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CNN International: Big Banks Rescue First Republic with $30 Billion Infusion; Communications Aide and Dozens of Mar-a-Lago Staff Subpoenaed; Severe Weather Across the U.S. with Tornado Watches in Several States; Black Sea Clash; Video Shows U.S. Drone Encounter with Russian Jets; Poland To Be First NATO Member to Give Ukraine Fighter Jets; Finnish President Hints Turkey May Ratify Helsinki's NATO Bid. Aired 4-4:30a ET

Aired March 17, 2023 - 04:00   ET



BIANCA NOBILO, CNN ANCHOR: Hello and a warm welcome to our viewers joining us in the United States and all around the world. I'm Bianca Nobilo.

MAX FOSTER, CNN ANCHOR: I'm Max Foster joining you live from London. Just ahead on CNN NEWSROOM.


UNIDENTIFIED FEMALE: 11 banks stepping up to provide a financial lifeline to First Republic bank, the regional U.S. bank facing significant challenges over the last week.

UNIDENTIFIED MALE: This is an area that will see the line of storms move through the overnight hours and into the early morning hours on Friday.

UNIDENTIFIED MALE: We know that the intercept was intentional. We know that the aggressive behavior was intentional. We also know it was very unprofessional and very unsafe.


ANNOUNCER: Live from London, this is CNN NEWSROOM with Max Foster and Bianca Nobilo.

FOSTER: It is Friday, March 17, 9:00 a.m. here in London, 4:00 a.m. in New York where the new trading day gets under way on Wall Street in just a few hours from now. Investors may be wondering if another regional bank needs rescuing.

NOBILO: The outlook is much better now for the First Republic Bank after 11 major banks extended a $30 billion lifeline to keep it afloat. A large percentage of uninsured deposits prompted many customers to pull their money from the regional bank.

FOSTER: First Republic shares soared after the news. Here's where U.S. futures currently. Right now, they are steady if not rising slightly. And markets across Asia Pacific region have spent the day in positive territory. So good news there.

NOBILO: U.S. Treasury Secretary Janet Yellen will be back on Capitol Hill today hoping to ensure lawmakers that there's no crisis with American banks.


JANET YELLEN, U.S. TREASURY SECRETARY: Our banking system is sound and that Americans can feel confident that their deposits will be there when they need them. This week's actions demonstrate our resolute commitment to ensure that our financial system remains strong.


FOSTER: Well Yellen also said that no taxpayer money is being used to reimburse those depositors.

NOBILO: The group coming to the rescue of First Republic includes Wells Fargo, Citigroup, Bank of America and Morgan Stanley. First Republic is the third U.S. regional bank to flirt with failure in recent weeks after trouble as Silicon Valley Bank and Signature Bank.

FOSTER: Shares of first Republic closed up more than 10 percent on Thursday after news of the cash infusion. The Dow gained more than 1 percent, Nasdaq was up 2.5 percent. More now from CNN's Rahel Solomon.


RAHEL SOLOMON, CNN BUSINESS CORRESPONDENT: Two major developments Thursday. On the banking front helping calm the nerves of investors. 11 banks now stepping up to provide a financial lifeline to First Republic Bank. The regional U.S. bank facing significant challenges over the last week similar to those that led to the demise of Silicon Valley Bank and including customers rushing to withdraw their money. The banks now stepping up include JPMorgan Chase, Bank of America, Citigroup and Wells Fargo who announced that they are making a $5 billion unsured deposit into the bank.

After stabilizing markets today news at Credit Suisse will be borrowing Fr.50 billion from the Swiss Central Bank. That sent its shares surging. And this is a major development for the larger economy because Credit Suisse is considered a systemically important bank for the global markets. And that just means that it is too important and too big to fail.

Since SVB's troubles began, markets have been on a wild ride posting volatile swings. So, what's ahead?

Brian Levitt, a global market strategist for Investor -- that's an independent investment management firm -- tells me: We may not be out of the woods with regards to potentially seeing other bank challenges. However, policymakers stand ready to provide support, and the decline in inflation and end of rate hikes should provide some optimism.

Rahel Solomon, CNN, New York.


NOBILO: And we can take a look at the U.S. futures right now. And as you can see things are looking positive. And we're looking at European markets and things are looking positive.

Douglas Diamond is a professor at the University of Chicago's Booth School of Business. He won the Nobel Prize for economics in 2022.

FOSTER: Yes, five months ago Diamond warned that rising interest rates were going to wreak havoc on the bond portfolios of companies and banks. He spoke to CNN's Erin Burnett about his prediction.



DOUGLAS DIAMOND, UNIVERSITY OF CHICAGO'S BOOTH SCHOOL OF BUSINESS: I'm actually quite surprised. I realized that they could wreak havoc, and I assume that the supervisors, the Fed, FDIC, the comptroller of the currency would have carefully look at the balance sheets of all these banks and make sure -- make sure they would have been resilient, could make through the huge interest rate increase.

So, clearly, from the Silicon Valley Bank and First Republic it's pretty much the interest rate increases that caused their problems. So, I'm surprised that we got here and I would have thought that maybe the Fed either would have slowed their interest increases a bit or even better, make sure these banks are stable so they could increase and to fight inflation.


FOSTER: The list of people called to testify in Donald Trump's classified documents investigation just keeps growing. Sources have exclusively told CNN that some two dozen staff members from Mar-a-Lago have been subpoenaed.

NOBILO: And so has a communications aide who appeared before the grand jury on Thursday. CNN's Katelyn Polantz has the details.


KATELYN POLANTZ, CNN SENIOR CRIME AND JUSTICE REPORTER: Another Thursday, another witness being subpoenaed to testify in the classified documents investigation into Donald Trump. We know today that there was a woman who works with Donald Trump quite closely, her name is Margo Martin. She's an aide to him that has remained on his payroll since he left the presidency and she has been in Florida with him quite a lot assisting him with his various needs.

Margo Martin also worked within the White House at the end of the Trump presidency. She was a deputy communications person there. And so, investigators are very likely to want to ask her about what happened in those chaotic last days of the Trump presidency when there were boxes being packed up. When documents were being handled by various people in the White House, how things may have gotten to Mar- a-Lago.

And then also she's one of the few people that stayed with the president, the former president, when he moved to Florida. So she may be asked about all kinds of things that she could have seen or heard at Mar-a-Lago as well.

Now it's not clear at this time what she said in the grand jury. We know that she didn't have a marathon day of testimony. She was only there for a few hours this afternoon, but she does become the latest witness in a long line of witnesses.

My colleagues and I here at CNN, we have also been able to confirm that Margo Martin is one of more than two dozen people who have been sought by prosecutors in this classified documents investigation around Donald Trump that they are trying to get answers from or that they already have gotten answers from. Two dozen people at least, that includes resort staff working at Mar-a-Lago. It includes people who are very close to Donald Trump himself. It is the type of group that scours the grounds.

One source told us today that they are casting an extremely wide net. Anyone and everyone who may have seen something is being pursued by prosecutors in this investigation as it is in this mature phase.

And right now we're also waiting to hear whether we can learn if one of Donald Trump's personal defense attorneys, Evan Corcoran, who has handled communications with the FBI and the National Archives in this investigation, whether he will be forced to answer more questions before the federal grand jury.

Katelyn Polantz, CNN, Washington.


NOBILO: Trump's former personal attorney says New York prosecutors have a mountain of evidence in their investigation into hush money payments made to an adult film star.

FOSTER: Michael Cohen who wrapped up a second day of testimony before a grand, told CNN that despite what the public may think of him personally, he believes the former president should be held accountable.


MICHAEL COHEN, FORMER TRUMP ATTORNEY: I'm prepared to tell you, they have a tremendous amount of information. A lot of people have attacked my credibility. Truth be told, at the end of the day, they can attack me all they want. This case is not going to be predicated on any one individual but rather, it's going to be predicated on the documents, the evidence, the text messages, the emails.

(END VIDEO CLIP) NOBILO: Adult film star Stormy Daniels also met with prosecutors

Wednesday and agreed to testify as a witness if needed. The former president has denied any wrongdoing.

U.S. President Biden will host Ireland's Prime Minister Leo Varadkar at the White House today resuming a long standing St. Patrick's Day tradition.

FOSTER: And the two leaders will participate in a bilateral meeting and festive celebrations. The White House says they'll also discuss Ukraine and reaffirm their support for the Belfast Good Friday Agreement.

NOBILO: And of course Joe Biden has always been keen to play up his Irish roots.

FOSTER: Indeed, that's how he identifies, isn't it.

NOBILO: Over half, I think his genetics is about 62 percent.

FOSTER: And millions of people in the central U.S., meanwhile, facing the threat of severe weather and tornadoes on Thursday. Sirens rang out in parts of Texas as a tornado warning was issued. Tornado watches are in place in eastern Texas and Oklahoma along with southwestern Arkansas and northwestern Louisiana.


NOBILO: At least one potential tornado is spotted near Ft. Worth, Texas. Even the airport was taking precautions. Dallas Love Field briefly moved passengers to the basement during the tornado warning.

Here CNN meteorologist Derek Van Dam with more on Thursday's storms and what to expect from the hours ahead.


DEREK VAN DAM, CNN METEOROLOGIST: They say everything is bigger in Texas and apparently that includes the size of the hail that falls from the sky. Just get a load of this comparison picture. This is coming out of the greater Dallas/Ft. Worth region just west of Ft. Worth in fact. That's a clementine and that is a 3-inch hail stone. You certainly don't want to be under that when it falls from a thunderstorm cloud, right. These are the reports coming in from the National Weather Service. Just a really impressive hailstones that fell from Ft. Worth, Weatherford and Mineral Wells. 2 1/2 to 3 inches, that's the size of the hailstones.

There was also 12 reports of wind damage, 49 reports of hail damage in particular. But the National Weather Service highlights some of the larger hailstones that were reported. Those are 2 inches or larger in diameter and there was actually nine reports of that and you saw a picture of just that a moment ago.

Now there's still the potential of severe weather as this line moves eastward overnight, so heads up Shreveport to Lake Charles. This is an area that we'll see the line of storms move through the overnight hours and into the early morning hours on Friday across the Gold Coast region. Here it is on our forecast radar. There are some showers and thunderstorms kind of picking up some of that moisture, maybe perhaps a bit of circulation from the Gulf of Mexico. But they start to Peter out as we get into the middle of the day on Friday, and really, we just focus our attention on precipitation though along the entire eastern sea board.

Here is our chance of severe weather for Friday, damaging winds, can't rule out a tornado, although the risk is not as high as what we experienced on Thursday. Panama City, Mobile into New Orleans, that 30-A corridor right along the Florida Panhandle has a potential for some strong to severe weather.

Look at the rainfall totals across that region, could see 1 to 3 inches locally and we're anticipating some snowfall across the Great Lakes. In fact, lake enhanced snowfall across the upper peninsula and portions of Minnesota as well as Wisconsin. So look out for 6 to 12 inches of snowfall across that region. Back to you.


NOBILO: Weeks of heavy rain across California have soaked the state and led to severe floods. The state has been hit by 11 back-to-back storms that have caused mudslides, sinkholes and devastating floods. In the city of Porterville sudden flooding took some by surprise.


VICTORIA BODLEY, PORTERVILLE RESIDENT: I've lost my whole livelihood here. My 86-year-old father lives there and he's lost everything. Everything. And what we've been -- I'm 57 and I've been out here since I was seven. So, we've been out here 50 years. And my father and I have lost everything. No warning, no nothing.


FOSTER: The town of Pajaro remains under evacuation orders after heavy flooding. Residents aren't expected to be able to go back to their homes until sometime next week. However, just a year ago the entire state was under a drought -- would you believe. Now California snowpack is the largest it's been in decades and water restrictions in some areas are being lifted.

NOBILO: Still ahead, interest rates are going up again in Europe, why the central bank said it had no choice in its fight against inflation.

FOSTER: Plus, the U.S. releases video which it says proves Russia is lying about the drone encounter over the Black Sea.

NOBILO: And later a potentially critical moment for Finland as Turkey is expected to decide on Helsinki's NATO bid. We'll have a live report from Istanbul.



FOSTER: The U.S. military is assessing its drone operations in the Black Sea region after that encounter with Russian fighter jets earlier this week. Officials tell CNN that Russia has recovered some small debris from the drone which crashed in the waters south of Ukraine.

NOBILO: The U.S. also released video that it says shows the Russians are lying about forcing down the aircraft. CNN's Oren Liebermann has the details.


OREN LIEBERMANN, CNN PENTAGON CORRESPONDENT: High over the Black Sea a U.S. spy drone points its camera backwards towards its own tail. The Russian fighter jet closing fast on the much slower MQ-9 Reaper. The Russian jet then begins dumping fuel as it passes by the drone. The cloud of fuel vapor and crucially the spinning propeller clearly visible in the video after the pass.

The Russian Sukhoi SU-27 fighter then flies by on another pass dumping fuel once again, the jet comes even closer, and the video pixelates when the Russian fighter collides with the U.S. drone. When it comes back online, you can see the propeller with a bent blade damaged in the impact.

In these side by side images, you can see the propeller before and after operating and damaged.

GEN. MARK MILLEY, U.S. JOINT CHIEFS CHAIRMAN: We know that the intercept was intentional. We know that the aggressive behavior was intentional. We also know it was very unprofessional and very unsafe.

The actual contact of the fixed wing Russian fighter with our UAV, the physical contact of those two, not sure yet, that remains to be seen.

LIEBERMANN (voice over): The video undercuts the Russian narrative of what happened during the encounter.

REPORTER: Mr. Ambassador, any comment on the --

LIEBERMANN (voice over): The Pentagon says, it lasted 30 to 40 minutes in total. Russia claimed there was no physical contact.

ANATOLY ANTONOV, RUSSIAN AMBASSADOR TO THE US: There was no collision. You see that. The problem is that we didn't contact to this drone. We didn't start firing. It's very important.

LIEBERMANN (voice over): And CNN has learned the intercept was at the direction of some of the highest levels of the Russian Ministry of Defense according to two U.S. officials familiar with the Intelligence. But the official said there's no indication Russian President Vladimir Putin knew of the planned aggression in advance.

Russia has already reached the crash site, some 80 miles southwest of Crimea, two U.S. officials tell CNN. They've been able to recover some debris from the wreckage, but the US downplayed the significance of the drone remnants saying there's probably nothing left of real value.


LIEBERMANN: Following the collision between the Russian jet and U.S. drone, the military began conducting an assessment of U.S. drone operations over the Black Sea -- that's according to three officials familiar with the matter. It's a look at what's gained, what's risked, the patterns, the routes of these drone operations to find out how to continue and where to continue.

We've also learned that this is not a pause in any way shape or form, in fact at least once since the collision between the Russian jet and the U.S. drone, the U.S. operated the same type of drone, another MQ-9 Reaper in the same area as the previous flight likely to find out and get a better look at Russians trying to move toward the wreckage site and collect some of that debris.

Oren Liebermann, CNN at the Pentagon.


NOBILO: Poland has become the first NATO country to promise fighter jets to Ukraine.

FOSTER: Warsaw says it will supply for Soviet MiG-29 jets to Kyiv in the coming days. The decision could put pressure on other NATO members to follow suit. The Polish president also suggested, as far as his country is considered, those four planes are only a start.


ANDRZEJ DUDA, POLISH PRESIDENT (through translator): Literally within the next few days, we will hand over as far as I can remember four aircraft to Ukraine in full working order. The rest are being prepared, serviced and will be successfully handed over.


NOBILO: Salma joins us now to discuss the story. Salma, the objectives for NATO from the beginning of this conflict seem to have been obviously to support Ukraine on its way to victory, but also to prevent further escalation with Russia. Sending four MiG jets to Ukraine, will that achieve both those objectives?

SALMA ABDELAZIZ, CNN CORRESPONDENT: It's extraordinary how much the calculation has changed. And I'm sure if you were speaking to NATO officials a year ago they would have given you a very different answer than they're going to give you today.

In some ways, yes, this is a huge announcement of course, but it's not surprising that Poland is the first to set this precedent of meeting what is a very long standing request from Kyiv for fighter jets. It is Poland that feels very much on the frontlines of this war, it is Russian missiles that have landed right up near that border. It is millions of Ukrainian refugees that flooded that country that they needed to support. And it is Russian expansion that Warsaw feels is a huge threat to it and to NATO.

So in many ways it is quite natural and logical to see that Poland, Warsaw is the first to make this move, but it is also that question about the calculus. These MiG fighter jets, they are Soviet era jets. So, you're talking about 30 years old. They were towards the end of their life span if you will. They were going to be replaced by NATO anyways for Warsaw. So in some ways Poland is sprucing them up and saying OK we are going to send them as quickly as we can in several days to Ukraine and there might be more coming.

But the question is, is this going to put more pressure on other allies. You can say four jets are going to make a huge difference on the ground. What's going to make the difference is the pressure it's putting towards the West, on other European countries and the United States.

FOSTER: Yes, what is the U.S. saying about that? Because they were even resisting training pilots at one point. Weren't they?

ABDELAZIZ: I mean, President Biden just a few weeks ago had to respond directly and publicly to President Zelenskyy's repeated pleas for American F-16s. And a few weeks ago President Biden himself said we have assessed that this is not needed by Kyiv's military at the time. That assessment remains the same U.S. officials say even with Poland's announcement. I want to read you something that John Kirby, a top U.S. official, said on this after the announcement.

It doesn't change our calculus with respect to F-16s. These are sovereign decisions for any country and we respect those sovereign decisions.

But what we've learned throughout the course of this conflict as you said, Bianca, is what was considered dangerous and escalatory at the beginning of the war is now considered potentially required, and needed to make those battlefield demands, to meet those battlefield demands. So, what you're seeing is from these allies there are no closed doors to any request from President Zelenskyy. There is always going to be a bit of flexibility and they're going to move and shift with the needs of Ukraine's military on those front lines. o

NOBILO: Salma, thank you so much. And we are starting to expect this now, aren't we, that Zelenskyy will ask for something. The answer will initially be no, and we can expect in a month, a few months that that answer will change. And I'm reminded of when we were covering Zelenskyy's visit to Parliament, of course he presented Britain with a fighter pilot helmet and said that he wanted Ukraine to be supplied with the wings for freedom. And this was his very soul --

FOSTER: Just as he received the tanks.

NOBILO: Exactly. Very bold new request, as Salma was just saying, is now being fulfilled by Poland.

FOSTER: Yes. We're learning that Chinese President Xi Jinping will be visiting Russia next week to meet with President Vladimir Putin. The Kremlin issued a statement this morning saying the two will discuss strategic cooperation and sign, quote, a number of important bilateral documents. It comes amid fears that Beijing could be considering providing weapons to Russia for its war in Ukraine. But China insists that it wants to promote peace with the visit and pledges to remain objective and impartial.


NOBILO: North Korea confirmed what was initially reported by South Korean and Japanese officials, its launch of an intercontinental ballistic missile on Thursday morning.

FOSTER: These images released by state media appear to show leader Kim Jong-un overseeing the operation accompanied by the child believed to be his daughter. The ICBM was fired into the waters off the east coast of the Korean Peninsula -- according to officials in South Korea and Japan. It's the fourth such ICBM launch from Pyongyang in less than a year.

Now Finland may soon be one step closer for joining NATO. The Finnish president is in Ankara today by the invitation of Turkey's president. Both leaders have hinted that Turkey will ratify Finland's bid to join NATO.

NOBILO: Lawmakers of all the 30 NATO member countries in the bloc need to approve new members, so Turkey has a veto. And along with Hungary, they've been two of the holdouts of Finland's membership. Turkey has also raised objections to Sweden joining NATO.

FOSTER: CNN's Nada Bashir joins us live from Istanbul. On what grounds is Istanbul shifting position on Finland then?

NADA BASHIR, CNN REPORTER: Well, look, over the last few months, Max, Bianca, we have seen negotiations between Turkey, Sweden and Finland over the concerns that Turkey has raised around accession of Finland and Sweden to the NATO alliance.

And in fact, we heard yesterday from Finland's president visiting the province of Khamaranmaras which was amongst the hardest it by last month's earthquake, the epicenter of last month's earthquake. And according to Turkish state media, the president told reporters during that visit that he believes that Finland has done all that is expected of Finland in order to be able to join the alliance and to gain the ratification of the Turkish government. And crucially took part in those negotiations with the Turkish government.

And we have seen over the last few months in addition to those talks between the three nations, we've seen policy changes in both Helsinki and in Stockholm. So this has been a significant shift and of course the expectation has been for weeks now that Turkey may soon come to a decision to ratify at least Finland's accession to the NATO alliance.

Of course Finland and Sweden previously expressing their intention to join the alliance simultaneously together. Today of course the focus appears to be squarely on Finland's accession. Turkey has of course repeatedly expressed concern and also focused Sweden. And particular on Sweden's role in dealing with groups that Turkey considers to be terrorist organizations, namely Kurdish groups operating in the country. Turkey has accused the Swedish government of taking too lax of an approach when it comes to these groups.

Now it appears that that focus has shifted to Finland. Whether or not this may prove to be a positive point for Sweden, whether Turkey will soften its position on Sweden that remains to be seen.

But as you said there, we've heard from both the Turkish and Finnish president hinting that this may be the result of talks which are set to begin in about three hours in Ankara. Turkeys president saying that Turkey will fulfill its promises, will do as is needed.

And of course we also heard from the Finnish president earlier in the week saying that it was understood that in the event that Turkey would agree to ratify Finland's accession to the NATO alliance. A face-to- face meeting would be set up between the two leaders and that Finland had in turn accepted that invitation.

So, this is certainly the expectation for today's talks. But we are waiting to hear from both leaders. They are set to take part in a joint press conference later this afternoon around 9:45 a.m. Eastern time. So, we're waiting for more details on the next steps when it comes to Finland's accession and whether Turkey has finally changed its position on Finland's accession to NATO.

FOSTER: Nada in Istanbul, thank you.

Still ahead, fighting inflation in the European Union, what a central bankers doing to try to keep prices down.

NOBILO: And more countries around the world are banning TikTok from official government devices. Coming up, the security fears behind those bans.