Here’s what we have for you today:
• US’ report card
• EU fine
• Branch down
US credit on the line
Debt ceiling raised: In June 2023, the US Senate passes bill to raise debt ceiling and cap government spending for two years.
Prior nudge: Fitch Ratings, a top credit rating agency, put the United States’ AAA long term foreign currency issuer default rating on negative watch on 5/24/23.
Punch line: “The failure to reach a deal to raise or suspend the debt limit by the x-date would be a negative signal of the broader governance and willingness of the U.S. to honor its obligations in a timely fashion” Fitch said.
Previously: Moody’s and S&P (ratings agencies), had placed the US on negative watch during debt ceiling talks in 2011. S&P followed through with the downgrade while Moody’s did not.
Chunky Meta cut from European Union
The transaction: Meta (owner of Facebook) was ordered to suspend the transfer of user data from the EU to the US and has been fined $1.3 billion from Ireland’s Data Protection Commission (DPC).
Turnaround: The ruling does not affect data transfers at Meta’s other main platforms, Instagram and WhatsApp. Meta said it would appeal against the decision and seek a stay on the data transfer order.
Finger pointing: Meta, whose EU base is in Ireland, said it had been “singled out” by the DPC despite thousands of other businesses using the same data transfer processes.
US banking on branch closure
Downsizing: Big banks are closing branches in New Jersey, Philadelphia, Maryland, Ohio, Washington, D.C., Illinois, Michigan, Nevada, California, and Arizona.
The slide: According to the US Federal Deposit Insurance Bureau (FDIC), large commercial US banking locations have fallen from 8,000 in 2000 to 4,236 by 2021 and 4,194 by 2022.
Currently: “US banks closed 149 branches and opened 49 in March, resulting in a total of 78,588 active branches” according to S&P Global Market Intelligence data from April 28, 2023.
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