be as relevant to threaten the system as, as those larger banks. now we seem to have

a new idea of this. well, i mean, in the sense, as you said, the mechanism is if, if the, if a lot of these banks basically are hit by the same problem afflicted by the same problem, maybe they invest that they didn't quite know what to do with their assets in the low interest rate era, they all went into this longer term government bonds. and so in some sense then they all kind of have afflicted by this, a similar disease, a quotation marks and you know, now with a all the same effect by the, by the fact that they all have this problems that they, you know, have these long term bonds that, you know, have a much lower market value that is on their books. and so if someone wants to withdraw it, this can happen then to many of these regional banks. and if it happens to be a small but, you know, then it becomes a standard time. we know that these are these, these medium sized banks that, that the thresholds for what was considered a says systemically, as a risky bank,

was, was raised considerably so that these mid sized banks should actually been exposed to a lot more stress test to liquidity requirements. isn't it fair to say that the that the streaming has been taken off of them? yeah, probably, and we will have to recalibrate. but this is no, you know, no exact science bank regulation because the shocks are never quite the same. and this is again, a very particular combination of things that we, these long term government bonds, very strong interest rate hikes by the, by the fed at so, you know, with the regulators are always trying to catch up. the question is, you know, again, was there something and as talk i here in the community that you know, some in the that they actually lobbied for less regulate for less, regulate precisely the small and medium sized banks, or even in the trump administration. so i don't know whether not fair,

it is to play the trumpet ministration, but there were certainly relaxations the loose thing up regulation after the financial crisis. and that will be after left to be looked again, or whether we can do something. but you know, in the end, right, not a rocket science or the exact sign of it, but it's a moving target facility of these things like are happen the through to go to university of notre dame. i'm sorry, this rocker we're going to leave it there. we have to wait to move on, but thank you very much. rigor bachman ever submitted him. thank you. i will go to brazil now where germany's economy minister says he wants to launch a new chapter in bilateral relations. especially when it comes to trade and climate policy. oh, but havoc said there should be a green bridge across the atlantic. he's joined on the trip by german agricultural minister, urge him ers, the mayor. you can see him, they're wearing sunglasses. in part because brazil's farmers have been growing biofuels for years. now having said brazil had enormous potential for green hydrogen production. the to messrs also called for negotiations to resume work on

a free trade agreement with the south american confederation macros, or of which brazil is the largest member or we go now to correspond him on his ebert in rio de janeiro for more mathias, german ministers for economy and agriculture sank, brazil and columbia are really ideal partners for sustainable to trade. what exactly do they want from these countries? what do we say? yeah, both sides. he confirmed that they are yet can cooperate with sustainable energies together to produce these energies. because the potential is really high, he and brazil am, for example, in the solar energy sector and as well, especially air for wind energy in the north of brazil. there are many states like man, yoke, sierra and re grunge. are not she where there's a strong winds for 8 months a year, at least. so ad there can be produced, green hydrogen em because the potential is high for offshore wind parks and that

could cause that green hydrogen from brazil could be a source of clean energy for german industry in the future. we know that critics of closer ties point, chris, chris, of closer ties between europe and south america, often point to environmental concerns, especially when we look at the the amazon basin as reason not to further expand these ties to what extent that make a difference for expanding ties when that's exactly what these german minister seems seem to want yet the concerns are that agricultural exports. they may increase with an agreement, as for example, regarding soybeans and meet an sugar. and yeah, that could effect the different deforestation rates which are already high. so there is a lot of critics in the civil society who reject and possible agreement. alright, that's mathias abbotts are correspond in rio de janeiro. thank you very much.

all right, here's a look at our top story. government have been reassuring citizens that their financial systems are secure. following the collapse of 2 banks in the us, silicon valley bank and signature bank, we're close by regulators after falling into a liquidity crisis and to run on deposits. us treasury insist that will not be a repeat of the 2008 financial crisis. all right, that's our show for more check us out online. he to be dot com slash business. we're also on youtube under the dbi news channel. i'm from beardsley. thanks watching. no one does coastal protection better than the dutch small wonder because large parts of the netherlands lie below sea level. the threat of flooding has long and still the spirit of innovation here, making the country

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