US stress tests, ECB QE and iron ore

The daily briefing “FirstFT” from the Financial Times.

The biggest US banks would suffer combined losses of almost $500bn in the event of a financial crisis, according to the Federal Reserve. Its stress tests showed that Morgan Stanley, Goldman Sachs and JPMorgan would take some of the biggest hits. (FT)

All 31 banks that participated, however, did clear the minimum hurdle of preserving a capital ratio of at least 5 per cent to risk-weighted assets.

The tests helped bolster market sentiment when they were introduced but there is a sense among many, including Wall Street bankers, that they have outlived their usefulness. Gillian Tett examines the benefits of keeping them. (FT)

In the news

George Osborne’s RBS error The UK chancellor admitted he made a mistake in not radically restructuring the state-controlled Royal Bank of Scotland and says he would like “as quickly as we can to get rid of it” after the general election. (FT)

Russian war games Russia launched large-scale military exercises involving three disputed territories. The drill is likely to heighten concern in Nato about Moscow’s intentions. (FT)

ECB QE starts next week Mario Draghi said the eurozone economy had turned a corner and was on the path to a meaningful recovery. He said the bond-buying programme would support an accelerating recovery in the region.(FT)

Isis on the rampage The militant group set fire to oil wells near the Iraqi city of Tikrit to obstruct an assault by Shia militiamen and Iraqi soldiers. It also attacked the ancientarcheological site of Nimrud, prompting the tourism ministry to call for UN help. (NYT$, Reuters)

Iron ore crunch The price dropped below $60 a tonne for the first time since 2009 after China said it would cut overcapacity in the steel industry and close mills that violate pollution standards. Iron ore is a key steelmaking ingredient and a key profit generator for large mining companies such as Rio Tinto and BHP Billiton. (FT)

It’s a big day for

The US jobs market February non-farm payroll figures are expected to show that the economy added 235,000 jobs last month and the jobless rate moved down to 5.6 per cent – a six-year low. Here is what people will be watching out for in the report. (Bloomberg)

Food for thought

Using Friends to free North Korea Political groups are trying to overthrow the government bysmuggling thousands of USB drives filled with foreign films, music and books into the country. The founder of one group “likens the USB sticks to the red pill from The Matrix: a mind-altering treatment that has the power to shatter a world of illusions”. (Wired)

Astronomical reruns Astronomers using the Hubble Space Telescope have been watching the same star blow up in a supernova explosion over and over again . The light rays from the explosion 9bn years ago have been bent and magnified by the gravity of an intervening cluster of galaxies, creating multiple images. (NYT$)

Marine Le Pen’s vision for France It may be radical but the prospect of her National Front policies becoming reality is no longer pure fantasy. Two months after the Paris terror attacks the far-right party has cemented its standing as the most potent political force in a frightened and frustrated country. She explains to the FT why quitting the euro is the only solution.

Pharma chain reaction AbbVie’s victory in the three-way fight over Pharmacyclics hinged on the opening of three envelopes. Here’s how it happened. (FT)

The Alpha oligarch Russian billionaire Mikhail Fridman has earned a reputation as a fierce corporate fighter building his empire of banking, oil and telecoms businesses. One person says one of these fights “was like in Spinal Tap , the amp that goes to 11.” Now he is taking on the UK government. (FT)

Video of the day

Bank of England fraud investigation The central bank is the focus of a criminal investigation by the Serious Fraud Office. Caroline Binham, the FT’s financial regulation correspondent, explains what the allegations are and what they mean for the BoE.

This article is published in collaboration with The Financial Times. Publication does not imply endorsement of views by the World Economic Forum.

To keep up with the Agenda subscribe to our weekly newsletter.

Author: FirstFT is the Financial Times’ editors curated free daily email of the top global stories from the FT and the best of the rest of the web.

Image: Morning commuters are seen outside the New York Stock Exchange, July 30, 2012. REUTERS/Brendan McDermid.