Axios

That Starbucks' next CEO would be Laxman Narasimhan is no surprise. That he would become CEO on Monday, however, was.

Why it matters: The most immediate impact of the new timeline is that Narasimhan will lead Starbucks' annual shareholder meeting Thursday.

Sunday night bank bailouts on both sides of the Atlantic. Joint announcements by global central banks. Fear and uncertainty sweeping markets.

• Much about the last 10 days has felt like the 2008 global financial crisis. But there are crucial differences that lower the risk this episode will have the same seismic impact on the world economy as 15 years ago.

Why it matters: There's no doubt that the still-unfolding banking panic has raised the odds of a recession. But when you scrutinize the details of what is happening, there is less reason to think this will become a sprawling mega-crisis.

The big picture: It helps to start with an explanation of the root cause of the two crises. Back in 2008, all kinds of highly levered institutions owned complex securities, particularly backed by home mortgages, that turned out to be far less valuable than advertised.

• The 2008 crisis was, in effect, a series of institutions either failing or being bailed out as those losses became apparent.
• This time around, the root problem isn't bad loans. Rather, the Fed's rapid tightening has created paper losses for banks that made loans or bought long-term bonds when rates were much lower.
• That's prompted depositors to pull money out, causing forced selling that turns paper losses into real ones.

Between the lines: Three big differences stand out. First, part of what made the 2008 crisis so tough was many losses took place in lightly regulated or unregulated corners of the financial system.

• Lehman Brothers and Bear Stearns fit those molds. AIG was an insurance company. Regulators had limited visibility into the massive market for asset-backed securities.
• By contrast, the problems this time around have taken place in traditional banks: They have an entire infrastructure of deposit insurance, access to emergency Fed lending, and oversight to reassure the public about their solvency.

Second, the post-crisis reforms contained in the D0dd-Frank Act really did change some things. Most importantly: Capital ratios are higher than they were in 2008, dramatically so at the largest banks, giving them a greater financial cushion.

• And regulators have more authority to resolve even a large failed bank, which should prevent a chaotic situation like what followed the Lehman Brothers bankruptcy.

Third, and perhaps most importantly, the problems now should have less risk of feeding on themselves in the kind of vicious cycle that makes financial crises so damaging.

• If the economy starts to falter because of a credit crunch, the Fed will likely relent and consider cutting rates. That, in turn, would ease the very pressure on bank balance sheets that created the squeeze in the first place.
• By contrast, in 2008, bad mortgages soured credit markets and slowed the economy. Then, weakening growth caused more mortgage defaults. It was a self-accelerating cycle, not a self-correcting one.

Yes, but: Those factors all point toward this causing less economic damage than the 2008 crisis. But there are some other differences between then and now that could cut the other way.

State of play: The U.S. political environment now is rather different than in 2008. Should Congressional action be needed to rescue the financial system, it would likely be hard (read: impossible) for the Biden administration to get the votes.

Flashback: When things got really out of control in the fall of 2008, the Bush administration proposed the $800 billion Troubled Asset Relief Program (TARP). The Democratic House leadership was on board, though the program was deeply unpopular.

• Even with Nancy Pelosi — a famously effective vote-counter and House speaker with a 38-seat majority — there were enough "no" votes that TARP failed on its first vote, sending markets into a tailspin.
• It's hard to imagine a Republican speaker striking a deal with Biden for any rescue plan today, and if he did, it would be even less clear where the votes would come from.

Moreover, the debt ceiling standoff that looks likely to play out this summer would add to complexity and risk in an already-turbulent financial backdrop in unexpected ways.

• And while Dodd-Frank strengthened regulation, it also restricted the Fed's ability to use its emergency lending authority for bailouts, in an effort to prevent anything like the AIG bailout from happening again.

The bottom line: There are important reasons to think that recent banking troubles should be more manageable and less disastrous than the crisis 15 years ago. But the nature of a financial crisis is that events move fast and in non-linear, unpredictable ways.

Amazon on Monday announced plans to lay off another 9,000 employees, on top of the 18,000 layoffs announced in January.

Why it matters: These layoffs come shortly after Facebook announced a second round of cuts, suggesting that other tech giants may still believe they're overstaffed.

Canadian Pacific received U.S. regulatory approval for its $31.1 billion takeover of freight railroad operator Kansas City Southern and said the merger could close on April 14.

Why it matters: This will create the only railway that runs from Canada to Mexico and is the first railroad megamerger in decades.

Deposits were starting to get interesting, even before their sudden flight from Silicon Valley Bank caused the biggest banking panic since 2008-09.

The big picture: The interest rate drought for savers ended in 2022, as the Fed's sharp increase in short-term rates prompted some banks to compete for deposits for the first time in quite a while.

The FDIC guarantees bank deposits of up to $250,000 — a figure most of us weren't thinking all that much about until a week ago, when regulators guaranteed all customer deposits, even those above a quarter-million dollars, at two failed banks.

Why it matters: Now lawmakers, academics, and some in the financial industry are debating whether the FDIC limit, which hasn't been raised since 2008, needs to be increased — or abolished altogether.

Credit Suisse failed this weekend — or at least it would have, were it not too big to fail. Instead, Switzerland's banking regulators cobbled together an emergency solution that leaves nobody happy — but at least prevents a catastrophe for the global financial system.

Why it matters: The 30 G-SIBs — global systemically important banks — are the financial institutions that global regulators have determined are too big to fail. As such, they operate under stricter capital standards and regulatory scrutiny than anybody else. Nevertheless, as Credit Suisse shows, they can still end up being worth a negative amount of money.

UBS yesterday agreed to buy troubled Swiss banking rival Credit Suisse, in a $3.2 billion deal whose speed was unthinkable before Silicon Valley Bank's collapse.

Why it matters: The Swiss government literally changed the law to get the deal done, creating short-term stability for the global banking sector but long-term questions about shareholder rights.

Every 15 years or so, it seems, the U.S. economy rolls into a ditch — and the tech industry pulls something remarkable out of its labs. Here we are again!

State of play: Silicon Valley's favorite bank has failed, while its top firms continue to lay off hordes of workers — but at the same time, industry leaders foresee vast new growth spurred by AI.

The "Ted Lasso" cast will team up with President Biden and first lady Jill Biden to "discuss the importance of mental health" and well-being during a visit to the White House on Monday, the administration announced.

The big picture: President Biden tweeted a reference to the visit in a Sunday post featuring a photo of a sign stating "BELIEVE" above a door leading into the Oval Office — a nod to a poster above the office of coach Ted Lasso, played by Jason Sudeikis, in the hit Apple TV+ show about fictional soccer team AFC Richmond.

New York Community Bancorp is taking over the failed Signature Bank, which was seized by the Federal Deposit Insurance Corporation (FDIC) a week ago.

Why it matters: Signature was one of two bank failures — along with Silicon Valley Bank — that threatened to kick off a broader crisis of confidence in the U.S. banking system. The FDIC has been looking to broker sales of both to stronger financial institutions.