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After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

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The Biden administration urged regulators on Thursday afternoon to update regulations on regional banks, including some that were loosened during the Trump era.

Why it matters: The White House and others have blamed looser regulations for the collapse of Silicon Valley Bank and Signature Bank earlier this month.

"Unfortunately, Trump Administration regulators weakened many important common-sense requirements and supervision for large regional banks like Silicon Valley Bank and Signature Bank, whose recent failure led to contagion throughout the banking system," a White House official said on a call with reporters Thursday afternoon.

"The goal here is to make sure that this does not happen again," the official said.

State of play: White House officials emphasized that its proposals are "common sense changes" that can be implemented without Congressional action.

The administration is separately pushing for Congress to take action, including calling for clawbacks of executive pay at the now-failed banks.

Details: The Trump administration lightened requirements for banks with assets between $100 billion and $250 billion; the proposed rules would reinstate them. These include:

Requiring banks to hold more high-quality liquid assets and undertake annual stress tests. Under the loosened rules, SVB only had to undergo stress testing every two years. 

Living wills. Regional banks of SVB's size should have to submit plans for how they'd be wound down without stressing the banking system — already required for big banks with more than $250 billion in assets.

The proposals would also strengthen supervisory standards for these banks. Regulators should consider, the administration says, using tools to make sure banks of this size can withstand rising interest rates — a key issue in SVB's downfall. 

Notable: The administration wants to exempt community banks (smaller  local institutions) from having to pay a special FDIC assessment fee in the case of these recent bank failures.  

Yes, but: In testimony before both the House and Senate this week, the Federal Reserve's top banking regulator Michael Barr blamed the failure of SVB on the bank's management, and said the current system of regulations was strong.

Others have blamed weak supervision by the Federal Reserve for the collapse.

White House officials didn't disagree on the call Thursday, but emphasized that the weak supervision mainly took place under the guidance and rule-making of Trump appointees. (Barr wasn't confirmed as vice chair for supervision until July 2022. His position sat vacant for seven months.)

The other side: Banks aren't enthused about the idea of more regulations. 

Greg Baer, CEO of Bank Policy Institute, an industry advocacy group, said in a statement that it "would be unfortunate if the response to bad management and delinquent supervision at SVB were additional regulation on all banks that would impose meaningful costs on the U.S. economy going forward."

"The Fed has barely begun its promised review. This has a strong feeling of ready, fire, aim,” he said.

Between the lines: The proposal makes no mention of lifting or eliminating the FDIC cap on insured deposits from its current level of $250,000 — a hotly debated topic in the wake of the bank collapses.

The FDIC announced earlier this week that it's conducting an analysis of the deposit insurance system, and a report from the agency is expected in May.

White House calls for new rules for regional banks, reversing Trump policies

The administration wants to reverse some Trump-era policies

President  Biden delivers remarks while hosting the virtual Summit for Democracy Virtual Plenary session on March 29, 2023 in Washington, DC.  Photo: Chip Somodevilla/Getty Images

Banking

Communicators

Axios Communicators

A majority of communicators — 63% — say that poor technology is one of their top challenges, according to a recent Gallagher report. 

Yes, but: There continues to be innovation in the communication tech space and these platforms are securing investments even in a downturn.

Driving the news: This week, Axios HQ, the communications software company that spun off of Axios last year, raised $20 million in Series A funding at nearly a $100 million post-money valuation.

Plus, other communication platforms are bringing in capital too. 

The public relations and media monitoring platform, Muck Rack, raised $180 million in late 2022 — one of the largest growth equity investments in PR tech.

Giide — an interactive audio and video content creation platform that's being used to reinvent business content such as presentations, white papers, reports and blogs — raised $2.7 million in seed funding.

Marketing tool Appbrew raised a $2 million seed, and Substack recently announced it will allow newsletter writers to invest through a community fundraising round.

Between the lines: Axios HQ is leaning heavily into artificial intelligence tools to help its clients write clearer, more targeted emails.

The software helps users automatically sharpen their writing with stronger word suggestions. It also offers recommendations for pictures, headlines and summaries that can be used to strengthen their communications, using AI.

What we're watching: As Axios' Kia Kokalitcheva points out, "AI has emerged as a bright spot of excitement for entrepreneurs and investors." 

And many PR and communication platforms have gotten the memo. 

*Disclaimer: Axios HQ was launched in 2021 as a separate tech division within Axios. It split off from Axios in 2022, after Axios Media was acquired by Cox Enterprises for $525 million.

Communication software continues to lure investors

A majority of communicators — 63% — say that poor technology is one of their top challenges

Axios HQ's office in Arlington, Va. Photo: Aha!Concepts

Communications

Axios gathered hundreds of business leaders and policymakers at the second annual What's Next Summit on Wednesday with the goal of cracking the code on the future of business, entertainment and travel. 

Why it matters: There was a lot of chatter around artificial intelligence, the evolution of corporate culture and the return of events — all issues that are spearheaded by or directly impact the work of communicators. 

Catch up quick: Axios editor-in-chief Sara Goo and I moderated a discussion on the future of work.

Key take-aways: Folks are concerned about AI, the return-to-office debate is still brewing and there remains a lack of representation in the workplace.

Zoom in: Most of those in the room were already using AI for image generation, creation of marketing materials, drafting internal messaging and conducting research or summarization. 

This isn't unique to the business leaders in attendance. A recent report found that roughly half of companies are already using AI tools like ChatGPT and 85% plan to within the next 6 months.

Everyone — from GenZ employees to working parents — believe that flexibility should be emphasized within a company's culture.

According to a recent Gallagher survey, much of this responsibility falls on internal comms, with 74% saying that the purpose of internal communication is to support culture and create alignment around an organization’s purpose and strategy.  

Plus, a more flexible work culture will lead to more inclusion and representation across all levels.

Events are also back, and in-person attendees are more engaged than ever.

They expect a personalized experience, which starts with smart outreach,  said Joe Berchtold, president and chief financial officer of Live Nation Entertainment.

"We want to make sure we are communicating with audiences in a meaningful way — not clogging their inboxes and destroying our reputation," said Berchtold. "Now we're able to tailor specific messages to specific groups and specific markets."

Some audiences are still opting to attend events virtually. For that reason, event producers are continuing to offer hybrid, livestreamed options too. 

The bottom line: The post-pandemic impacts on work, and now the hype and interest around AI, are still roiling workplaces — putting a greater onus on communicators to explain new policies and tech.

Communication take-aways from What's Next Summit

There was a lot of chatter around AI, the evolution of corporate culture and the return of events — all issues that are spearheaded by or directly impact the work of communicators.

"Go Deeper" session on the future of work at the Axios What's Next Summit on March 29 in Washington, D.C. Photo: Ron Flores for Axios

At Pfizer, Sally Susman's team has used the power of communications to rebrand the organization, roll out a highly politicized — yet lifesaving vaccine — and now they're embarking on what she calls the "moon shot 2.0" to advance the battle against cancer.

Why it matters: Susman is one of the few communicators to successfully position her team as trusted partners and key strategic assets.

📍How she got here: Susman got her start in politics before jumping into corporate communication roles at American Express, Estée Lauder and now, Pfizer.

🏗 How it's structured: She manages a team of roughly 500 who oversee communications, corporate responsibility, government relations, public affairs and policy, patient advocacy and investor relations.

✈️ Work travel tip: As opposed to bouncing from conference room to conference room, Susman always makes an effort to "see something real."

Most recently, during a stop in Austin, Texas, for SXSW, Susman "explored the University of  Texas campus and pursued barbecue with a vengeance. You know, and I think those kind of things are just really important."

📈Trend watch:  The rise of CEO influence.

"What companies say and do is under enormous scrutiny, but great leaders are gaining some headway in terms of being educators, connectors, and sharing insights that are really important. Throughout COVID, our CEO became the educator in chief and I think that could be a trend."

🔀 Communication shifts: Stakeholder activism and digital media have changed everything, says Susman.

"The digital explosion has given stakeholders global access to information, their own microphones and amplification opportunities. Every day has a different set of challenges and opportunities based on what's happening in the world."

💡Most important comms skills: Intentionality and candor.

"It's something that is so hard to do given the fast-paced nature of our lives, but I was really lucky that I had a watershed moment early in my life when coming out in the early '80s. It confirmed for me that the short-term pain that can sometimes come from having a really candid conversation will reward you with peace and with pride."

"I can't tell a joke to save my life, but it is so effective in lightening the mood in building a feeling of friendship or camaraderie."

Zoom in: "I've struggled to be joyful in the workplace, but I listened to feedback and made it a priority," Susman told Axios. "My team wasn't looking for a stand-up comedian, but someone who can celebrate a great achievement, who sees them and honors their successes, and who laughs at my own mistakes."

📚Media diet: She recently read "Ride of a Lifetime" by Bob Iger and is currently re-watching HBO's "The Sopranos."

📱Influenced by: LinkedIn is Susman's social media platform of choice.

Favorite follows include Girls Who Code founder and author Reshma Saujani and Lisa Sherman, president and CEO of The Ad Council.

🧠Best advice: Work with people you like, go somewhere you can contribute, and find a place where curiosity is encouraged.

Communicator Spotlight: Pfizer chief corporate affairs officer Sally Susman

Susman is one of the few communicators to successfully position her team as trusted partners and key strategic assets.

Photo illustration of Sally Susman, Pfizer's logo, geometric shapes and quotation marks.

Photo illustration: Shoshana Gordon/Axios. Photo: Pfizer

In the months before the crisis triggered by Silicon Valley Bank's failure, lenders were already tightening their standards; nevertheless, the economy remained robust with solid growth and a booming job market — and there may be an explanation why. 

Why it matters: Extra cash sloshing around the economy — a legacy of pandemic-era stimulus and high savings rates — may have helped blunt spillover from tighter lending standards. 

The huge risk is that may not be repeated as the stockpile built up over the pandemic runs down. That sets up the possibility of a dwindling cushion, as banks pull back on lending in the wake of the SVB collapse.

What they're saying: "[E]xcess cash has allowed economic activity to be funded from alternative sources of liquidity over the last couple of years, keeping financial conditions easy for areas which would typically have been constrained by tighter bank lending," TD Securities' Rich Kelly, Priya Misra and James Rossiter wrote in a note.

"As the lagged impact of this savings stockpile wears out, it presents the risk that economic activity may have to adjust more suddenly when the recession hits," they write.

Where it stands: Before the string of bank failures earlier this month, one had to squint to see the impact of a rapid tightening of interest rates, intended to chill the economy. Businesses were still hiring swiftly, consumer demand was still strong and prices continued to rise quickly.

The intrigue: The fallout of the Silicon Valley Bank crisis has tightened financial conditions, though Fed chair Jerome Powell noted earlier this month that traditional indices gauging financial conditions don't take bank lending into account.

That means that overall tightening may be more severe than indices suggest, with possibly a bigger blow to economic activity to follow.

The risks are particularly acute for the commercial real estate sector and smaller businesses, Preston Mui and Alex Williams of Employ America find in a new analysis of historical episodes of credit tightening.

"In short, employment related to commercial real estate and small businesses is already under stress from post-pandemic recovery dynamics," they write. 

"These are also the parts of the labor market that would suffer disproportionately from a pullback in lending from small and regional banks."

The risks of tighter bank lending

The economy's cash cushion is dwindling just as banks pull back on lending post-SVB collapse.

Illustration of a hand squeezing a piggy bank. 

Treasury Secretary Janet Yellen plans to deliver a wide-ranging speech on financial stability Thursday, offering warnings about the risks in the banking system and beyond.

Driving the news: Yellen's speech, as she accepts an award at the National Association of Business Economics named for her fellow one-time Fed chair Paul Volcker, will particularly focus on the risks posed by money market mutual funds, hedge funds and stablecoins, according to a prepared text released by the Treasury department.

The big picture: Yellen argues that "when the financial system works, it can be a powerful engine for economic growth," but that "a fragile financial system can generate deep pain for American households when it fails."

She discusses the risks to the banking system in the aftermath of the Silicon Valley bank Failure, and said it is "important that we reexamine whether our current supervisory and regulatory regimes are adequate for the risks that banks face today."

However, much of her focus was on risks outside the highly regulated banking sector.

State of play: Money market funds act as a close substitute for bank accounts. They accept investors' money and use it to buy Treasury bills and other short-term debt instruments. But they have also proven susceptible to runs in moments of crisis, specifically in September 2008 and March 2020.

"If there is any place where the vulnerabilities of the system to runs and fire sales have been clear-cut, it is money market funds," Yellen will say.

She noted that at banks, there are measures in place — capital and liquidity requirements, federal deposit insurance and the Fed's lender of last resort powers — meant to arrest these runs.

However, "the financial stability risks posed by money market and open-end funds have not been sufficiently addressed," she said, a sign more federal scrutiny is on the way.

Of note: This comes at a particularly significant time, as vast sums of money have been flowing into money market funds as investors seek higher returns than bank deposits.

Yellen to take on financial risks beyond banks

Treasury Secretary Janet Yellen will deliver a wide-ranging speech to NABE, focusing on financial system risks from outside the banking system proper.

Treasury Secretary Janet Yellen on Capitol Hill this week. Photo: Valerie Plesch/Bloomberg via Getty Images

Economy

Media Trends

Axios Media Trends

Men in Blazers, the sports media company born out of the viral soccer podcast with the same name, is bringing on Fabrizio Romano — one of the most popular sportscasters in the world — to host a new podcast for its network. 

Why it matters: The new show is a part of a global expansion of Men in Blazers' media business. 

Men in Blazers, which has roughly a dozen podcasts in its slate, is hoping to double that figure in the next two years, the company's co-founder Roger Bennett told Axios.

Catch up quick: The Men in Blazers podcast launched in the U.S. in 2010. It was started by Bennett and Michael Davies, both British media personalities and soccer fanatics, who saw an opportunity to build a loyal audience of soccer fans in North America.

The podcast was originally distributed through ESPN's network. The pair moved over to NBC Sports in 2014 and launched a TV show called "Men in Blazers."

The company, which has the same name as its flagship podcast, has since expanded to include books, merchandise, live touring and more. 

Driving the news: Beginning this week, Italian soccer journalist Fabrizio Romano will host a new, biweekly podcast called "Here we go" that will be a part of Men in Blazer's broader podcast network, Bennett told Axios. 

With over 40 million social media followers, Romano is considered one of the most popular sports journalists in the world.

He will also team up with Bennett to host a monthly podcast on Amazon, where fans can ask him questions about trades, player insights, and more. 

Between the lines: In addition to hiring Romano, Men in Blazers has also launched a new weekly show called "Vamos" with former American professional soccer player Herc Gomez about Mexican soccer leagues. The show will become biweekly in June.

Be smart: Men in Blazers, which a spokesperson says it is profitable and boasts annual revenues in the "mid to high seven figures," is self-funded and doesn't have any outside investors. 

It makes most of its money from branded content deals with companies including Budweiser, Coca-Cola and Volkswagen, among others, Bennett said. Many of those deals feature product placements within the company's videos.

The company also has a co-production deal with Twitch, the Amazon-owned live-streaming video platform, which gives Men in Blazers ample inventory to sell sponsorships to brands around their live coverage of major soccer events. 

The big picture: Soccer is one of the fastest-growing sports in the U.S. Men in Blazers is trying to capitalize on the momentum behind the U.S. Women's National team and the World Cup coming to North America in 2026. 

"The brands are now pouring in because because they all know that the World Cup in 2026 is going to be the Super Bowl on steroids," Bennett said. 

What to watch: As the media landscape becomes more fragmented, more sports content companies are launching as networks for independent talent, as opposed to giant, consolidated newsrooms.

These networks, such as Men in Blazers, Colin Cowherd's "The Volume," Bill Simmons' "The Ringer" and others, offer platforms for journalists, analysts and sports stars. They typically center around podcasts, but often expand into other genres, such as video, social media and books.

Men in Blazers looks to double podcast slate

Italian soccer journalist Fabrizio Romano is joining its podcast network.

Italian soccer journalist Fabrizio Romano will host a new, biweekly podcast called "Here we go." Photo courtesy: Men in Blazers

Media deals

Reasons workers say they take less PTO than offered

Reproduced from Pew; Chart: Axios Visuals

An outsized share of American workers don't take all their available paid time off, according to a Pew Research Center survey out Wednesday morning.

Why it matters: The results run counter to the idea that people are trying to work less or are less willing to work hard. 

Details: 46% of workers said they take less time off than offered.

Slightly more than half of the group said they didn't need to take more time off.

Meanwhile: Only about half of Americans say they are extremely or very satisfied with their job overall.

Pew asked about all paid time off, that includes not only vacation but sick time and personal days. But in explaining why they didn't use all their time off, none of the answers were about people not getting sick.

When you drill down by income, lower-wage earners were more likely to worry about losing their job if they took too much time away, said Kim Parker, director of social and demographic trends at Pew. 

Higher income workers were more likely to keep working because they worried they'd fall behind.

Of note: About 5% of those surveyed got unlimited vacation time — a benefit that's become controversial over the years for leaving workers feeling insecure about when it's OK to take time away.

The intrigue: In the same Pew survey, 89% of workers said that having paid time off for vacations, doctor's visits, or minor illnesses was extremely or very important to them.

What explains the mismatch? People want to know that they can take time off if they need to, Parker said.

Americans aren't taking all of their paid time off from work

The results run counter to the idea that people are trying to work less.

Employment

Pro Rata

Axios Pro Rata

Venture capital firm EQT Life Sciences yesterday announced the close of its debut LSP Dementia Fund, with €260 million in capital commitments.

Why it matters: This is the first dementia-focused fund ever raised entirely by a European VC firm, although there was an earlier one in 2013 that was partially formed and funded by various governments.

So far it's made five investments and expects to find another eight or nine companies.

By the numbers: Around 54 million people currently suffer from dementia, and one estimate has that awful figure tripling by 2050.

What they're saying: Philip Scheltens, a longtime dementia researcher leading the EQT effort, tells Axios he believes it could outperform other life sciences funds: 

"There are so few investors focused on it, so much to invest in and so much appetite from pharma because there are basically no solutions on the market."

Venture capital fund formed to focus on dementia treatment startups

The global number of dementia patients is expected to triple by 2050.

Illustration of an unraveling yarn in the shape of a brain against a man in silhouette 

Venture capital

The U.S. faces a range of health care flashpoints — unaffordable drugs, opioids, vaping — as we debate whether to adopt universal care. For now, the Affordable Care Act is the law of the land, but Republicans want to issue it a final death blow.

Health

Private equity firm Antin Infrastructure Partners and Sweden's Scandinavian Enviro Systems have formed a joint venture, backed by tire giant Michelin, to launch a large-scale European tire recycling group.

Why it matters: An estimated 1 billion tires reach the end of their lives each year, the vast majority are tossed into landfills.

This includes around 3.5 million tons of tires in Europe alone, 

Details: Antin is expected to hold a 70% stake in the JV. The supply agreement with Michelin, which is being called a "partner" to the JV, includes delivery of recovered carbon black and tire pyrolysis oil.

The bottom line: The group's first full-scale plant will be in Sweden, with the ability to recycle around 40% of that country's annual end-of-life tires, with construction to begin later this year. Once completed, plans are to construct similar facilities throughout Europe.

Michelin backs big tire recycling venture in Europe

1 billion tires reach the end of their lives each year, most of which are dumped in landfills.

 Photo by Martin Schutt/picture alliance via Getty Images.

Private equity

Ominous forecasts about the impact of climate change serve as the backdrop for the world — led by U.S. lawmakers and companies — to debate big action on the problem, which could upend energy systems and our way of life.

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