Mar 22 update

In a show of support, Xi Jinping, China’s president, invited Vladimir Putin to visit China “at a time convenient for him”. Mr Xi is in Moscow for talks with his counterpart in the Kremlin; the pair discussed China’s plan for ending the war, which has been disparaged by the West. America urged Mr Xi to press Mr Putin to withdraw Russian troops from Ukraine. Separately, Kishida Fumio, Japan’s prime minister, is making his first war-time visit to Ukraine for talks with President Volodymyr Zelensky.

London’s Metropolitan Police is guilty of “institutional racism, misogyny and homophobia” according to a scathing new report. Lady Louise Casey, who authored the year-long review, recommended that Britain’s largest police force should be overhauled or risk being broken up. The report was commissioned by the Met after the rape and murder of Sarah Everard by a serving officer in 2021.

Janet Yellen, America’s treasury secretary, said that the American banking system is stabilising, but that the government would provide further support to smaller banks if necessary. Shares in several regional lenders rose at the news, including those in First Republic, a troubled mid-sized bank. Meanwhile, European bank stocks rose in early trading, as investors took heart from UBS’s acquisition of Credit Suisse.

Peter Obi, a defeated third-party candidate in Nigeria’s presidential election last month, filed a court petition challenging the flawed vote. Pollsters had put Mr Obi well ahead in the race, but he was ultimately defeated by Bola Tinubu, the candidate for Nigeria’s incumbent ruling party. Legal challenges of this kind are common in Nigeria, but the country’s Supreme Court has never overturned an election.

Ukraine’s defence ministry said an explosion in Crimea destroyed several Russian cruise missiles, although it did not claim responsibility for the blast. The weapons were being transported by train to Russian ships on the Black Sea. A Russian-installed official in the peninsula, which was seized by the Kremlin in 2014, said the explosion was caused by drones that were targeting civilians.

France’s government survived two no-confidence votes, ensuring that President Emmanuel Macron’s controversial pension reforms will become law. The votes were triggered by Mr Macron’s decision to push through much-needed measures that raise the retirement age from 62 to 64 without parliamentary approval. Protests erupted across the country in response. Mr Macron’s popularity rating has fallen to just 28%, its lowest point since 2019.

The IMF approved a $3bn bailout for Sri Lanka. The country has been beset by an economic crisis because of Russia’s invasion of Ukraine and government mismanagement, which have created severe shortages and high inflation. The loan will be issued in nine tranches, with each one conditional on Sri Lanka’s adoption of reforms, including a restructuring of its reported $95bn-worth of public debt.

Fact of the day: 12.8%, the percentage by which Chinese exports to Russia increased in 2022. Read the full story.

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PHOTO: EPA

Tremors in the banking system

Following another week of turmoil in global banking, UBS, a Swiss bank, announced on Sunday that it was acquiring Credit Suisse, its struggling Swiss rival, in a rescue deal that valued the latter at around SFr3bn ($3.2bn). As part of the deal, holders of Credit Suisse’s “additional Tier-1” bonds—a type of debt designed to absorb losses when a bank fails—were wiped out. This controversial move is reverberating through the market for similar debt, worth $275bn, as investors revise their expectations of what might happen in the unlikely event of another bank failure.

The enlarged UBS will now begin a knotty integration process with Credit Suisse. The new mega-bank will hold nearly one-third of the Swiss market and manage $3.4trn through its wealth-management division. The combined investment-banking business will see brutal cost-cutting in coming months, much of it inflicted on traders and dealmakers from Credit Suisse. Financial policymakers around the world will be fervently hoping the new union succeeds.

PHOTO: REUTERS

Donald Trump faces indictment

After years of unabated scandal, a pay-off to a porn actress may yield the first criminal charges against Donald Trump. For weeks a grand jury in Manhattan has been hearing evidence that America’s former president falsified business records to hide hush money paid to Stormy Daniels (née Stephanie Clifford), whom he allegedly slept with in 2006. A vote to indict him, which appears imminent, would cue the indignities of arrest: mugshot, finger-printing and a not-guilty plea.

The case is far from straightforward. To classify the allegedly fraudulent record-keeping as a felony, rather than a mere misdemeanour, prosecutors must prove that it facilitated a second crime, of falsifying campaign expenses. But the Federal Election Commission, a regulator, dropped its civil probe into that matter because of partisan deadlock among commissioners. And the prosecutors’ star witness—Michael Cohen, Mr Trump’s former lawyer—is himself a convicted felon. The outcome of any case is unpredictable but its place in the history books is assured.

PHOTO: AFP

An election for Wisconsin’s Supreme Court

On Tuesday two candidates for an open seat on Wisconsin’s Supreme Court will debate in Madison, the state’s capital. The election is being closely watched. At stake is a liberal or conservative majority on the highest legal authority in one of America’s closest swing states. Wisconsin’s governor and one of its two senators are Democrats. But thanks to gerrymandering, Republicans dominate lower-level races and are just one seat short of a supermajority in the state senate.

The contest in the Supreme Court could shift the balance in Wisconsin’s politics. If Janet Protasiewicz, a liberal judge, wins, the court may be able to overturn an archaic state law banning abortion. And it could compel the state to undo some of the gerrymandering devised by the Republican-dominated state house. Victory for her opponent, Daniel Kelly, would maintain conservative control over the court, which has held since 2008.

PHOTO: GETTY IMAGES

Europe’s construction sector holds on

If there were a contest for the sector hardest hit by inflation and high interest rates, it would be a crowded field. Banks are currently in the lead, but construction firms could also be a solid bet. For them, higher rates means less demand from would-be house buyers. And higher prices for construction materials and energy shrink their margins.

So far, however, Europe’s construction sector is holding up. Figures released on Tuesday showed a construction rebound in January after a very weak December, with production in the euro area rising 3.9% in seasonally adjusted terms. And surveys of construction managers suggest that the sector’s overall confidence, while falling, is still higher than its average over the last twenty years or so.

Yet the number of new construction projects given the go-ahead is a cause for concern. In Germany, for instance, building permits issued for family dwellings fell by 26% in January compared with the year before. Europe’s builders will hope not to rival the continent’s banks for top spot anytime soon.

PHOTO: AP

A global baseball prize

America is the ancestral home of baseball. Yet curiously it has won the game’s international tournament— the World Baseball Classic, or, between 1938 and 2011, the Baseball World Cup—only five times in 43 attempts. American stars routinely skip the tournament as the risks of injury or suffering a humiliating loss outweigh the rewards; most of their fans care more about the domestic competition, Major League Baseball.

Yet the American team for this year’s competition, which concludes with the final on Tuesday, is strong. Mike Trout and Mookie Betts, two generational talents, are in the squad and will play in the final, when America will take on Japan. America’s general manager, Tony Reagins, said that securing Mr Trout’s participation made recruiting other players easier. A win would bring America its second successive title. That would make recruitment for the next edition, in 2026, much easier.