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CNN International: Credit Suisse Borrowing up to $54B from Swiss Central Bank; U.S. Releases Video of Russian Fighter Jet Forcing Down U.S. Drone; Five Arrested after Artists Paint Red Line to Jerusalem's Supreme Court; Is the Past Week's Banking Crisis like 2008; Students Worldwide Raising Awareness of Modern-Day Slavery. Aired 8-8:30a ET
Aired March 16, 2023 - 08:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
MAX FOSTER, CNN HOST: Hello, welcome to CNN "Newsroom", I'm Max Foster in London. Just ahead shares in embattled Bank Credit Suisse rebound after lifeline from the Swiss Central Bank more on global markets in just a moment. We are now seeing the moment when a Russian fighter jet forced down a U.S. drone over the Black Sea that dramatic footage just ahead.
And today is known as My Freedom Day. The students worldwide stand up against human trafficking and modern day slavery. We begin with a liquidity lifeline for one of the world's largest banks amid growing fears over the stability of the global financial system.
Shares in Credit Suisse remain up after surging at the start of trading after the Zurich based lender agreed to a $54 billion loan from the Swiss Central Bank overnight. Europe's main markets are up as well. So good news there on Wednesday, Credit Suisse shares lost more than a quarter of their value, though, in one day.
Global markets have been on edge following the bank turmoil that began in the United States last week. And we're now less than 2 hours away from a decision that will likely be watched closely worldwide. And that is when the European Central Bank announces where it'll whether rather it'll increase rates.
Anna is watching that more attention on this unusual because Christine Lagarde said she pretty much said she was going to increase rates. But now there's some concern that might sort of destabilize things.
ANNA STEWART, CNN REPORTER: Well, if we look at the issues that we've had in the banking sector, and not just in Europe, we look at Silicon Valley Bank as well in the U.S. At the root of heart, part of the problem is interest rates and what that actually means for the balance sheets of banks because they hold these really long data, government bonds, very safe assets, but of course, worth a lot less as interest rates rise.
And as a result of that there is a big question as to whether they need to bolster those balance sheets. Credit Suisse also had a whole load of other issues. But at the heart of this facing the banking sector is how much further are rates going to go? And will Central Banks act have given they're seeing this huge market volatility.
As you say, last meeting in February, the ECB said the Governing Council intends to raise rates by another 50 basis points in March. That's almost unheard of not just to give the forward guidance, but to really bake in just how much they're going to raise it by.
At this stage, it looks like they're going to have to do something. Do they cancel a rate hike altogether? But that suggests they're not taking inflation seriously, and inflation is still very high?
STEWART: Well, exactly. Or do you just pare back what that planned rate hike was 25 basis points. I think that is the study bet at the moment. But also what else is Christine Lagarde going to say to try and study nerves through the market, is the ECB going to have to do this sort of, we'll do whatever it takes sort of comment just to confirm that all banks will be looked after in Europe.
FOSTER: OK, back with you when you go decision. Anna thank you. Newly released footage shows the encounter between the U.S. drone and Russian fighter jet that forced the drone into the Black Sea. Here it is. It was released today from the U.S. Military a brief part of Tuesday's encounter. The Pentagon says it lasted 30 to 40 minutes though. This is the jet coming in dumping fuel on the drone.
The camera from the drone, of course, comes back again in the footage and you see the propeller there being damaged and that's what forced the drone down which all this is all from the U.S. Military point of view Russia denying its pilots acted recklessly. Natasha Bertrand is at the Pentagon with more on this. It is fascinating, isn't it? Because this was classified video, but the Pentagon pretty much saying it proves they will write on their story.
NATASHA BERTRAND, CNN NATIONAL SECURITY REPORTER: Exactly right, Max. And if you watch it, it does seem to directly contradict the Russian narrative of events, right? Let's just remind viewers what the Russians have been saying again, they have been saying that this plane this Russian fighter jet did not make direct contact with that U.S. drone that was flying over the Black Sea.
But as we can see from the video, the fighter jet is seen kind of approaching the drone very quickly, dumping jet fuel on it. The camera then cuts out on the drone, and then when it kind of reemerge as you can see that the propeller on the drone has actually been damaged.
And the damage on that drone the U.S. says really could have only happened right from an impact from that fighter jet and that is the moment you see the camera cut out that is the moment of the collision between the plane and the drone. And so all of this really contradicts what the Russians have been saying.
And we are also told that this harassment by the Russian fighter jet too of the drone was actually direct order by officials within Russia's Defense Ministry. So this was not the action of some rogue pilot. This was actually a direct tasking that the Russian Ministry of Defense gave to these pilots.
Now it remains unclear whether the wreckage from this drone is going to be recovered by either the U.S. or by Russia, the Russians have reached the site of the wreckage we are told, but it's unclear whether they're going to be able to actually collect all of the debris because the part of the Black Sea where that drone didn't land is almost a mile deep.
So it's going to be very difficult in the U.S. as that they don't have any naval assets in the area that can readily collect that debris. So right now what we're watching for is whether the Russians are going to try to seize it.
However, importantly, the U.S. has said that they did wipe the drone have any sensitive information as it kind of plummeted into the Black Sea so nothing really of Intel value that the Russians could get anyway but again, the major incident here between the U.S. and Russia, prompting a rare phone call between the Secretary of Defense Lloyd Austin and his Russian counterpart, Sergei Shoigu just yesterday, Max.
FOSTER: OK, Natasha, thank you for explaining that from the Pentagon. Now, for the first time in more than a decade, the leaders of South Korea and Japan are meeting South Korean President Yoon Suk Yeol is in Tokyo for the fence mending a summit the aim is to confront the growing threat from North Korea and concerns about China.
Not to be outdone, North Korea fired a long range ballistic missile into the waters off the east coast of the Korean Peninsula as CNN's Marc Stewart covering the visit joining us from Tokyo. These are two countries with a lot in common, but just explain where the differences and tensions are?
MARC STEWART, CNN CORRESPONDENT: Well, they both share a shared stress, and that comes from North Korea. And that has prompted these two day shifts to basically, for lack of better words drop some of the tension in the past. And that includes a dispute that dates back to World War Two, when Japan was occupying Korea and the treatment of Korean workers by the Japanese.
It was a moment in time that created some very deep wounds between South Korea and Japan that impacted the emotional responses between the two countries, the economic policies between the two countries as well as politics, but because of threats from North Korea, in particular, these two nations have decided to try to resolve these issues they have.
There was an agreement on this labor issue a few weeks ago, and they are moving forward and basically creating a new diplomatic era. In fact, as we heard today from the Prime Minister Fumio Kishida, that along with South Korea, the two nations will resume shuttle diplomacy to basically create a new chapter in relations.
And what he means by that is that these nations who had been silent really for 12 years are going to start talking once again. We're also hearing from South Korea's President Yoon Suk Yeol "We agreed today that people of the two countries have suffered direct or indirect damage due to the frozen bilateral relations, and agreed to restore and develop Korea-Japan relations as soon as possible.
We also heard today from President Yoon saying that the nations have agreed to completely normalize its military intelligence sharing agreement with Japan showing that there is a lot at stake so certainly a feeling of optimism here and on this term of this notion of a shuttle diplomacy, Max.
They hope that this will cover not only things involving the military, but also politics, economy and culture. So certainly the start of a new era at least that is the hope I hear in Tokyo for both Japan and South Korea, Max.
FOSTER: OK, Marc Stewart thank you for joining us from Tokyo with that. Israelis are once again taking to the streets to try to stop a controversial judicial reform plan. This was the scene in Tel Aviv earlier today, some protesters chanting democracy or death in Jerusalem.
Artists painted a red line on the road leading to Israel's Supreme Court. Police arrested 5 people suspected of involvement. All of this coming a day after Israel's President unveiled his own proposed compromise on judicial reforms warning that Israel is on the brink of civil war.
CNN's Hadas Gold is following the developments from Jerusalem. What is the President's solution here, Hadas?
HADAS GOLD, CNN JERUSALEM CORRESPONDENT: Well, Max, I am at one of the dozens of protests across Israel today. I mean, there was one this protest actually started at the Hebrew University, this is a student led protests. They've made their way the streets around the protests that have actually ended here, just in front of the Supreme Court where police are blocking them from going onto the actual grounds of the Supreme Court.
But for many of the protesters here, many of them are young, or they are academics Professors at the University. They are very fearful about what this massive judicial overhaul will do to their own futures. They're fearful about what it will do to the independence of the judiciary, their people about what it will do to the rights of minorities.
To them they see this overhaul as a potential beginning of the end, some of them say, of Israeli democracy. But this judicial overhaul which will give the Israeli parliament massive new powers over the Supreme Court's building is just behind me that their supporters say that this is necessary to help rebalance the branches of government.
They argued that the Supreme Court without a written constitution has essentially been meddling in the rights of the Israeli parliament to legislate. Now, as you noted, the Israeli President Isaac Hertzog last night giving an impassioned speech, laying out his own compromise proposal on these reforms, to very long list of report.
But it does take in some elements from what the coalition government led by Israeli Prime Minister Benjamin Netanyahu was? But sort of softened just a little bit, but what was most interesting in his speech was how worried you can hear in his voice, he was about the state of the country.
He was sworn in for the first time saying that he was afraid to say it that he was worried that the divisiveness that's been tearing the people of Israel apart over this reform could potentially lead to a civil war and that is a very frightening notion. But almost as soon as his proposals went out, the Israeli coalition government and Israeli Prime Minister Benjamin Netanyahu essentially rejecting them saying they don't do what we need them to do.
It only perpetuates the problems that they see with the judiciary. Now, the question will be what will the Prime Minister and his government do next? Will they continue to push forward at the rapid speed at which they want to push this legislation through?
They want to done within the next few weeks. Or will they essentially sorry to stop to the reforms? Or will potentially come to actually a compromise with the opposition that compromise, Max, I have to say, the seeming less and less likely by the --, Max.
FOSTER: OK, Hadas thank you very much indeed. You can really feel the passion is gone, even the crowds there. We'll be back with her as you get more developments on that and whether or not there is a compromise to be found. The Biden administration meanwhile, threatening to ban TikTok in the U.S. unless the app's parent company spins off its share of the popular social media platform.
The U.S. is concerned that China could pressure TikTok or its Chinese parent company to hand over personal information on its 100 million U.S. users. TikTok says new ownership wouldn't solve the dispute though as that wouldn't necessarily change access to data.
Actor Ryan Reynolds will soon be laughing all the way to the bank as T-Mobile U.S. puts plans in place to buy his budget wireless provider. Mint mobile its part of a larger deal for up to $1.35 billion. The Deadpool Star purchased a minority ownership stake in Mint mobile in 2019.
The company is best known for its hilarious ads featuring panels. Still to come for the first time since the 2008 financial crash a major lender has been handed a lifeline and that's intensifying fears about another global banking crisis but can they be compared? We'll take a look.
FOSTER: Is this week's banking crisis like 2008? That's a question many people are asking as we look at the failure of two U.S. banks and worries about one massive a European bank. CNN's Fear and Greed Index charts emotions in the market. And this sums it up really at the moment extreme fear. Former U.S. Treasury Secretary Larry Summers has tried to calm the public.
(BEGIN VIDEO CLIP)
LARRY SUMMERS, FORMER U.S. TREASURY SECRETARY: I don't think this is a time for panic or alarm. This is not 2008 where people needed to be worried about whether they could get their money.
(END VIDEO CLIP)
FOSTER: Well, here to talk us through that CNN's Business Correspondent, Rahel Solomon joining me from New York. Thanks for joining us. It's almost worrying sometimes when everyone comes out people like Larry Summers, or even Biden saying stay calm, everything's safe, it makes you think, is it safe?
RAHEL SOLOMON, CNN CORRESPONDENT: Well, it almost has the opposite effect, right to your point, Max, right? Stay calm makes you wonder, well, you know, what should I be worried about? But yes, I mean, to be clear, there are some pretty significant differences from 2008.
Let's just start with the type of risk, for example, that SVB and Signature experience really depositors fleeing from the account into these banks, or having to sell treasuries at a loss, right, which we've talked about a lot. 2008 what we saw with a lot of these banks were just essentially sitting on bad loans, bad credit loans.
Another thing that's really important in the wake of 2008, is that many of these banks are certainly the largest banks are well capitalized; they are subject to intense regulatory scrutiny. And we may perhaps see even more of that in terms of the smaller banks and the wake of what we're seeing.
But Max, I think two things can be true, I think we could potentially still see some banks fall potentially. And that also doesn't necessarily mean that we are on the cusp of a global banking crisis for some of those reasons that I've already discussed.
FOSTER: We've been talking a bit, haven't we about bank runs? It could be argued, couldn't it? That very rich people are taking their money out of you know, some of these banks, but the wider public isn't so the panic hasn't quite set in.
SOLOMON: I think we're still waiting to see really what we're seeing with deposit inflows. We've certainly gotten some reporting that some of the major banks are seeing pretty significant inflows of money that people are moving their banks, are moving their deposits to some of the Bank of America's, for example, the Citi Group.
But I think we'll learn in the days to come how significant that really is part of the reason why Max, though. We don't expect this to really take hold, just because, of course, the FDIC here in the U.S. ensures almost, you know, most accounts right up to $250,000. And the average checking account, the average account in the U.S. is far less than that.
So for most people, you are safe, I think what is really interesting to see, as the dust settles and when the dust settles, is? Did the messages work, right? Did the Larry Summers of the world come out and who said don't panic? Did that message really resonate? And I think we just won't fully know the answer to that until the dust is fully settled.
FOSTER: All of this goes back to interest rates rising faster than many in finance really expected. So a huge amount of pressure right now on the Central Bankers.
SOLOMON: Absolutely and you know, what's interesting, Max. Some experts tell me it is what they do, but also perhaps more critically, what the Central Bankers say, right? I mean, messaging will be so important. For example, next week, when we hear from Chair Powell, on Wednesday of next week, what we hear in his statement, and also how he responds in the Press Conference.
And there is really fierce debate about the potential for misstep, for example, Secretary Larry Summers, saying last night on our CNN special that he believes it would be a serious mistake for Chairman Powell and the Federal Reserve to take their foot off the brake and stop raising rates, essentially, because that could send the opposite message right?
That could send the message that they are so spooked about financial instability that they are willing to take their foot off the brake when Max, as you know, just last week, Chair Powell will testify on the U.S. Capitol Hill that the more rates were to come. So it could potentially send the wrong message.
That's why communication for the Central Bankers is so critically important right now, when investors are clearly on edge and you can argue that many people around the world are on edge. I mean it certainly doesn't feel good to wake up and see your bank stock off 5 percent and perhaps even more.
FOSTER: It does seem that doesn't it? As if the system's improved and Central Bankers and other senior bankers have learned from 2008, because they've acted a lot more quickly, this time around to reassure the markets when something's gone wrong.
SOLOMON: I think that's a fantastic point. I've heard it so many times over the last few days, that one of the lessons that we learned from 2008, that regulators have learned from 2008 is that you have to step up very quickly, very aggressively to try to sort of put a limit around the collapse that we see right to try to prevent the contagion.
And the extraordinary measures, quite honestly, that we saw from the U.S. government over the weekend now from the Swiss National Bank, essentially saying that we will do what it takes to protect the financial community. When I asked experts ultimately, what will it take to create some calm and the financial community that is the one answer I hear time and time again.
That these really bold declarative statements from governments that they will do all that is necessary to protect the financial community from further collapse from further contagion. That is what's necessary right now and very important and its change.
FOSTER: Rahel, thank you so much for your insight. Thanks for joining us from New York. Coming up next, today is my freedom day and we'll take a look at how students from around the world are celebrating freedom and raising awareness of modern day slavery.
FOSTER: Today is my Freedom Day, a day that CNN teams up with young people around the world for a student led day of action against human trafficking the modern day slavery. High school students in the Philippines sent in their thoughts on what freedom means to them.
UNIDENTIFIED FEMALE: For me, freedom is to live empowered to do what you want to do, and the ability to move or --.
UNIDENTIFIED FEMALE: For me, freedom is the choice to live your life doing what you want.
UNIDENTIFIED FEMALE: For me, freedom is to respect others opinions.
UNIDENTIFIED FEMALE: For me, freedom is to learn and explore.
UNIDENTIFIED MALE: For me, freedom is to always choose what is right.
UNIDENTIFIED FEMALE: For me freedom is to learn and explore.
UNIDENTIFIED FEMALE: Freedom is to have my fellow students.
UNIDENTIFIED MALE: For me, freedom is to be accepted.
UNIDENTIFIED FEMALE: For me, freedom is to be loved.
UNIDENTIFIED MALE: For me, freedom is to live happily.
UNIDENTIFIED MALE: For me, freedom is to be in love.
UNIDENTIFIED FEMALE: For me, freedom is to do what I want.
UNIDENTIFIED MALE: For me, freedom is to love myself.
UNIDENTIFIED FEMALE: For me, freedom is to be independent.
UNIDENTIFIED FEMALE: For me, freedom is to live peacefully.
UNIDENTIFIED MALE: For me, freedom is the chase my dream.
UNIDENTIFIED MALE: For me, freedom is - who I am.
FOSTER: CNN's Correspondents covering this day of action at schools around the globe. Scott is standing by a Queen Anne's School - Caversham near London. Hi, Scott!
SCOTT MCLEAN, CNN CORRESPONDENT: Hey, Max. Yes, that's right. Throughout the day, the students here it's an all-girls school had been learning about human trafficking and modern slavery and they've gotten really a sense of the grim reality of the of the problem that affects millions of people around the world.
And they've been putting on performances and giving speeches and even writing some poetry. And this is actually an art installation that the students have been working on here.
The inside represent some of the problems that still exist around this issue and then the outer boxes, the bricks there are some of the artwork that the students have done around what freedom really means to them and I have three of the students here Tia, Eunice and Prunella that have been taking part today.
MCLEAN (on camera): And I just wonder guys, as you've been learning about this topic, and as you've been studying it a bit more what is really surprised you what stood out the most?
TIA GOLD, STUDENT: I really enjoyed. I was interested in learning about the child slaves in the chocolate industry. And that was really surprising to me that we have all here enjoyed chocolate when we're a child and we get good memories from eating chocolate in our childhoods, but those good memories create bad memories for the child slaves who are forced every day to get the cocoa.
MCLEAN (on camera): And Eunice, I wonder how much did you know about this topic before you started learning about it?
EUNICE DUROJAIYE, STUDENT: Not much before like this whole entire presentation. And that really opened my eyes to see like, how many people are in slavery? How many children our age are also in slavery? And like we think like to say we think there's not much behind it. But until now, like it demonstrated and showed us all like how bad the reality of making chocolate is for the people.
MCLEAN (on camera): Yes, and Prunella. Just very quickly, I wonder, are you optimistic about your generation's chances of solving this problem?
PRUNELLA DABLIZ, STUDENT: I think I definitely am, because our generation is so in with the media. And it's so much easier to spread messages and making sure the messages actually actions at the other end instead of just reading something, I think our generation which can take hold and actually make a positive decision about what we do.
MCLEAN: Here's hoping and one number that stood out to me, Max, is that if this school were the entire world, there would be two maybe three people trapped in modern slavery inside of this school. So that's a pretty eye opening statistic that I think struck a nerve with a lot of the students today and something that I hadn't considered before today either.
FOSTER: Yes, we always need to be reminded that we. Scott, thank you very much indeed for joining us from Caversham. Join CNN as we observed My Freedom Day throughout the day. Tell us what freedom means to you. Share your message on social media using the #MyFreedomDay. Thanks for joining me here on CNN "Newsroom", I'm Max Foster in London. "World Sport" with Amanda is up next.