US government: Silicon Valley Bank clients will get funds

US government: Silicon Valley Bank clients will get funds
A Silicon Valley Bank logo is seen through broken glass in this illustration taken March 10, 2023. (REUTERS Illustration)
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Updated 13 March 2023
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US government: Silicon Valley Bank clients will get funds

US government: Silicon Valley Bank clients will get funds
  • Regulators closed the bank on Friday when depositors rushed to withdraw their funds all at once
  • Execs feared that if the failed bank is not rescued, customers would make runs on other financial institutions in the coming days

NEW YORK: The US government took emergency steps Sunday in an attempt to prevent more instability among banks after the historic failure of Silicon Valley Bank, and assured clients of the failed financial institution that they would be able to recover all of their money quickly.
The announcement came amid fears that the factors that caused the Santa Clara, California-based bank could spread, and only hours before trading began in Asia. Regulators had worked all weekend to try and come up with a buyer for the bank or broker another intervention, and as another bank, Signature Bank, was shuttered. The Treasury Department, Federal Reserve and FDIC said Sunday that all Silicon Valley Bank clients will be protected and have access to their funds and announced steps designed to protect the bank’s customers and prevent more bank runs. “This step will ensure that the US banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth,” the agencies said in a joint statement.
Regulators had to rush to close Silicon Valley Bank, a financial institution with more than $200 billion in assets, on Friday when it experienced a traditional run on the bank where depositors rushed to withdraw their funds all at once. It is the second-largest bank failure in US history, behind only the 2008 failure of Washington Mutual.
Some prominent Silicon Valley executives feared that if Washington didn’t rescue the failed bank, customers would make runs on other financial institutions in the coming days. Stock prices plunged over the last few days at other banks that cater to technology companies, including First Republic Bank and PacWest Bank.
Among the bank’s customers are a range of companies from California’s wine industry, where many wineries rely on Silicon Valley Bank for loans, and technology startups devoted to combating climate change.
Sunrun, which sells and leases solar energy systems, had less than $80 million of cash deposits with Silicon Valley Bank as of Friday and expects to have more information on expected recovery in the coming week, the company said in a statement.
Stitchfix, the popular clothing retail website, disclosed in a recent quarterly report that it had a credit line of up to $100 million with Silicon Valley Bank and other lenders.
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.
No plan had been announced on Sunday afternoon with hours to go until Asian markets opened. There were widespread hopes that Silicon Valley Bank would be acquired, but it was unclear if a buyer would emerge.
Federal officials set a deadline of 2 p.m. for potential buyers to submit bids in a government auction for the bank, according to a person who familiar with the matter. The person requested anonymity to talk about private conversations. Bloomberg was first to report the auction.
Yellen, in her Sunday morning 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, based in Santa Clara, California, is the nation’s 16th-largest bank. It was the second biggest bank failure in US 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 US 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. No buyer has been announced.
Sheila Bair, who was the FDIC chair during the 2008 financial crisis, recalled that with almost all the bank failures during that time, “we sold a failed bank to a healthy bank. And usually, the healthy acquirer would also cover the uninsured because they wanted the franchise value of those large depositors so optimally, that’s the best outcome.” But with Silicon Valley Bank, she told NBC’s “Meet the Press,” “this was a liquidity failure, it was a bank run, so they didn’t have time to prepare to market the bank. So they’re having to do that now, and playing catch-up.”
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.
Democratic Rep. Ro Khanna, whose district includes the city where the bank has its headquarters, said it was imperative that the government guarantee all depositors and that they “have full access to their accounts Monday morning.”
“Time is ticking,” he told CBS.
Sen. Mark Warner, D-Virginia, 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 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.”
 


Saudi Arabia elected ISO council member for two years

Saudi Arabia elected ISO council member for two years
Updated 21 September 2023
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Saudi Arabia elected ISO council member for two years

Saudi Arabia elected ISO council member for two years

RIYADH: In recognition of its efforts to implement health and safety standards, Saudi Arabia has been elected as a member of the council of the International Organization for Standardization, the Saudi Press Agency reported.

The Kingdom will maintain the position for a two-year period starting 2024, it said.

This was announced during ISO’s 45th general assembly meeting held in Brisbane in Australia.

The Saudi Standards, Metrology, and Quality Organization, known as SASO, represented the Kingdom at the recent ISO meetings.

SASO is committed to the ongoing enhancement and revision of Saudi standards and technical regulations, with its efforts aimed at safeguarding the nation’s markets against counterfeit, substandard, and deceptive products, ultimately bolstering the national economy. 

Meanwhile, ISO, which came into existence in 1947, is an independent, nongovernmental international organization with 169 members.


Red Sea International Airport becomes operational

Red Sea International Airport becomes operational
Updated 21 September 2023
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Red Sea International Airport becomes operational

Red Sea International Airport becomes operational

RIYADH: The Red Sea International Airport became operational with the touchdown of the first Saudia flight early on Thursday, according to the Red Sea Global. 

In a statement, the multi-project developer behind the world’s most ambitious regenerative tourism destinations, The Red Sea and AMAALA, said that the flights from King Khalid International Airport in Riyadh will arrive every Thursday and Saturday, connecting the two destinations in less than two hours. 

It added that a flight would return to the capital on the same day. “We promised to make TRS a place where people from all around the world would come to experience the best of Saudi culture, hospitality, and nature. Now, with the first flight touching down at RSIA, and our first resorts receiving bookings, Saudi Arabia’s position on the global tourism map is all but secured,” said John Pagano, group CEO of Red Sea Global. 

From today, the statement added, the flights depart Riyadh every Thursday at 10:50 a.m. before flying back to the capital after 165 minutes. It added that the other flight departs from Riyadh every Saturday at 12:50 p.m., with the return flight at 15:35 p.m. from the Red Sea airport. 

Positioned within an eight-hour flight from 85 percent of the world’s population, the airport will grow to welcome international flights from next year as additional phase one resorts open their doors. 

According to the statement, RSIA is operated by daa International, which has supported RSG with design validation and commissioning of RSIA since 2020. 

“With the arrival of RSIA’s first commercial flight, daa International’s operational responsibility commences,” it added 

In its press release, RSG also revealed the new brand for RSIA with visitors to see the brand expressed across multiple touchpoints, from the airport terminal and staff uniforms to the electric mobility vehicles that will transport passengers from air to land side. 

“RSIA is the gateway to TRS destination. It is the first impression visitors have, and their parting memory when they leave. The brand echoes the qualities of the five-star hospitality guests will enjoy across the destination,” Pagano added. 

The brand icon is a representation of the RSIA’s unique architecture. The company noted that the iconic shape is inspired by the bird’s eye view of the airport’s exterior. “It has been created to express the creativity, novelty, and sophistication of the brand in a way that is contemporary and distinct.” 

RSG further stated that it has made great progress across other infrastructure works to ensure TRS is ready to welcome visitors and meet its promises for responsible development and regenerative tourism. 


Sole Pakistani company at Foodex expo eyes joint ventures

Sole Pakistani company at Foodex expo eyes joint ventures
Updated 21 September 2023
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Sole Pakistani company at Foodex expo eyes joint ventures

Sole Pakistani company at Foodex expo eyes joint ventures

ISLAMABAD: A Pakistani food company participating in the 10th edition of Saudi Arabia’s leading international food exhibition, Foodex Saudi, has praised the Kingdom’s market, saying over a dozen Saudi companies had expressed interest in forming joint ventures and distributing its products.

The 10th edition of Foodex Saudi, the Kingdom’s leading international exhibition for food and beverages, was held from September 17-20 at the Riyadh International Convention and Exhibition Center and featured over 500 exhibitors from 75 countries, offering an array of food and drinks to Saudi buyers from the distribution, retail, manufacturing and hospitality sectors.

Dashi International, a Karachi-based food company that sells ready-to-cook and ready-to-eat food products, was among the 500 exhibitors at the event.

“Dashi International is the only Pakistani company participating in this edition of the Foodex Saudi exhibition,” Fawaz Khalil Allahwala, the company’s chief executive officer, told Arab News over the phone from Riyadh.

“It was a great opportunity to showcase our product as the Saudi market is certainly growing and we found a dozen leads from interested companies from the Kingdom,” Allahwala said.

He said some Saudi companies had sought joint ventures with Dashi International while others were interested in a distribution partnership with the Pakistani company. He declined to name the Saudi companies. 

Allahwala said he experienced a lot of “enthusiasm and optimism” at the exhibition where visitors explored various food items with the aim of seeking new business opportunities.

He said the response was “encouraging and positive.”

“The Saudi market seemed very receptive and growing so we are very hopeful of progress,” Allahwala added.

Hamzah Gilani, the spokesperson of the Pakistani consulate in Jeddah, said the exhibition played a “crucial role” in advancing and diversifying Saudi Arabia’s thriving food and drinks industry.

“This success [of Dashi] should encourage more Pakistani companies to seize such opportunities and expand their involvement in the international market,” Gilani told Arab News, saying Foodex provided Saudi buyers with an “unprecedented opportunity” to discover a diverse range of global food and beverage products.

“This esteemed gathering facilitated extensive networking opportunities,” Gilani said, “and showcased latest industry innovations.”


Saudi airline passenger complaints drop 11.8% in August: GACA   

Saudi airline passenger complaints drop 11.8% in August: GACA   
Updated 21 September 2023
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Saudi airline passenger complaints drop 11.8% in August: GACA   

Saudi airline passenger complaints drop 11.8% in August: GACA   

RIYADH: As part of ongoing efforts to enhance efficiency and competitiveness in Saudi Arabia’s aviation sector, the number of passenger complaints among carriers in August dropped by 11.8 percent compared to the same month last year.

Data released by the General Authority of Civil Aviation revealed that there were 1,442 grievances in August 2023, down from the 1,636 recorded in the corresponding month in 2022. 

These developments align with GACA’s economic regulations, which are designed to support the sector’s rapid growth, improve the passenger experience, and ensure transparency and fairness. 

Saudia, formerly known as Saudi Arabian Airlines, received the fewest complaints among carriers, with a total of 14 complaints per 100,000 travelers and a 100 percent timely handling rate. 

Flynas ranked second with 30 such cases per 100,000 passengers and a closure rate of 98 percent.  

Flyadeal came in third with 105 grievances per 100,000 travelers and a timely handling rate of 52 percent. 

The most common complaints in August were related to flights, boarding services, and tickets. 

Among international airports serving more than 6 million passengers annually, Prince Mohammed bin Abdulaziz International Airport had the lowest complaint rate at 0.3 percent per 100,000 passengers. 

For international airports with fewer than 6 million passengers per year, Prince Naif bin Abdulaziz International Airport received the fewest grievances, with a rate of 1 percent per 100,000 customers.  

Both airports recorded only two such cases, each, with a reported handling rate of 100 percent. 

Among domestic airports, King Saud Bin Abdulaziz Airport had the lowest rate at 2 percent per 100,000 travelers. Only one grievance was raised by travelers, with a 100 percent timely management rate.    

Earlier this month, Saudi carriers disbursed a total of SR58 million ($15.4 million) in compensation to travelers during the 2021-2022 period, according to GACA.  

In an official statement released at the time, GACA emphasized that these reimbursements addressed a range of customer concerns, including delays, loss of luggage, flight cancellations, and disruptions to flight schedules.  

This initiative aligns with the authority’s commitment to protecting passenger rights. It also serves as a precursor to the upcoming regulations set to take effect on Nov. 20, aimed at advancing operations and supporting the Kingdom’s growth objectives in the aviation sector.  

GACA’s vision is to create a safe and secure aviation environment by following the most rigorous international safety standards and building a modern airport system that consistently provides exceptional services. 


SAIL and Bahri sign MoU to boost maritime collaboration

SAIL and Bahri sign MoU to boost maritime collaboration
Updated 21 September 2023
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SAIL and Bahri sign MoU to boost maritime collaboration

SAIL and Bahri sign MoU to boost maritime collaboration

RIYADH: In an effort to accelerate collaboration and share expertise, Saudi national shipping company Bahri and SAIL, a subsidiary of the Saudi Investment Recycling Co. owned by the Public Investment Fund, have signed a memorandum of understanding to enhance their services within the Kingdom. 

The alliance, formed during the two-day Saudi Maritime Congress in Dammam, aims to facilitate maritime sector development, provide technical support, and promote knowledge and expertise exchange between the two companies, according to a press release. 

Under the agreement, both companies will collaborate on technical support in various domains, including shipbuilding, procurement, ship management, and leasing.  

This partnership will encourage the exchange of ideas on shared interests, such as various vessel types and targeted services.  

Additionally, the two entities will engage in joint studies and research initiatives to enhance their operations in line with industry best practices. 

Commenting on the deal, Ziyad Al-Shiha, CEO of SAIL, said he expects this agreement to play a pivotal role in shaping the maritime sector’s future, positioning the Kingdom as a global hub in the industry. 

Ahmed Ali Al-Subaey, Bahri’s CEO, stressed the importance of this strategic cooperation, highlighting the combined strengths and expertise that will contribute to establishing an ecosystem promoting innovation, creating job opportunities, and showcasing Saudi Arabia as a global logistics hub. 

This partnership marks significant progress in advancing the industry as both parties aim to leverage their strengths to provide innovative and efficient solutions tailored to the evolving needs of the maritime logistics market. 

SAIL offers marine pollution response services as part of the Kingdom’s efforts to preserve the marine environment and its beaches.  

Supported by advanced early monitoring and alarm systems, this service combats marine spills and hazardous materials in strategic locations along the Kingdom’s coasts on the Red Sea and the Arabian Gulf.  

Additionally, it enables swift and efficient responses to marine environmental accidents and disasters.