Grilled in Hearing, Robinhood Head Apologizes for Limiting GameStop Trades

Here’s what you need to know: Video transcript Back bars 0:00/2:35 -0:00 transcript Robinhood C.E.O. Faces Scrutiny From House Lawmakers Vlad Tenev, the chief executive of Robinhood, apologized for temporarily limiting trading of GameStop after Jan. 28, but said his company did nothing wrong at a House Financial Services Committee hearing on GameStop. “Jan. 28 proved to be a completely unprecedented event — the spike in trading activity and volatility meant that Robinhood securities, our clearing broker, had to hold the line and post additional firm capital as collateral to support our clearinghouse deposit demands. To put it in perspective, on Jan. 28, our daily deposit requirement was 10 times more than on Jan. 25. As a result, Robinhood securities, along with many other firms, imposed temporary trading restrictions on certain securities. Robinhood securities put the restrictions in place in an effort to meet increased regulatory deposit requirements, not to help hedge funds. We don’t answer to hedge funds. We serve the millions of small investors who use our platform every day to invest. At the end of the day, what happened is unacceptable to us — to our customers, I’m sorry, and I apologize. Please know that we are doing everything we can to make sure this won’t happen again.” “You explain that Robinhood restricted transactions in certain securities to meet demands coming from your clearinghouse. And yet on Jan. 28, you represented to the media that there was no liquidity problem. Isn’t it true that being concerned about having enough capital to meet deposit requirements, isn’t that a liquidity problem — could you just answer yes or no?” “Chairwoman Waters, I appreciate the opportunity to address that.” “Just yes or no.” “We always felt comfortable with our liquidity, and the additional capital that Robinhood raises.” “Please answer yes or no.” “We always felt —” “I don’t have time. I just need a yes or no answer.” “I stand by my statement. The additional capital we raised wasn’t to meet capital requirements or deposits —” “Will the gentleman — I’m reclaiming my time, this liquidity problem had real consequences for your customers.” “One in 3.5 million event, basically is unmodelable. That said, we can learn from it. And in this particular case, our risk management processes work really to keep us in compliance with all of our deposit requirements and collateral requirements.” “Mr. Tenev, I realize that you are doing a full review of your practices as such. I encourage you to do that. And certainly communication with your investors is going to be key to that because you didn’t communicate with them early on.” Vlad Tenev, the chief executive of Robinhood, apologized for temporarily limiting trading of GameStop after Jan. 28, but said his company did nothing wrong at a House Financial Services Committee hearing on GameStop.CreditCredit...Financial Services CommitteeThe chief executive of the online brokerage firm Robinhood, Vlad Tenev, faced anger from members of Congress from the opening moments of the House Financial Services Committee hearing on GameStop. As Mr. Tenev began introducing himself and his company, the chairwoman of the panel, Representative Maxine Waters, told him to get to the point and “talk directly to what happened on Jan. 28.” Mr. Tenev apologized to his users for stopping certain customer trading during the peak of the frenzy. But Mr. Tenev was insistent that Robinhood did nothing wrong and did not privilege powerful business partners at the expense of small investors, as some critics have suggested. “We don’t answer to hedge funds,” Mr. Tenev said. “We serve the millions of small investors who use our platform every day to invest.” Mr. Tenev said it was forced to stop certain trading because its business partners, the clearing houses that perform trades on Robinhood’s behalf, significantly increased the requirements for the amount of money Robinhood had to park with them as collateral. But throughout the hearing, Mr. Tenev’s answers failed to satisfy the members of the committee. When Mr. Tenev said Robinhood is “working” for customers because they had collectively earned $35 billion in realized and unrealized gains on top of the money they had deposited, one congressman pressed Mr. Tenev to justify his claim. Representative Jim Himes, a Democrat from Connecticut, asked Mr. Tenev to provide more details on those gains — where they came from and how they were spread out among customers. Mr. Himes asked Mr. Tenev how those returns compare to the returns customers would have seen if they had simply put their money into a diversified index fund. But Mr. Tenev declined to answer. At first he said he didn’t have that information but later seemed to hedge by stating that the firm’s “asset under management number is not one that Robinhood has publicly shared.” Republicans at the hearing were more sympathetic to Mr. Tenev, but they too bashed Robinhoo

Grilled in Hearing, Robinhood Head Apologizes for Limiting GameStop Trades
Here’s what you need to know: Video transcript Back bars 0:00/2:35 -0:00 transcript Robinhood C.E.O. Faces Scrutiny From House Lawmakers Vlad Tenev, the chief executive of Robinhood, apologized for temporarily limiting trading of GameStop after Jan. 28, but said his company did nothing wrong at a House Financial Services Committee hearing on GameStop. “Jan. 28 proved to be a completely unprecedented event — the spike in trading activity and volatility meant that Robinhood securities, our clearing broker, had to hold the line and post additional firm capital as collateral to support our clearinghouse deposit demands. To put it in perspective, on Jan. 28, our daily deposit requirement was 10 times more than on Jan. 25. As a result, Robinhood securities, along with many other firms, imposed temporary trading restrictions on certain securities. Robinhood securities put the restrictions in place in an effort to meet increased regulatory deposit requirements, not to help hedge funds. We don’t answer to hedge funds. We serve the millions of small investors who use our platform every day to invest. At the end of the day, what happened is unacceptable to us — to our customers, I’m sorry, and I apologize. Please know that we are doing everything we can to make sure this won’t happen again.” “You explain that Robinhood restricted transactions in certain securities to meet demands coming from your clearinghouse. And yet on Jan. 28, you represented to the media that there was no liquidity problem. Isn’t it true that being concerned about having enough capital to meet deposit requirements, isn’t that a liquidity problem — could you just answer yes or no?” “Chairwoman Waters, I appreciate the opportunity to address that.” “Just yes or no.” “We always felt comfortable with our liquidity, and the additional capital that Robinhood raises.” “Please answer yes or no.” “We always felt —” “I don’t have time. I just need a yes or no answer.” “I stand by my statement. The additional capital we raised wasn’t to meet capital requirements or deposits —” “Will the gentleman — I’m reclaiming my time, this liquidity problem had real consequences for your customers.” “One in 3.5 million event, basically is unmodelable. That said, we can learn from it. And in this particular case, our risk management processes work really to keep us in compliance with all of our deposit requirements and collateral requirements.” “Mr. Tenev, I realize that you are doing a full review of your practices as such. I encourage you to do that. And certainly communication with your investors is going to be key to that because you didn’t communicate with them early on.” Vlad Tenev, the chief executive of Robinhood, apologized for temporarily limiting trading of GameStop after Jan. 28, but said his company did nothing wrong at a House Financial Services Committee hearing on GameStop.CreditCredit...Financial Services CommitteeThe chief executive of the online brokerage firm Robinhood, Vlad Tenev, faced anger from members of Congress from the opening moments of the House Financial Services Committee hearing on GameStop. As Mr. Tenev began introducing himself and his company, the chairwoman of the panel, Representative Maxine Waters, told him to get to the point and “talk directly to what happened on Jan. 28.” Mr. Tenev apologized to his users for stopping certain customer trading during the peak of the frenzy. But Mr. Tenev was insistent that Robinhood did nothing wrong and did not privilege powerful business partners at the expense of small investors, as some critics have suggested. “We don’t answer to hedge funds,” Mr. Tenev said. “We serve the millions of small investors who use our platform every day to invest.” Mr. Tenev said it was forced to stop certain trading because its business partners, the clearing houses that perform trades on Robinhood’s behalf, significantly increased the requirements for the amount of money Robinhood had to park with them as collateral. But throughout the hearing, Mr. Tenev’s answers failed to satisfy the members of the committee. When Mr. Tenev said Robinhood is “working” for customers because they had collectively earned $35 billion in realized and unrealized gains on top of the money they had deposited, one congressman pressed Mr. Tenev to justify his claim. Representative Jim Himes, a Democrat from Connecticut, asked Mr. Tenev to provide more details on those gains — where they came from and how they were spread out among customers. Mr. Himes asked Mr. Tenev how those returns compare to the returns customers would have seen if they had simply put their money into a diversified index fund. But Mr. Tenev declined to answer. At first he said he didn’t have that information but later seemed to hedge by stating that the firm’s “asset under management number is not one that Robinhood has publicly shared.” Republicans at the hearing were more sympathetic to Mr. Tenev, but they too bashed Robinhood’s communications with their customers last month. “You didn’t communicate with them early on,” said Representative Ann Wagner, Republican of Missouri. Representative Carolyn Maloney, Democrat of New York, channeled the anger of Robinhood users even more directly. “You reserve the right make up the rules as you go along,” she said to Mr. Tenev about Robinhood’s decision to abruptly limit trading. “I don’t blame customers for feeling treated unfairly.” Video transcript Back bars 0:00/1:42 -0:00 transcript ‘Roaring Kitty’ Says He Will Continue to Invest in GameStop Keith Gill, known on YouTube as Roaring Kitty and on Reddit’s Wall Street Bets forum as D.F.V., joked that he was “not a cat” and defended his GameStop investment during a House Financial Services Committee hearing. It is true that my investment in that company multiplied in value many times. For that, I feel enormously fortunate. I also believe the current price of the shares demonstrates that I’ve been right about the company. A few things I am not — I’m not a cat. I am not an institutional investor, nor am I a hedge fund. I do not have clients. And I do not provide personalized investment advice for fees or commissions. I’m just an individual whose investment in GameStop and posts on social media were based upon my own research and analysis. Early June of 2019, the price of GameStop stock declined below what I thought was its fair value. I invested in GameStop in 2019 and 2020 because as I studied the company, I became more and more confident in my analysis. When I wrote it and spoke about GameStop on social media with other individual investors, our conversations were no different from people in a bar or on a golf course or at home talking or arguing about a stock. Hedge funds and other Wall Street firms have teams of analysts working together to compile research and analyze shares of companies. Individual investors do not have those resources. Social media platforms like Reddit, YouTube and Twitter are leveling the playing field. As for what happened in January, others will have to explain it. It’s alarming how little we know about the inner-workings of the market. And I am thankful that this committee is examining what happened. I also want to say that I support retail investors’ right to invest in what they want when they want, to support the right of individuals to send a message based on how they invest. As for me, I like the stock. Keith Gill, known on YouTube as Roaring Kitty and on Reddit’s Wall Street Bets forum as D.F.V., joked that he was “not a cat” and defended his GameStop investment during a House Financial Services Committee hearing.CreditCredit...House Financial Services Committee, via Associated PressWhile some individual traders bought GameStop shares last month to stick it to Wall Street hedge funds, one of the most influential members of the Reddit community credited with supercharging interest in the stock stressed at the hearing that his investment was driven by analysis of the fundamental prospects for the company. And Keith Gill — known on YouTube as Roaring Kitty and by a user name with the initials D.F.V. on Reddit’s Wall Street Bets forum — said he’d still buy GameStop at its current price. Mr. Gill, who had bought long-shot options bets that GameStop’s shares would rise, testified that his interest in the company was based on his belief that the market was underestimating the brick-and-mortar retailer’s value as well as its potential to pivot to a digital business model. His testimony included winking references — such as dangling what appeared to be his oft-worn red headband off a picture of a kitten visible over his shoulder — to internet meme culture. “I am not a cat. I am not an institutional investor. Nor am I a hedge fund,” he said, in what appeared to be a reference to his YouTube persona Roaring Kitty as well as the recent viral phenomenon known as “Lawyer Cat.” The new addition to Keith Gill's Kitty Corner since he was recording his live stream's on GameStop: a bent up poster of a stretched out kitty with the words "hang in there" and a red ribbon on the corner." pic.twitter.com/jOIKPqpdhC — Nathaniel Popper (@nathanielpopper) February 18, 2021 Mr. Gill didn’t attempt to explain why GameStop surged more than 600 percent in a matter of days to a peak $483 a share on Jan. 28. But he said he continues to be invested in the company. Even though the shares have traded around $50 a share this week, they remain up more than 150 percent this year — which Mr. Gill took as vindication. “The current price of the shares demonstrates that I have been right about the company,” Mr. Gill said. Video On Thursday, the House Financial Services Committee is holding a virtual hearing on GameStop and Reddit. Witnesses will include the chief executive and co-founder of Reddit.CreditCredit...Anna Moneymaker for The New York TimesKeith Gill, a young day trader who went by the screen name Roaring Kitty and found himself at the center of the GameStop stock trading frenzy, and four others are part of a panel called to testify in front of the House Committee on Financial Services as it examines the circumstances around the wild spikes in prices of GameStop and other so-called meme stocks. Mr. Gill is the only non-chief executive on the panel. The other witnesses are Vlad Tenev, the chief executive of the online brokerage firm Robinhood; Kenneth C. Griffin, the chief executive of the trading firm Citadel; Gabe Plotkin, the chief executive of the hedge fund Melvin Capital Management; and Steve Huffman, the chief executive of the social media company Reddit. Mr. Gill traded his usual red headband and “LolCat” T-shirt for a suit and tie as he appeared for the hearing on Thursday morning, prepared to testify. But he did not shed his wacky, internet-friendly image entirely. Tacked up on the wall behind him was a photo of a kitten dangling from a thread, stamped with a pithy caption: “Hang in there.” In his opening statement, he called himself “enormously fortunate” to have made so much money on GameStop, and said he believed in the value of GameStop as reflected by its current price. “I am not a cat. I am not an institutional investor. Nor am I a hedge fund,” Mr. Gill said. “I do not have clients, and I do not provide personalized investment advice for fees or commissions. I’m just an individual whose investment in GameStop and posts on social media were based upon my own research and analysis.” Other key statements from the hearing: “Zero pressure from anyone,” Mr. Tenev of Robinhood said when asked whether anybody on the panel had pressured Robinhood to restrict buying of GameStop. “It was a collateral depository requirement decision made by a Robinhood securities president.” “We’ve created a world where it’s easier to go buy a lottery ticket than it is to invest in the next Google,” said Representative Patrick McHenry of North Carolina. “We should live in the world where the construction worker or Uber driver trading on Robinhood has the same access to equity shares in Robinhood itself as the white collar employees who work there.” “I will stress that, first and foremost, Wall Street Bets is a real community,” Mr. Huffman of Reddit said. “The self-deprecating jokes, the memes, the crass-at-times language all reflect this. If you spend any time on Wall Street bets you’ll find a significant depth to this community exhibited by the affection its members show one another.” “We had no role in Robinhood’s decision to limit trading in GameStop or any of the other meme stocks,” said Mr. Griffin of Citadel. “I first learned about Robinhood’s trading restrictions only after they were publicly announced.” Sophia June, Mike Isaac and Nathaniel Popper contributed reporting. Representative Maxine Waters said many of the investors buying GameStop shares appeared to be trying to “beat Wall Street at its own game.”Credit...C-Span A congressional hearing over the sudden rise and fall of GameStop’s shares last month opened with lawmakers from both parties raising concerns about how the frenzy had exposed the ways in which the financial system benefits big players rather than individual investors. “Many Americans feel that the system is stacked against them and no matter what, Wall Street always wins,” said Representative Maxine Waters, Democrat of California and chairwoman of the committee. She noted that many of the investors buying GameStop shares appeared to be trying to “beat Wall Street at its own game.” With many retail investors sustaining losses, she said, “there are many whose beliefs that the system is rigged against them have been reinforced.” The committee’s top Republican, Representative Patrick McHenry of North Carolina, shared similar concerns, saying unequal access to certain types of investments had contributed to financial inequality. He said that new regulations could further shut out small investors, saying that “Americans are far more sophisticated, informed and capable than folks in D.C. give them credit for.” “We’ve created a world where it’s easier to go buy a lottery ticket than it is to invest in the next Google,” he said. “Is it any wonder why the unhealthy dynamics of GameStop happened?” Gabriel Plotkin, the chief executive of Melvin Capital Management, defended is firm’s market bet against GameStop.Credit...Financial Services Committee In opening remarks during a contentious Congressional hearing on Thursday afternoon, Gabe Plotkin, the founder and chief executive of the hedge fund Melvin Capital, tried to clear the air over his firm’s market bet against GameStop. Going into 2021, the fund had “been short GameStop since Melvin’s inception six years earlier,” Mr. Plotkin told the House Financial Services Committee in a virtual hearing on the wild trading in GameStop shares that disrupted stock markets late in January. The short position — a market term for betting that a stock price will fall — was used because Melvin believed GameStop’s business model of selling games in bricks-and-mortar stores was “being overtaken by digital downloads.” Though that overall trend had been ongoing in recent years, said Mr. Plotkin, it “generally accelerated in 2020.” Melvin, which managed more than $12 billion at the beginning of this year, lost more than $4 billion on GameStop and other positions in January, as its performance fell 53 percent amid a 1,700 percent run-up in shares of the video game retailer. That rally was spurred in part by small investors who were hoping to “squeeze,” or force, Melvin and other investors who were short the stock to close out those positions as its price rose. On Jan. 25, in the midst of that rally, Melvin accepted an investment of $2.75 billion from Citadel and Point72, two other hedge funds, which was widely regarded as an emergency cash infusion. Mr. Plotkin said it was not. “Melvin Capital was not bailed out,” Mr. Plotkin said. Instead, he said, Melvin was approached by Citadel — not the other way around — as Citadel sought to make a quick and easy investment of $2 billion in cash that it expected to generate longer-term value. “It was an opportunity for Citadel to buy low and earn returns for its investors if and when our funds value went up,” Mr. Plotkin said. In an interview Wednesday, Kenneth C. Griffin, the chief executive of Citadel, agreed. “This was a good opportunity for us,” he said. The House Financial Services Committee will investigate the trading frenzy that helped drive shares of GameStop and other companies.Credit...Philip Cheung for The New York Times The House Financial Services Committee will hold a much-awaited hearing on Thursday to question key players in the two-week trading frenzy that helped drive shares of GameStop, the challenged video game retailer, up more than 600 percent. Here’s who will be in the hot seat. Keith Gill, known as Roaring Kitty Mr. Gill, a registered securities broker, advocated shares of GameStop on Reddit but did not disclose his former job at MassMutual as a wellness education director. On Tuesday, Mr. Gill and his former employer were named as defendants in a proposed class-action lawsuit that claimed he misled retail investors who bought shares of GameStop during the rally. Kenneth Griffin, Citadel The Chicago billionaire is the founder and chief executive of Citadel Capital, the fund that has found itself attacked on all sides for its role in the trading frenzy. Citadel is a partner with Robinhood, which Citadel pays for the right to fulfill customers’ trades; it makes money by pocketing tiny price discrepancies between buy and sell orders. It also ran to the rescue of Melvin Capital to the tune of $2 billion, when the fund found itself in a squeeze as investors pushed to corner its short positions during the rally. Vlad  Tenev, Robinhood Markets The Robinhood chief executive has ardently defended the company’s decision to halt purchases of certain stocks during the frenzy, saying mounting lending requirements caused a cash crunch at the online brokerage firm. In the weeks since the frenzy, Mr. Tenev has called for the elimination of the two-day period it takes to settle trades, which he argues was the cause of many of the issues. Gabriel Plotkin, Melvin Capital Management Mr. Plotkin’s hedge fund, Melvin Capital, became the source of ire for Redditors for its short position against GameStop. As buyers poured into the company, it faced a cash crisis that forced it turn to Citadel, its partners and Point72 Asset Management for $2.75 billion in emergency funds. Mr. Plotkin has said that threats in the aftermath of the trading frenzy have forced him to hire security for his family. Steve Huffman, Reddit The chief executive and co-founder of Reddit has defended r/WallStreetBets forum, the public hub for investors during the so-called meme stock frenzy, as a tool to help close the resources gap that benefits institutional traders. He has said that there wasn’t much his company could do to guard against market manipulation, but the forum “does a really good job showing how dangerous options investing can be, because in my history of watching that community, most of them lose money.” Reddit has taken advantage of surging interest, raising $250 million in new funding earlier this month in a deal that valued the start-up at $6 billion. Jennifer Schulp, the Cato Institute An expert on financial markets, Ms. Schulp (not Schlub, as was previously stated here) plans to testify that the meme stock phenomenon didn’t pose a systemic risk. Before joining Cato, she was a director in the enforcement department at the Financial Industry Regulatory Authority. The appointment of Jay Clayton is part of a series of steps that Apollo Global Management announced last month to expand its board and promote greater independence.Credit...Shannon Stapleton/Reuters Jay Clayton, the former Securities and Exchange Commission chairman, will serve as the lead independent director of Apollo Global Management, the private equity firm said on Thursday. The move is intended to improve the Wall Street firm’s governance in the wake of the revelation that Leon Black, one of the firm’s co-founders, had paid $158 million in fees to the registered sex offender Jeffrey Epstein. The appointment of Mr. Clayton is part of a series of steps Apollo announced last month to expand its board and promote greater independence. Mr. Clayton’s post as lead director may help alleviate concerns about Mr. Black’s decision to remain as chairman even after he steps down as chief executive by this summer. A report commissioned by Apollo’s board that reviewed Mr. Black’s professional dealings with Mr. Epstein found that Mr. Black did nothing wrong and was unaware of the predatory conduct with teenage girls that led to Mr. Epstein’s arrest in 2019 on federal sex trafficking charges. But the review found that Mr. Black paid twice as much in fees for tax and estate planning services to Mr. Epstein than previously believed. “I look forward to working with my fellow board members to advance Apollo’s strategy in our ever-evolving markets,” Mr. Clayton said in a statement. He will step into the newly created role on March 1. Mr. Clayton, who had served as S.E.C. chairman for nearly all four years of the Trump administration, will also be returning to his former law firm, Sullivan & Cromwell, but in the role of special policy adviser and counsel. At the S.E.C., his main mandates were to make it easier for companies to tap the public markets and protect retail investors from market manipulation. Mr. Clayton’s “appointment underscores our commitment to both rigorous oversight and diverse viewpoints,” Marc Rowan, who will succeed Mr. Black as chief executive, said in a statement. The scene in Austin, where many residents have been without power. Production of natural gas has stalled as a result of the low temperatures in Texas.Credit...Ilana Panich-Linsman for The New York Times Natural gas futures, which had jumped more than 10 percent earlier in the week, fell 5 percent on Thursday as power began to return to large parts of Texas following a bitter winter storm. Production has stalled, and demand has climbed, in recent days as a result of the freezing temperatures. On Wednesday, Gov. Greg Abbott of Texas signed an executive order directing natural gas providers to stop all shipments of gas across state lines, ordering them to instead direct those sales to Texas power generators. Natural gas is responsible for the majority of the Texas power supply. Oil futures also continued to feel the effects of the winter storms that have disrupted production and caused widespread power outages. West Texas Intermediate, the United States benchmark, fell nearly 2 percent to about $60 a barrel after three days of increases. It has held at or above $60 a barrel this week for the first time in 13 months. U.S. markets Stocks on Wall Street were lower on Thursday, following declines in European and Asian stock indexes, as investors considered the latest update on the U.S. labor market. The Labor Department published its weekly report on new state jobless benefit claims, which remained stubbornly high as the labor market struggles to recover after a surge in coronavirus cases this winter. The S&P 500 index fell 0.4 percent, halting four consecutive days of gains. The tech-heavy Nasdaq dropped 0.7 percent. Congressional hearing on trading frenzy Europe Shares in mining companies, including Rio Tinto, BHP and Glencore, were the best performers on the FTSE 100 index. The economic recovery from the pandemic, led by Chinese growth, has meant a boom in metal prices turning into a windfall for shareholders. Rio Tinto shares were up more than 10 percent on Thursday as iron ore futures jumped more 6 percent. The miners all announced large dividend payouts this week. Lael Brainard, in 2016.Credit...Justin T. Gellerson for The New York Times A top Federal Reserve official delivered a stark warning on Thursday morning: Banks and other lenders need to prepare themselves for the realities of a world wracked by climate change, and regulators must play a key role in ensuring that they do so. “Financial institutions that do not put in place frameworks to measure, monitor, and manage climate-related risks could face outsized losses on climate-sensitive assets caused by environmental shifts, by a disorderly transition to a low-carbon economy, or by a combination of both,” Lael Brainard, one of the central bank’s six Washington-based governors, said in remarks prepared for delivery at an Institute of International Finance event. Her comments come against a grim backdrop as abnormally cold weather wallops Texas — leaving millions without electricity and underlining that state and local authorities in some places are underprepared for severe weather events, which are expected to become more frequent. Such disruptions also matter for the financial system: They pose risks to insurers, can disrupt the payment system, and can make otherwise reasonable financial bets dicey. That makes it important for the Fed to understand and plan for them, central bank officials have increasingly said. Ms. Brainard pointed out that financial companies are beginning to address the risk by “responding to investors’ demands for climate-friendly portfolios,” among other changes. But she added that regulators like the Fed must also adapt. She raised the possibility that bank overseers may need new supervisory tools because of the challenges of climate oversight, which include long time horizons and limited precedent. “Scenario analysis may be a helpful tool” to assess “implications of climate-related risks under a wide range of assumptions,” Ms. Brainard said, making it clear that scenarios would be distinct from full-fledged stress tests. She noted that the Fed’s Supervision Climate Committee, which was announced last month, would work “to develop an appropriate program” to supervise banks’s climate-related risks. The Fed is also co-chair of a task force on climate-related financial risks at the Basel Committee on Banking Supervision, a global regulatory group. Weighing in on climate risks publicly is new territory new for the Fed. Officials spent years tiptoeing around the topic, which is politically charged in the United States. The central bank only fully joined a global coalition dedicated to research on girding the financial system against climate risk late last year, and it has recently seen pushback from Republican lawmakers over the possibility of climate-tied bank stress tests. An Airbus A330 aircraft operated by Lufthansa. Airbus expects to deliver the same number of aircraft this year as it did in 2020.Credit...Felix Schmitt for The New York Times The aerospace giant Airbus announced a 1.1 billion euro loss for 2020 on Thursday and warned that the industry might not recover from the disruption caused by the pandemic for two to four years, as new virus variants delay a resumption of worldwide air travel. The world’s largest plane maker eliminated its dividend for a second straight year and predicted a leveling off in deliveries of its popular commercial jets, the company’s chief executive, Guillaume Faury, said. Daimler, the German car and truck maker, said Thursday that its net profit rose by nearly 50 percent in 2020, as it managed to cut costs more than enough to compensate for a decline in sales and supply chain disruptions caused by the pandemic. The company, which makes Mercedes-Benz cars, Freightliner trucks and other brands, is among traditional vehicle makers defying predictions that the pandemic would accelerate their decline into irrelevance as the industry shifts to electric vehicles. Days after Maryland approved the first digital advertising tax in the country, trade groups including the U.S. Chamber of Commerce and the Internet Association sued the state on Thursday, describing the measure as “a punitive assault.” The lawsuit, which was filed in federal court in Maryland, was also backed by NetChoice and the Computer and Communications Industry Association, lobbying groups that count digital advertising giants such as Facebook and Google as members. The tax, which has roots in European policies, won final approval on Friday in the State Senate and is expected to generate as much as $250 million for schools in its first year. The measure applies to revenue from digital ads displayed in Maryland, and presaged similar efforts in states such as Connecticut and Indiana. Facebook’s advertising sales, which make up nearly 97 percent of its revenue, surged 31 percent in the fourth quarter to nearly $27.2 billion. Google’s search advertising and ads on YouTube soared to nearly $38.8 billion over the same period, a 22 percent increase. The Maryland measure requires companies that pull in more than $15 billion a year in gross revenue to pay a 10 percent tax. The lawsuit, which was reported earlier by The Washington Post, argued that the tax “will raise costs for consumers and make it more difficult for businesses to connect with potential customers” while “reducing resources to support the creation and availability of high-quality ad-supported content, leaving the online field overrun by low-quality ‘junk’ content.” “Simply put, the act will harm Marylanders and small businesses and reduce the overall quality of internet content — all while doing nothing to stave off the dissemination of misinformation and hate speech,” according to the complaint. The suit says that the federal Internet Tax Freedom Act prohibits states from imposing “multiple and discriminatory taxes on electronic commerce,” and that the Maryland law violates the U.S. Constitution’s due process and commerce clauses. Caroline Harris, the vice president of tax policy for the Chamber of Commerce, said in a statement that the law “represents tax policy at its worst.” “Technology platforms have become vital instruments in the growth and success of small businesses and will become more important given the new virtual world we are working in,” she said. “In light of the current pandemic and economic uncertainty, increasing taxes on services used by small businesses to keep themselves running is a particularly poor and ill-timed policy.” The president of the State Senate, Bill Ferguson, a Democrat who was the primary champion of the tax, said in a statement that the lawsuit was unsurprising. He added that it was “disappointing to see these companies spend millions on high-powered attorneys instead of paying their fair share,” and described the tech giants as “free riders to Maryland’s investments in our civic infrastructure.”