Scars of a meltdown

How the current banking instability is different than the 2008 financial crisis. [View in browser]( [Bloomberg]( There’s a sense of déjà  vu for those government officials who still bear the scars of the financial crisis of 2007-2008. The conditions surrounding the overnight lifeline thrown to Credit Suisse following Silicon Valley Bank’s collapse last week are still very different to the subprime crisis that almost brought down the global financial system 15 years ago. Key reading: - [Arrogance, Incompetence or Both: What SVB’s Failure Really Means]( - [72 Hours in Washington: How the Frenzied SVB Rescue Took Shape]( - [Populist Fury Grips Congress in Echo of 2008’s Bailout Backlash]( - [Credit Suisse Is in Crisis. What Went Wrong?]( For one, governments worldwide have since imposed regulatory guardrails that envisage exactly the kind of failures of three regional banks witnessed most recently in the US. Another key difference is the fragile economic and political state of the world today. War in Europe, US-China tensions, recession, an energy crisis and rampant inflation contribute to a febrile mood among investors. The last thing anyone needs is a full-blown financial crisis. Bailing out banks may still not be popular, but the lessons of the past include that preventative action now can mitigate crisis later. Even so, the political costs can be high. In the US, bank rescues caused resentment that contributed to the rise of the populist Republican right, while also firing up the Occupy Wall Street movement. Fringe political groups in Europe on both the right and left went mainstream during the euro crisis that erupted in 2009. Now, as then, the fear among markets and political leaders alike is of contagion rippling across an interconnected world. The paradox is that governments led by Washington and Beijing are pumping money into strengthening their self-reliance in areas from AI to clean tech. Only yesterday, South Korea announced an industrial policy armed with some $400 billion as its response to what President Yoon Suk Yeol called a widening “economic war.” Even just the whiff of financial meltdown serves to underline how deeply intertwined the world’s economies remain — and how painful efforts to decouple might be. — [Alan Crawford]( Customers outside a Silicon Valley Bank branch in Wellesley, Massachusetts, on Monday. Photographer: Sophie Park/Bloomberg [Click here]( to listen to our Twitter Space conversation dissecting the UK budget and assessing the political ramifications with two of our UK government reporters.  And if you are enjoying this newsletter, sign up [here](. Global Headlines Mending ties | South Korea’s Yoon is in Tokyo to [repair ties]( with Japan and bolster security cooperation with a mutual US ally, arriving just hours after North Korea test-fired a suspected intercontinental ballistic missile. Pyongyang has shot off 11 rockets since Feb. 18, including what appeared to be a new close-range missile designed to hit US bases in South Korea. - Tokyo and Seoul’s latest attempt to put their bitter last-century disputes to rest signals a growing recognition in both capitals that their [security]( now may depend on each other. - [Business groups]( have a part to play in the thaw, US Ambassador to Japan Rahm Emanuel said in an interview. Reaching out | As he fixes relations with Iran or reaches out to Israel, Crown Prince Mohammed bin Salman has [one key goal]( in mind: ensuring his multi-trillion-dollar vision to transform Saudi Arabia stays on track. [Sam Dagher]( writes that the desire for stability is behind the drive to shield his country from any possible escalation in Israel’s confrontation with Iran. President Xi Jinping promoted China’s development approach in a speech to a gathering of political groups, calling it “a [sure path]( to build a stronger nation.” Xi is pledging to boost key technologies in the face of efforts by the US to curb China’s tech ambitions. TikTok ultimatum | Sell up or face a ban in the US is the message Washington has given the owners in China of popular video-sharing app TikTok, sources say. The Treasury Department’s Committee on Foreign Investment made the demand recently to ByteDance, in an [escalation]( in the long-running standoff over privacy concerns around Chinese control of its data and algorithm. - Coming Soon: Understand power in Washington through the lens of business, government and the economy. [Sign up now for the new Bloomberg Washington Edition newsletter](, delivered Mondays, Wednesdays and Fridays. Watch Alex Barinka’s report on Bloomberg Television. Best of Bloomberg Opinion - [Resentment Is the Key to Reading Putin’s Mind: Andreas Kluth]( - [Jeremy Hunt Is Up Against a UK Vibecession: Therese Raphael]( - [Protecting the Food Supply Means Thinking Smaller: Amanda Little]( Further adrift | The Conservative Party’s pledge to “level up” disadvantaged parts of the UK has shown scant reward in Scotland, undermining a promised Brexit dividend and key pillar in the government’s strategy to counter pro-independence forces. When measured against London and England’s wealthy South East, nearly all of Scotland’s 59 Westminster constituencies are [falling behind](, according to Bloomberg UK’s Levelling Up Scorecard. Explainers you can use - [What Would Happen if South Africa’s Electricity Grid Collapsed]( - [The Tech Behind Those Amazing, Flawed New Chatbots]( - [Why UK Tories Resent Europe’s Human Rights Court]( Clean-tech race | The European Union is staking a claim in the [global race]( to be a manufacturing hub for technologies critical to the climate transition and show it can compete with the US and China. The bloc’s executive arm will announce regulation aimed at ensuring it produces 40% of its clean-tech needs in key sectors like solar panels and batteries by the end of the decade. Watch Bloomberg TV’s Balance of Power at 5pm to 6pm ET weekdays with Washington correspondents [Annmarie Hordern]( and [Joe Mathieu](. You can watch and listen on Bloomberg channels and online [here](. News to Note - A Pakistan court [suspended]( any further police action against former Prime Minister Imran Khan until tomorrow, after two days of clashes outside his home prevented security officials from arresting him. - More than 1,000 additional people could still [face charges]( in connection with the Jan. 6, 2021, attack on the US Capitol, according to a letter to the DC federal court from the US attorney in Washington. - Commuters in London are in for a second day of [disruption]( as rail workers strike across the country and the impact of yesterday’s industrial action on the Tube lingers on. - Iranian authorities arrested 110 people on suspicion of being linked to [suspected poisonings]( at girls’ schools that have hospitalized hundreds of students since November. And finally ... Pitches for gold are making the rounds on right-leaning networks and Donald Trump’s Truth Social feed. [Mark Niquette]( explains why [gold retailers]( have found a receptive audience for marketing their products to conservatives and especially supporters of the former US president who tend not to trust the Joe Biden administration and government institutions. Gold on display at the Conservative Political Action Conference in National Harbor, Maryland, on March 3. Photographer: Al Drago/Bloomberg Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Want to sponsor this newsletter? [Get in touch here](. You received this message because you are subscribed to Bloomberg's Bloomberg Politics newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. [Unsubscribe]( [Bloomberg.com]( [Contact Us]( Bloomberg L.P. 731 Lexington Avenue, New York, NY 10022 [Ads Powered By Liveintent]( [Ad Choices](