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First Republic getting $30-billion infusion from U.S. banking giants to avert crisis

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A pedestrian walks by a First Republic Bank office on March 16, in San Francisco. A week after Silicon Valley Bank and Signature Bank failed, First Republic Bank is considering a sale following a dramatic drop in its stock price over the past week.Justin Sullivan/Getty Images

The United States’ largest financial institutions have agreed to deposit US$30-billion in First Republic Bank, an unconventional private-sector rescue designed to shore up confidence in the financial system and contain an emerging crisis.

The agreement was brokered by the U.S. government, but is funded by 11 of the country’s largest lenders and investment banks. Bank of America, Citigroup, JP Morgan Chase and Wells Fargo, known as the Big Four U.S. banks, are leading the effort with US$5-billion each.

San Francisco-based First Republic is caught in the fallout from Silicon Valley Bank’s collapse last Friday. Its shares have plummeted as much as 70 per cent over the past week. Much like SVB, First Republic has not reported any sudden loan losses or writedowns. But clients nervous about its stability have been pulling deposits and transferring them to larger institutions, something known as a flight to quality.

With First Republic looking like the next domino to fall in a cascade of bank failures, the larger lenders and investment banks are hoping their deposits will keep it standing, and prevent the situation from spiralling out of control.

It is an unusual approach. The banks appear keen on testing mechanisms that aren’t as extreme as full-blown takeovers.

Opinion: No one will replace Silicon Valley Bank and that’s a big problem for tech

Such takeovers were necessary during the 2008 global financial crisis, and they included the buyouts of investment banks such as Bear Stearns and Merrill Lynch at cut-rate prices. While they helped to stabilize the system, the deals proved to be headaches for their buyers for years after.

Thursday’s private-sector rescue follows central bank intervention on both sides of the Atlantic. The U.S. government has already insured all deposits at SVB and Silvergate Bank, which also failed last week. And the U.S. Federal Reserve has provided fresh liquidity for banks that need to swap bonds for cash at full value. Early Thursday in Switzerland, the Swiss National Bank offered up to 50 billion Swiss francs in liquidity to support the ailing Credit Suisse.

The interventions helped to calm investors Thursday, with major Western stock markets climbing higher. But the situation is very volatile, and banks are likely to keep getting tested. In the U.S., deposits may keep flowing to larger institutions, and it is unclear if the banks involved in First Republic’s rescue package will step up to support a second lender, or a third, should that be required.

In Europe, Credit Suisse, Switzerland’s second-largest bank, has been troubled for years. While it embarked on a restructuring before the latest drama, current financial market conditions will make it harder for it to emerge from the revamp in better shape.

Credit Suisse and First Republic must find ways to shore up investor confidence in a rapidly changing operating environment. Central banks are hiking interest rates – the European Central Bank raised its own by another 50 basis points Thursday – and higher rates change lenders’ operating calculus.

Until very recently, banks had been able to pay depositors next to nothing, then lend the deposits out at much higher rates. This spread, known as the net interest margin, is likely to shrink, especially at troubled lenders. In its funding announcement Thursday, First Republic disclosed that over the past week it had borrowed tens of billions of dollars from the Federal Reserve and the Federal Home Loan Bank at rates ranging from 4.75 per cent to 5.09 per cent.

First Republic currently pays 0.01 per cent in interest annually on its business chequing accounts. The Fed funding is much more expensive. The bank did not disclose what interest rate it will pay on the US$30-billion worth of deposits from rivals.

New data released from the Fed late Thursday showed a major jump in borrowing from the central bank over the past five days, as multiple lenders struggled with fleeing deposits and an uncertain market. The amount borrowed from the Fed through its regular line of credit jumped US$148-billion, to US$153-billion, in one week, and lenders also borrowed $US12-billion under the Fed’s newly created Bank Term Funding Program, which was set up on Sunday.

First Republic’s shares gained 10 per cent Thursday, clawing back some of their losses from the previous week, but then sank over 20 per cent in after-hours trading once details of the private sector rescue package were announced. Despite getting US$30-billion in deposits, First Republic also announced it will suspend its dividend, and it revealed plans to reduce its debt burden. Details on the latter are still to come.

Credit Suisse announced a similar measure early Thursday, saying it has plans to buy back US$2.5-billion worth of U.S.-dollar-denominated debt and another €500-million worth of euro-denominated debt.

The 11 financial institutions contributing uninsured deposits to First Republic include Goldman Sachs Group Inc. and Morgan Stanley, which pitched in US$2.5-billion each. PNC Financial Services Group Inc., Bank of New York Mellon Corp., Truist Financial Corp., U.S. Bancorp and State Street Corp. will each add in US$1-billion.

The banks said their contributions demonstrate their confidence in the U.S. banking system.

“The banking system has strong credit, plenty of liquidity, strong capital and strong profitability. Recent events did nothing to change this,” the group said in a joint statement. “Together, we are deploying our financial strength and liquidity into the larger system, where it is needed the most.”

In a joint statement by the U.S. Department of the Treasury, Federal Reserve Board Chair, Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, the agencies said the industry collaboration demonstrates the financial system’s stability.

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Before Spending Money on a ‘Career Coach,’ Do Yourself a Favour, First Try These Job Search Strategies

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I’m sure you’re aware of the “career coaching” industry—Internet talking heads promising job search and career success—that’s sprung up in recent years. Worth noting: The industry is unregulated. All career coaches are self-proclaimed; no certification or licensing is required.

 

Career coaches have one ultimate goal: To make money off you.

 

Today’s tight job market is making job seekers frustrated and desperate, which career coaches are taking advantage of with their promise of insider knowledge, personalized guidance, and a direct line to the hidden job market. Career coaches market themselves as a shortcut to finding a job, which is appealing when you’ve been unemployed for a while.

 

I’m not averse to hiring a career coach to assist you with your job search; it’s your money. However, keep in mind a career coach…

 

  • is a significant expense, especially if you’re unemployed
  • will only offer common sense advice, nothing that you probably already don’t know or haven’t read or heard before, and
  • doesn’t have insider knowledge

 

…and you’ll still need to do the activities related to job searching.

 

When asked, “Nick, should I hire a career coach?” my answer is an unequivocal “No!” Conducting your job search solo will not only save you money, you’ll also be developing job search skills you’ll need for the next time—chances are there’ll be a next time—you’re job hunting. Before spending thousands of dollars on a career coach, I suggest first trying the following job search strategies.

 

Optimize your online presence.

 

In today’s digital-first job market, employers will check your online digital footprint to evaluate your candidacy; are your interview-worthy? Start with the obvious: Ensure your LinkedIn profile is up-to-date and showcases your quantified accomplishments (a non-quantified statement is an opinion) so employers can see the value you can add. Do yourself a favour, read LinkedIn Mastery: A Comprehensive Guide to Navigating Digital Landscapes Effectively, by Benjamin Stone.

 

Necessary: Stay active on LinkedIn!

 

Your LinkedIn profile can’t be non-active. Maximizing LinkedIn’s potential requires regularly engaging with content, commenting on posts, and contributing original content. Engaging actively and visibly on LinkedIn will lead to opportunities.

 

Next:

 

  • List your social media accounts.
  • Deactivate accounts you are no longer using.
  • Set any accounts you don’t want prospective employers or recruiters to see to private.
  • Ensure your social media profiles (g., display name, handle, headshot, bio) convey the same message about your professional background.

 

Leverage your existing network (a low-hanging fruit few job seekers take advantage of).

 

Everyone has a network of some sort. This means since all job opportunities are attached to people—good news—there are job opportunities all around you. Often, your barista, dentist, hairstylist, neighbours, fellow members of whatever club or association you’re a part of, and, of course, family and friends can help open doors for you.

 

Tell everyone you know that you’re looking for a new job. Always carry extra copies of your resume and hand them out when appropriate. You’ll be surprised at the number of people willing to help you when they understand your situation.

 

Read these two books:

 

 

Ferrazzi outlines practical strategies for building relationships, networking, and leveraging connections

.

 

Hollins provides actionable strategies for achieving your job search and career goals, such as overcoming procrastination and boosting productivity with focus and discipline.

 

Apply less, connect more.

 

Applying online is a waste of time. In previous columns, I’ve noted that applying online is comparable to playing the lottery; you’re hoping a stranger hires you. Numerous studies have shown that most jobs aren’t advertised; they’re filled through connections and referrals.

 

Job searching today is a long game; you need to be patient. Today, you need to network your way into a company and identify opportunities, which no career coach can do for you. It’s unlikely the resume you submit online will be reviewed. Paying to have your resume redesigned won’t get it more views; getting it in front of people who can hire you will.

 

Take what you will from the following.

 

A few months back, a job seeker asked me, “I’ve been working as a help desk agent at a healthcare software company for five years. I want to become a Director of IT at a large multinational company. What should I do?”

 

How should I know? I’m not a Director of IT. Why not ask the Director of IT at a large multinational company?

 

Take advantage of the fact that people love talking about themselves. Dinner with someone who holds the position you aspire to is a better investment than hiring a career coach who lacks your dinner partner’s real-world experience. I charted my career path by observing those ahead of me and seeking their advice. Talking to people who are where you want to be will benefit your job search and help you achieve your career aspirations.

 

By shifting your mindset, optimizing your online presence, leveraging your existing network, staying engaged on LinkedIn, and connecting with the right people, you won’t need to hire a costly career coach, and you’ll develop skills you can use throughout your career.

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Nick Kossovan, a well-seasoned veteran of the corporate landscape, offers “unsweetened” job search advice. You can send Nick your questions to artoffindingwork@gmail.com.

 

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How to Start a Business?

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Market Research

You have to conduct research on the whole market and find out the gap. This gap will be your opportunity. Moreover, this research will give you an idea of how different businesses work and how they fulfill the needs of the people. Businesses work due to the demand for their products and services in the market. So, through this research, you have to collect information about the following things:

 

 

You can use surveys, questionnaires, and focus group interviews to extract information on the above factors.

 

Business Plan

Develop a complete roadmap for your business. This plan should cover all the details from the manufacturing to the sales and pricing.

 

It has a summary of the complete execution of the company, including the mission of the company, product or service of the company, competitors of the company, management, and employees of the company, as well as the location of the company. This plan should be in such a way that everyone can easily understand.

Investment For Business

If you are not self-funded, then you will need investment for your business. There are several ways to find investment, such as the following:

 

●     Venture capital

You can offer the shares of the company in exchange for shares of the company. In the beginning, you have to offer the company ownership to finance your project.

●     Crowdfunding

In this type of investment, a large number of people give funds to the startup. They are not given shares and profits from the company. However, the company provides them with gifts in the future for their finances.

●     Loans

There are many government and private companies that are offering loans for small and large companies. For this loan, you have to prepare a business plan, expense sheet, and expected profits. You can find several companies that are providing loans for businesses, such as Lendforall, Baker Tilly, West Bank Union, etc.

Structure of Business

Before starting a business, you have to select its structure. Traditionally, you will find the following structures of business:

  • Sole proprietorship
  • Partnership
  • Limited Liability Company
  • Corporation

 

To select any structure, you must analyze and compare your business with others. You will get an idea of which structure will be the most suitable for your business.

Business Tools

Nowadays, there are several business tools available in the market. These tools have made business management easy to a great extent. However, you have to invest in these tools to compete the market. Here are some important tools for business:

 

 

Many other tools are available in the market that are used for different management purposes.

Registration of Business

You have to register your business with the federal government. Moreover, you should apply for the insurance for your business. There are many other documents, such as tax IDs from federal and state governments, licenses and permits for your business, and applying for a business bank account.

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Show Employers You Can Hit the Ground Running

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Employers are increasingly stating: “We want someone who can hit the ground running.”

Essentially, the message is, “Don’t expect us to explain the basics. We expect you to know your sh*t.” Employers understand you’ll need time to learn their business, applications, software, infrastructure, etc. However, they expect that you’re proficient in Microsoft Office Suite software (Word, Excel, PowerPoint), understand file management (creating, saving, and organizing files), and know how to troubleshoot common computer problems, and won’t be learning these basic computer skills as part of your learning curve on their dime.

Employers aren’t in the business of training people. You’re responsible for your career; therefore, you’re responsible for acquiring the skillset you need.

For an employee’s compensation to be justified, an ROI (return on investment) is required. When referring to employment, ROI refers to the value an employee brings to the company relative to their compensation. Employers pay their employees, and employees work for their wages. Employee work value is created when their work directly or indirectly results in profitably selling the company’s goods and services. Your best chance of job security (no guarantee) is to be an employee who undeniably contributes measurable value to your employer’s profitability.

(Employee’s measurable value to the company) – (Employer’s investment in compensation) = (ROI)

Understandably, employers are looking for candidates who can make an immediate impact, individuals who can jump right in, learn and adapt quickly, and start delivering results as soon as possible. Hence, you want to distinguish yourself as being capable and willing to “hit the ground running.”

Here are some tips to help you present yourself as a fast-starting, high-potential hire:

Emphasize relevant experience

Presenting irrelevant information will be perceived as lacking the ability to communicate succinctly, a highly valued skill in the business world. Only share experiences and quantified results (key), results that are pertinent to the position you’re applying for.

When crafting your resume and cover letter, identify the skills, knowledge, and previous responsibilities/quantified results that align with the job you’re aiming for. By demonstrating that you’ve “been there, done that” and brought measurable value to previous employers in a similar scenario, employers will feel confident that you can immediately deliver value.

Showcase transferable skills

Consider the universal soft skills that employers universally value.

  • Analytical
  • Communication
  • Interpersonal
  • Problem-solving
  • Project management
  • Time management

Tell STAR (Situation, Task, Action, Result) stories—describing a specific situation, the task you were assigned, the actions you took, and the results of your actions—that showcase your soft skills and explain how you can leverage them to succeed in the role you’re applying for. This’ll assure your interviewer you have the fundamental skills to achieve successful outcomes.

“While working at Norback, Jenkins, & St. Clair, I led a team of five architects to redesign a historic downtown Winnipeg landmark according to strict deadlines and complex stakeholder demands. I conducted Monday morning team meetings and used Slack to provide tailored updates to keep the team aligned. As a result of my communication skills, the project was completed on time and under the $7.5 million dollars budget.”

Discuss onboarding insights

A great way to position yourself as someone eager to hit the ground running is to show that you’ve considered what it’ll take to start delivering value.

“Based on my understanding of the typical onboarding timeline for this type of position, I anticipate completing all training and ramp-up activities within my first two weeks, enabling me to begin tackling projects by my first quarter.”

Assuming you’ve researched the company and studied current industry trends, which you should have done, mention the extra steps you’ve taken to prepare for the role. This’ll show your willingness to learn and will require minimal handholding.

Emphasize quick adaptability

Employers value the ability to adapt quickly to new situations and challenges. During your interviews, share examples of your flexibility and agility.

At some point in your career, you’ve likely had to learn something new (e.g., software, operating system) on the fly. Also likely, you’ve had to navigate a major change or disruption. Using STAR stories, explain how you approached these scenarios, your strategies, and the positive outcomes.

By showing resilience, resourcefulness, and adaptability, you demonstrate that you can thrive in ambiguous or rapidly evolving environments.

Propose a transition plan.

Presenting a transition plan is a strategy that wows employers, primarily because it is rare for a candidate to do this. This shows you’re ready to take ownership of your onboarding and deliver results.

Include specifics like:

  • Milestones you aim to accomplish in your first 30, 60, and 90 days.
  • Training activities or learning opportunities you’ll pursue.
  • Initial projects or tasks you’d tackle to demonstrate your capabilities.
  • Ways you’ll quickly build relationships with your new colleagues.

Showing this level of forethought and initiative shows you’re a strategic thinker, able to organize your thoughts, and, most importantly, eager to get started.

By touting your relevant experience, showcasing your transferable skills, discussing your onboarding insights, emphasizing your quick adaptability, and proposing a detailed transition plan, you’ll position yourself as a self-driven professional capable of driving results from the start, differentiating you from your competition.

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Nick Kossovan, a well-seasoned veteran of the corporate landscape, offers “unsweetened” job search advice. You can send Nick your questions to artoffindingwork@gmail.com.

 

 

 

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