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Starting today, some U.S. Facebook users will see a new pop-up on the app asking them to fill-out a survey about COVID-19. The survey, from Carnegie Mellon University's Delphi epidemiological research center, is one of many new symptom mapping projects that seek to anticipate where the next wave of the virus will hit as COVID-19 sweeps through populations the world over. Carnegie Mellon's research effort will get a big leg up from Facebook, which may promote similar surveys in different parts of the world if this one goes well.
The Federal Reserve will backstop the Small Business Administration’s emergency loan program, as lenders continue to work through the Paycheck Protection Program.
'I am hoping that civility, humanity, empathy and the goal of improving America will break through. We have the resources to emerge from this crisis as a stronger country,' writes Jamie Dimon in his annual letter.
(Bloomberg) -- More signs emerged that the crisis may be easing in some areas, sending stocks soaring. Italy, France, Germany and Spain reported lower numbers of new cases. In New York, Governor Andrew Cuomo said deaths were showing indications of hitting a plateau. U.K. deaths slowed for a second day, even as they passed the grim milestone of 5,000. Prime Minister Boris Johnson, who was hospitalized Sunday after 10 days in isolation, was moved to an intensive-care unit.JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said he expects a major economic downturn and stress similar to the crisis that almost brought down the U.S. financial system in 2008.Japanese Prime Minister Shinzo Abe said he’ll propose a state of emergency in some prefectures.Key Developments:Global cases top 1.3 million; deaths exceed 73,000: Johns HopkinsU.S. deaths surpass 10,000: Johns HopkinsTrump, Biden spoke by phone about the outbreakMilken Conference postponed a second time to OctoberDenmark, Austria began to relax measuresNew York state lockdown extended to April 29Denmark Joins Austria in Easing Curbs (4:38 p.m. NY)Denmark joined Austria in announcing a gradual relaxation of measures imposed to slow the coronavirus’s spread. The country will press ahead with a “cautious reopening” starting with kindergartens and primary schools on April 15 if the virus numbers remain stable, Prime Minister Mette Frederiksen said. The government will also start talks with business leaders on gradually moving employees back into offices.Austria said earlier that it would take its first steps toward restarting its economy. The two countries were among the first in Europe to shut down public life in response to the outbreak. Wisconsin Governor Delays Tuesday Primary (3:15 p.m. NY)Wisconsin Governor Tony Evers suspended in-person voting just hours before the state’s primary was scheduled to begin, though the order could be subject to a court challenge.Although 15 states and Puerto Rico have already postponed their primaries amid the coronavirus pandemic, Wisconsin’s Republican-controlled legislature has rejected requests by Evers, a Democrat, to delay the state’s in-person voting on Tuesday.Evers’s executive order delays in-person voting until June 9 unless the legislature acts to change it.French Cases Leveling Off (1:50 p.m. NY)France reported a continued leveling-off of cases, signaling that confinement measures are starting to contain the crisis.The country had 3,912 new confirmed cases on Monday, fewer than it reported in five out of the past seven days, according to figures presented by Health Minister Olivier Veran. Deaths from the virus rose by 833 to 8,911, Veran said.“The pressure is still very great on hospitals, enormous -- the confinement has to continue,” Veran said. Still, he said there was some reason for optimism. “We can see that the confinement has a palpable effect in France, we’re starting to feel it.”Read more hereWHO May Announce Move This Week to Accelerate Vaccine (1:30 p.m. NY)A new program to accelerate vaccine development and production may be announced this week, World Health Organization Director-General Tedros Adhanom Ghebreyesus said at a press briefing in Geneva.“The difficulty for governments right now is that lockdowns are proving effective in dampening the flames of the epidemic in those countries, but those lockdowns are also causing great economic hardship,” said Mike Ryan, head of the WHO’s health emergencies program. Still, he said it would probably be “very inadvisable” to lift a lockdown completely all at once.“Once you raise the lockdown, you have to have an alternative method to suppress the virus -- active case finding, testing, isolation, tracking of contacts and strong community education,” Ryan said.N.Y. Deaths May Signal Possible Plateau (1:10 p.m. NY)New York Governor Andrew Cuomo said deaths from the coronavirus pandemic were showing signs of hitting a plateau in the state that has become the epicenter of the U.S. outbreak.The challenge, he cautioned Monday, is to maintain the social distancing that has finally pointed New York toward a possible peak in fatalities. For a second day in a row, the percentage increase in the death toll was less than 10%, a turnabout from numbers about twice as large barely a week ago.The peak of the outbreak could fall on the earlier side of the state’s models showing that it could take anywhere from a week to 30 days for the situation to hit its worse.“I get that people are cooped up,” Cuomo said in his daily press briefing. “But, we get reckless, we change and we’re not compliant on social distancing, you’ll see those numbers go up again.”He doubled the fine for social-distancing violations to $1,000.Italy’s New Virus Infections Lowest in Almost Three Weeks (12:20 p.m. NY)Italy reported the lowest number of new coronavirus infections in nearly three weeks, prompting debate over how and when the country should start emerging from a nationwide lockdown.Civil protection authorities reported 3,599 new cases of the disease on Monday, compared with 4,316 a day earlier. Italy registered 636 new deaths linked to the virus, compared with 525 the day before. That brings the total number of fatalities to 16,523.Italy, once the epicenter for Europe, now has fewer cases than Spain and the U.S.California to Send Ventilators to National Stockpile (12:16 p.m. NY)California, which has yet to see its hospitals overrun by patients, plans to loan 500 state-owned ventilators to the national stockpile.“We’re aggressively preparing for a surge -- but we can’t turn our backs on Americans whose lives depend on having a ventilator now,” Governor Gavin Newsom said in a statement.With the New York area experiencing a supply shortage, other states are stepping in to assist. New York Governor Andrew Cuomo said this weekend that Oregon offered to send 140 ventilators to his state.Merkel Says Too Soon to Ease Lockdown (11:43 a.m. NY)It’s too early for Germany to set a date for easing its lockdown, Chancellor Angela Merkel said, holding her first press conference since returning from 12 days of self-confinement after being exposed to Covid-19.She reiterated her support for the use of the European Stability Mechanism and the European Commission’s proposal for job protection, and said the continent will need a plan for reconstruction after the pandemic subsides.At least three tests showed she was free of the virus.Philippines Likely to Extend Lockdown (11:43 a.m. NY)Philippine President Rodrigo Duterte said he’s inclined to extend a lockdown of more than half the country’s population on its main island until April 30 to further stem the coronavirus outbreak.Duterte, in an address late Monday, also said he’s considering tweaking this year’s 4.1 trillion-peso ($80.8 billion) budget to allocate more funds to virus response, as some 200 billion pesos set aside for cash grants to poor families won’t be enough.Israel Cuts Rates for First Time Since 2015 (9:33 a.m. NY)The Bank of Israel shifted course by cutting interest rates and adding new market-based tools. After playing down the potential for cheaper borrowing costs, the monetary committee on Monday reduced the key rate back down to the all-time low of 0.1% from 0.25%.Hong Kong Extends Ban on Nonresident Entry (9:22 a.m. NY)The city’s airport will also continue to halt all transit services until further notice, according to a government statement. The original rules were set to expire by April 7.Germany Plans ‘Limitless’ Aid Program for Small Companies (8:44 a.m. NY)German Chancellor Angela Merkel’s government announced a new “limitless” aid program for small- and medium-sized companies. The program for loan guarantees is the latest measure introduced by the government, which says Europe’s largest economy might contract even more this year than the 5% drop caused by the global financial crisis in 2008 and 2009.Inovio Begins Phase 1 Human Trial of Vaccine (8:41 a.m. NY)Inovio Pharmaceuticals Inc. began a phase 1 human trial of its Covid-19 vaccine, INO-4800. Animal studies show promising immune responses, the company said.Glaxo to Develop Covid-19 Drugs in $250 Million Partnership (8:14 a.m.)U.K. pharmaceutical giant GlaxoSmithKline Plc is joining dozens of companies in the hunt for therapies to treat the illness caused by the coronavirus, signing a partnership with Vir Biotechnology Inc. and agreeing to invest $250 million in the U.S. company.South Africa’s Economy May Shrink as Much as 4%, Central Bank Says (8:09 a.m. NY)South Africa’s economy could contract by 2% to 4% this year due to the coronavirus pandemic and measures to curb its spread, according to the Reserve Bank. The monetary policy committee projected in March that the economy will contract by 0.2%.U.K. PM Johnson Had ‘Comfortable Night’ and Is in ‘Good Spirits’ (8:07 a.m. NY)Prime Minister Johnson is in “good spirits” after spending a “comfortable” night in St. Thomas’s hospital in central London, his spokesman, James Slack, said on Monday. Johnson went to the hospital on Sunday as a “precaution,” he said.Mass Layoffs Push Canada’s Consumer Confidence to All-Time Low (8:00 a.m. NY)The Bloomberg Nanos Canadian Confidence Index, a composite gauge based on a telephone survey of households, declined sharply for a third week as extensive lock downs triggered mass layoffs. The aggregate index dropped to 42.7 last week, the lowest reading since polling began in 2008.Romania to Extend State of Emergency Until Mid-May (7:53 a.m. NY)Romanian President Klaus Iohannis said that he plans to extend the state of emergency over the crisis by another month because “we haven’t reached the peak of the epidemic, so it’s not time to relax.”Netherlands Has Slowest Death Growth in Week (7:40 a.m. NY)The Netherlands reported 101 new fatalities, the smallest increase since March 30. Total reported cases rose 5% to 18,803. An additional 260 patients were admitted to hospitals, according to the RIVM National Institute for Public Health and the Environment.China to Strengthen Transport Control Measures Along Borders (7:15 a.m. NY)China will tighten quarantines in border areas, following a meeting chaired by Premier Li Keqiang. The number of confirmed coronavirus cases found in people who arrived through a land border has surpassed those that came by air.Dimon Sees ‘Bad Recession’ and Echoes of 2008 Crisis Ahead (7:11 a.m. NY)“At a minimum, we assume that it will include a bad recession combined with some kind of financial stress similar to the global financial crisis of 2008,” the CEO said Monday in his annual letter to shareholders. “Our bank cannot be immune to the effects of this kind of stress.”Nigeria to Borrow $6.9 Billion to Offset Virus Impact on Economy (7:03 a.m. NY)The government plans to raise as much as $6.9 billion from multilateral lenders to offset the impact of the pandemic. The state will seek $3.4 billion from the International Monetary Fund, $2.5 billion from the World Bank and a further $1 billion from the African Development Bank, Finance Minister Zainab Ahmed told reporters Monday.French Firms Have Requested Guarantees for EU20 Billion of Loans (6:58 p.m. NY)French Finance Minister Bruno Le Maire said 100,000 companies requested government loan guarantees for a total of 20 billion euros ($21.6 billion). In addition, more than 500,000 small companies have requested aid from France’s solidarity fund.Redhill Announces First Covid-19 Patient Treated With Opaganib (6:19 a.m. NY)RedHill Biopharma said the first patient with a confirmed coronavirus diagnosis was dosed with opaganib in Israel, and additional patients are expected to be treated in the coming days. Pre-clinical data demonstrated anti-viral effects in other viruses, anti-inflammatory activities and the potential to reduce lung inflammation, the company said.Hungary Announces Virus Stimulus Plan of Up to 20% of GDP (6:17 a.m. NY)Hungary’s government will pay some-private sector wages, offer loan guarantees and boost spending on infrastructure and pensions as part of a major fiscal stimulus plan aimed at averting a recession and mass unemployment as the coronavirus pummels the economy. The package, valued at 18% to 20% of gross domestic product including planned stimulus from the central bank, will also see the 2020 budget deficit rise to 2.7% of GDP from 1%, Prime Minister Viktor Orban said on Monday.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
By John Jannarone The recent quarantine triggered by the coronavirus pandemic has caused a surge in demand for home fitness video-streaming services. Beachbody, which has a track record of over 20 years in the business, has been a leader in the field as media formats evolved from VHS to DVD and now streaming. In an […]
(Bloomberg) -- Facebook Inc. is expanding the user location data that the company offers to researchers and non-profits trying to study the outbreak of the Covid-19 coronavirus.The world’s largest social network shares anonymized, aggregated location information as part of an effort to study disease outbreaks, and more than 150 organizations partner with the company to use that data for research. Facebook is adding new data points for researchers fighting Covid-19, including information about whether people are staying at home, and other material that details “the probability that people in one area will come in contact with people in another,” the company said Monday.At Harvard University, researchers are using the information to measure whether government recommended “social-distancing” measures are actually helping to decrease spread of the virus, which has already infected a confirmed 1.3 million people worldwide.“We are putting in social distancing policies and currently we have no idea what they actually do in terms of subsequent epidemiology of the disease,” said Caroline Buckee, an associate professor of epidemiology at Harvard. “Policy makers want to know things like, ‘Which of these policies actually work? And how long are we going to have to do them?’”Facebook will also put a post atop users’ feeds in the U.S. directing them to a Carnegie Mellon University survey that will ask users, among other things, to self-report possible Covid-19 symptoms. Facebook says the survey is intended to “help health researchers better monitor and forecast the spread of Covid-19.”“[Researchers] won’t share individual survey responses with Facebook, and Facebook won’t share information about who you are with the researchers,” the company said. Only those 18-years-old or older will see the survey prompt.Alphabet Inc.’s Google said last week it would publicly release mobility reports that show anonymized data about where people are traveling to help researchers better track the disease. The company’s Maps app is used by more than 1 billion people worldwide.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- Google has deployed the tracking data it collects from users around the world to assess our movements before and after the World Health Organization declared Covid-19 a global pandemic.Charted below are the location trends for places such as national parks, public beaches, marinas, dog parks, plazas and public gardens. They illustrate which countries reacted most swiftly to the call for social distancing (e.g. Italy) and which lagged behind (e.g. Sweden).— Ben Schott is a Bloomberg Opinion visual columnist. He created the Schott’s Original Miscellany and Schott’s Almanac series, and writes for newspapers and magazines around the world.This column does not necessarily reflect the opinion of Bloomberg LP and its owners.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- When Donald Trump toured an Austin, Texas, factory in November alongside Apple Inc. Chief Executive Officer Tim Cook, the president promoted the event as a celebration of U.S. manufacturing and the return of good-paying jobs to the country.The Apple CEO had successfully made his case to the administration that some components for his company’s products should be excluded from Trump’s China tariffs in exchange for keeping production in the U.S.“Today, I opened a major Apple Manufacturing plant in Texas that will bring high-paying jobs back to America,” Trump tweeted on Nov. 20.But the facility Trump visited is owned and operated by contract manufacturer Flex Ltd. and has been open for 30 years. For decades, it has been producing various devices for many companies including Cisco Systems Inc. Apple has been at the Flex plant since 2013.Computer Parts“He doesn’t have to worry about tariffs,” Trump said of Cook during the Nov. 20 factory tour. “Because when you build in the United States, you don’t have to worry about tariffs.”Two months earlier, the iPhone maker was exempted from tariffs levied on components it imports from China that are used in the Mac Pro desktop put together at the Flex plant. The removal of a 25% surcharge on items like power supplies and printed circuit boards that house the main components of the computer lowered Apple’s costs and, according to Cook, was the reason why the Cupertino, California-based company continued its manufacturing at the Austin factory.But other companies, like San Jose, California-based Cisco, didn’t receive the same treatment. Now jobs related to the manufacture of its products are at risk.In July 2019, Cisco asked the government to exempt the company’s power supplies for U.S.-made servers and switches from the same 25% tariff. Cisco said neither this China-made product nor a comparable one is available in the U.S. or from sources in third countries.Tariff ExemptionsCisco, like many other U.S. companies, was making the same plea to the Trump administration as Apple had: The exemptions were necessary to save good-paying American jobs.After months of being stuck in the process, Cisco was told March 5 that its application for the tariff exemption was denied.“After careful consideration, your request was denied because the request concerns a product strategically important or related to ‘Made in China 2025’ or other Chinese industrial programs,” Joseph Barloon, general counsel for the Office of U.S. Trade Representative, wrote in the denial notice.The applications for an exemption from Apple and Cisco were strikingly similar, particularly when it came to the question of whether their products helped China expand its industrial might.Power Supply“The subject power supplies are not strategically important or related to ‘Made in China 2025’ or any other Chinese industrial policy,” Cisco wrote. “The manufacture of these products in China is unrelated to China’s efforts to develop indigenous, advanced Information and Communications Technology products.”Apple used nearly identical language, saying: “This product is a component of a consumer electronic device. It is not strategically important or related to ‘Made in China 2025’ or other Chinese industrial programs.”Indeed, the power-supply boxes imported from China don’t require cutting-edge technological know-how. They are mostly made up of large spools of copper wire, capacitors and other basic wiring. They haven’t been made in the U.S. for years and don’t require highly paid skilled labor.Apple’s application to get a tariff exclusion was approved in September 2019.Tariff ReliefA USTR spokesman didn’t respond to a request for comment when asked why Apple’s power supply unit doesn’t constitute a product that’s strategically important to China’s industrial programs if an almost identical one from Cisco does.Cisco representatives specifically told USTR and others in the administration while the applications were pending that jobs were at risk, according to sources familiar with the process who asked not to be identified discussing private talks.In a statement after the decision, Cisco said the exemptions it sought “would support the competitiveness of this domestic manufacturing.”The company said it would continue to work with the trade representative’s office for tariff relief on other items, including “for communications equipment that we believe are vital to support the medical response to the coronavirus.”USTR doesn’t make public the reasons why it approves a company’s exemption requests. The business community writ large has complained about the lack of visibility into why certain companies get what appears to be preferential treatment over others.San Jose, California-based Flex, which works for both companies, said in a statement that “securing waivers for tax exemptions is an individualized process based on each customer situation” and declined to identify other customers that use the Austin plant. “Flex’s global footprint provides our customers with options for manufacturing locations, however, we also work closely to help our customers secure tariff exemptions based on their needs.”A group of Texas lawmakers in a letter to trade chief Robert Lighthizer last year underscored that jobs are on the line in Cisco’s case. “Cisco’s operations in Texas directly support more than 1,150 jobs in our state and indirectly support thousands of related jobs in logistics, warehousing, distribution and transportation,” the lawmakers said in their Sept. 13 letter.The decision by the trade office means it’s now a lot cheaper for Cisco to put together its servers, switches and routers in Flex plants in Mexico and export the finished device tariff-free to the U.S. The company declined to say what actions it would take regarding jobs or manufacturing in light of the denial of tariff exemption.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Telecom masts that enable the next generation of wireless communication were set on fire in the U.K. in recent days, apparently by people motivated by a theory that the technology helps spread the coronavirus. Investors are taking note.“Most will laugh at this scientifically unproven claim, but we should not underestimate public worry about potentially adverse health impacts of 5G due to radiation, and thus a possible drag on the 5G progress in democratic countries,” analysts led by Edison Lee at Jefferies Financial Group Inc. said in a note on Sunday.While there’s no evidence to support the idea that 5G airwaves contribute to Covid-19’s spread, the conspiracy is being shared widely on social media. Mast fires were reported in Belfast, Liverpool and Birmingham, according to local media. A video of a telecom tower on fire was circulated on a Birmingham community web page, and Facebook removed a group which encouraged users to share footage of equipment being destroyed, the Guardian reported Friday.At least 20 masts have been attacked in the last few days, according to trade body Mobile U.K.“It’s diverting resources from emergency services dealing with the pandemic, and from the industry ensuring the country remains connected” said Gareth Elliott, head of policy and spokesman for Mobile U.K. “It’s putting people’s lives at risk.”5G is being rolled out by all four U.K. mobile carriers: BT Group Plc, Vodafone Group Plc, Telefonica SA’s O2, and CK Hutchison Holdings Ltd.’s Three U.K.The networks denounced the mast attacks in a joint statement on Sunday. Britain’s Department for Digital, Culture, Media and Sport tweeted that criminal acts inspired by “crackpot conspiracy theories circulating online” will “face the full force of the law.”Counter-terrorism police are investigating, according to Vodafone U.K. Chief Executive Officer Nick Jeffery.The government has set up special units to combat misinformation about the virus, and says it’s pressing social media companies “for further action to stem the spread of falsehoods and rumors which could cost lives.” Media regulator Ofcom last week sanctioned a small radio station for featuring a guest who claimed 5G caused the pandemic. Hollywood actor Woody Harrelson shared the theory on his Instagram account last week.Concerns about links between 5G and cancer were already slowing its roll-out in countries including Switzerland, Bloomberg Businessweek previously reported, despite a lack of scientific support for the claims. Last month the independent global health body, the International Commission on Non-Ionizing Radiation Protection, deemed 5G to be safe.“Public fear, even if not fact-based, can pressure governments to act if it is big enough,” the Jefferies analysts wrote. “With so many unknowns as to the nature of COVID-19, it is not surprising that people might believe any theories, no matter how baseless.”(Updates with number of attacks and wireless industry comment from fourth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- The desire for status and approval is one of the most powerful human motives. It induces us to work hard, dress well and engage in conspicuous consumption, such as Instagramming our fancy vacations. But with the rapid advent of Covid-19, most of those options have been whisked away from us.The plunge in status-seeking behavior is yet another way in which the lockdown is a remarkable and scary social experiment. One possible consequence is that many people won’t work as much, simply because no one is watching very closely and it is harder to get that pat on the shoulder or kind word for extra effort.Worse yet, for many people social approbation compensates for economic hardships, and that salve is now considerably weaker. Time was, even if you were unemployed, you could still walk down the street and command attention for that one stylish item in your wardrobe, or your cool haircut, or your witty repartee. Now there’s no one on the street to impress.Americans are learning just how much we rely on our looks, our charisma and our eloquence for our social affect. As Sonia Gupta asked on Twitter: “Extremely attractive people, I have a genuine question for you, no snark: What’s it like to not be getting the regular daily social attention you might be accustomed to, now that you have to stay inside and isolate from others?”Of course her question applies to more than just “extremely attractive people.” The social affirmation gained from, say, attending regular church meetings is now also much weaker.The collapse in status relations runs deep. We might spend a lot of time in chats and Zoom meetings, but in that medium status is harder to express. The boss who “dominates the room” just can’t project the same charisma from a small boxed image on your laptop screen. Nor can the others tell that everyone is listening attentively to that person, or that the person is tall or witty or well-dressed. This is another way in which Covid-19 is “the great equalizer.”In the short run, we can draw upon our status perceptions from the immediate pre-Covid-19 past. The boss is still the boss, and no one has forgotten who Taylor Swift is. As the lockdown continues, however, we may become increasingly confused in this new status-shorn universe, taking phone calls and meetings with previously unknown people.Even the still-famous may lose some of their luster. LeBron James remains a top NBA star, but he is not out there proving it every week, and so his renown has diminished somewhat — as has that of the NBA.To some extent this status erosion is liberating. It may cause a lot of people to reexamine perennial questions about “what really matters.” There are other positive effects: fewer peer-related reasons to go out and spend money, for instance (do you really need that new jacket, or to try all the hot new restaurants?). That will help make tighter budgets or even unemployment more bearable. Some socially anxious people may even feel they are better off.Yet overall this is a dangerous state of affairs. One risk is that we will elevate the status of performers who remain on television frequently. The White House’s Covid-19 press briefings have boosted the profile of President Donald Trump in part because he is appearing in a relative status vacuum, making him seem more leader-like.If you really are obsessed with continuing the status-seeking game, your best options are probably online. One of the few concrete consolations of this pandemic may be a new wave of creativity on YouTube and social media.More generally and in the longer run, expect the technology sector and the nerds to rise in status. It is their products and services that are commanding our attention and filling our status vacuums. The “nerdy look” is even less of a social handicap than it used to be. To paraphrase that famous saying: On a Zoom call, nobody knows you’re wearing mismatched socks.This column does not necessarily reflect the opinion of Bloomberg LP and its owners.Tyler Cowen is a Bloomberg Opinion columnist. He is a professor of economics at George Mason University and writes for the blog Marginal Revolution. His books include "Big Business: A Love Letter to an American Anti-Hero."For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Wells Fargo & Co. said it can’t fully meet demand from small businesses rushing to participate in a U.S. relief program because of constraints imposed by the Federal Reserve on the bank’s growth.The company has capacity to lend $10 billion to small-business clients under the $349 billion U.S. program, but customers already have expressed more interest than that, Wells Fargo said in a statement late Sunday. The firm will therefore focus on helping nonprofits and businesses with fewer than 50 employees.“While we are actively working to create balance-sheet capacity to lend, we are limited in our ongoing ability to use our strong capital and liquidity position to extend additional credit,” Chief Executive Officer Charlie Scharf said in the statement. “We are committed to helping our customers during these unprecedented and challenging times, but are restricted in our ability to serve as many customers as we would like.”The situation may ratchet up pressure on the Fed to ease the unprecedented asset cap it imposed on the nation’s fourth-largest bank in 2018 in response to mounting scandals at the company. As the coronavirus pandemic began, the firm -- a leading lender to small and midsize U.S. companies, homebuyers and commercial-property investors -- had about $384 billion of additional lending capacity that it can’t unleash because of the cap.As markets swooned and commerce slowed this year, Wells Fargo’s representatives privately broached the idea of at least temporarily lifting the restriction so it could help more customers. The Fed has yet to publicly disclose a decision.People with knowledge of the situation told Bloomberg in late March that the regulator was reluctant to ease or lift the cap because the bank has yet to fully address concerns that prompted the sanction. Scharf, who took over in October, has made progress in enacting reforms, but the company must still prove it’s done enough to prevent abuses of customers, the people said.Friday was the first day that American small businesses hit by the fallout from the coronavirus pandemic could start applying for loans under the new U.S. program. It was part of the $2 trillion stimulus package Congress passed last month aimed at shoring up the economy.Scharf noted in the statement that Wells Fargo already extended almost $70 billion in new and increased commitments and outstanding loans to consumers, small businesses and corporations in the U.S. last month. The firm also said it plans to donate the fees it generates from the small-business stimulus program.Steve Troutner, Wells Fargo’s head of small business, instructed employees to suggest customers apply elsewhere to increase their chances of getting a loan before the stimulus money runs out, according to a memo seen by Bloomberg.“We are hopeful that despite the restrictions of Wells Fargo’s asset cap, our customers will be able to get the help they need, either from us or through other lenders as we all navigate together through this time,” Troutner said in the memo.(Updates with details, contents of internal memo beginning in eighth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.