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Hi, I’m Zach Warmbrodt, POLITICO’s financial services editor and co-author of our Morning Money newsletter. I’ll be your guide this week for coverage of the Milken Institute Global Conference.

BEVERLY HILLS, Calif. – Good morning from the Beverly Hilton, where world leaders and titans of finance are gathering for exclusive panel discussions and side chats on the biggest global challenges of the day. We plan to bring you inside those rooms throughout the week.

This is the first of four special editions of Global Insider from the Milken conference. Please forward this to other participants who might enjoy it. And if you’re here, let Zach know what you find most insightful, surprising or entertaining (or just send celeb sightings).

The war in Ukraine, international banking jitters and a potential U.S. debt default are among the big themes that policymakers and executives plan to hash out the next few days, in between conference-supplied “wellness sessions,” puppy playtime and lighter fare like the “Sippin’ on Success” panel with Snoop Dogg. (Your host’s favorite Milken memory was chatting with KISS bass player Gene Simmons in 2019. He was starting a farewell tour that’s just now coming to a close.)

Let’s get into it.

THE WEEK AHEAD

Monday

AT MILKEN: IMF Managing Director Kristalina Georgieva and Citigroup CEO Jane Fraser assess the state of the global financial system … POLITICO editor-in-chief Matt Kaminski interviews NATO Admiral Rob Bauer on Russia’s invasion of Ukraine … Sen. Joe Manchin (D-W.Va.) and ExxonMobil CEO Darren Woods talk energy … House Financial Services Committee Chair Patrick McHenry has a conversation about capital, crypto and climate

IN WASHINGTON: Philippine President Ferdinand Marcos Jr. meets with President Joe Biden

Tuesday

AT MILKEN: Former Treasury Secretary Steven Mnuchin and Wells Fargo CEO Charlie Scharf discuss the uncertain economy … Arkansas Gov. Sarah Huckabee Sanders talks about governing in America … “Top Chef” host Padma Lakshmi discusses her book “Love, Loss, and What We Ate: A Memoir”

Wednesday

AT MILKEN: Michael Milken interviews outgoing World Bank President David Malpass … Rep. Brendan Boyle chats about the debt limit with former Trump acting chief of staff Mick Mulvaney … POLITICO Playbook author and White House correspondent Eugene Daniels interviews Obama Foundation CEO Valerie Jarrett

Thursday

India will host the foreign ministers of members of the Shanghai Cooperation Organization in Goa, through May 5

Saturday

King Charles III will be crowned at a coronation at Westminster Abbey

MILKEN GLOBAL CONFERENCE POSTCARD

Full events details | Watch the livestream

Monday’s conference kick-off featuring top financial policymakers and executives could not be more timely, after U.S. officials and Wall Street giants scrambled over the weekend to manage the failure of San Francisco’s First Republic Bank.

It’s the latest in a string of bank meltdowns that have rattled the global economy this year.

First thing this morning, Bloomberg News head of economics and government Stephanie Flanders will interview IMF Managing Director Kristalina Georgieva on the state of the global financial system. Next up will be Citi CEO Jane Fraser, BNY Mellon President and CEO Robin Vince and other top executives who will give the Wall Street view. Citi and BNY’s perspective will be especially valuable because they were among megabanks that deposited $30 billion in First Republic in March to shore up confidence in the lender. That move now appears to have only served as a short-lived Band-Aid.

The big question: After Silicon Valley Bank, Credit Suisse and now First Republic, just how bad are things going to get? And how can policymakers avert a crisis? House Financial Services Committee Chair Patrick McHenry, who is leading Congress’s response to the banking turmoil, may give a hint of Capitol Hill’s next move when he speaks Monday afternoon.

Gene Ludwig, who regulated U.S. banks as the former Comptroller of the Currency, told me he wants to hear what attendees think about market fragility, as banks succumb to complications from rising interest rates. He believes the market is “disrupted more than is commonly appreciated.”

Ludwig, now the CEO of Ludwig Advisors, is calling for an increase in the deposit insurance limit for business accounts to help fend off further bank runs. But he also wants to broach a broader topic at the conference: Are interest rates the only way to fight inflation?

He thinks the government could encourage greater food production to fight rising prices, for example, as a more benign inflation response than interest rate policy that he likens to “chemotherapy.”

“If it’s allowed to go up a great deal more,” he said of the increase in interest rates, “there will be more disruptions in the marketplace — not only in the banking system.”

We’ll find out if the Federal Reserve will pause its rate hike campaign on Wednesday, when it announces its next monetary policy move.

GLOBAL RISKS AND TRENDS

A DEMOCRAT’S DEBT-LIMIT CALL TO ACTION

Rep. Brendan Boyle, the top Democrat on the House Budget Committee, fears financial markets have been “much too casual” about the risk the U.S. will default on its debt in the coming months, with Republicans and President Joe Biden at odds over how to raise the government’s borrowing authority.

Boyle told me in an interview that he wants to use his first appearance at Milken to instill a sense of urgency among financiers in attendance. A default has the potential to rock global markets.

House Republicans passed a debt limit increase last week but coupled it with deep government spending cuts. Democrats likened it to a ransom they’d have to pay to meet the government’s existing financial obligations.

“For those in the room who have influence over my Republican colleagues, especially over Republican leadership, it’s time for them to do what they did in 2011 – and that is to start making phone calls and to start letting their elected officials know just how completely insane this is, and how unnecessary it is as well.”

The issue will be front and center this week, with the Treasury Department expected to release its first estimate of the “X-date” in which the U.S. would run out of cash to pay its bills.

CRYPTO ADVOCATES LAY LOW AS OTHER CRISES PILE UP

Last year’s Milken conference happened as the red-hot crypto market was beginning to slide after its Covid-era surge. The industry was coming off a peak of public fascination but it had yet to be hit with the existential threat that was the November bankruptcy of the giant FTX exchange. The crisis exposed widespread industry mismanagement and led to criminal charges.

A few months later, digital asset startups and executives are still playing defense. But Blockchain Association CEO Kristin Smith says she’s glad the industry won’t be the center of things at this year’s Milken, amid a host of other global problems like banking turmoil in financial services and artificial intelligence risks in tech.

Case in point: The main Milken panel where crypto leaders, including Smith, will talk policy is invite-only. During Milken, the industry is also having a separate exclusive gathering in Los Angeles at an event hosted by the Medici Network.

“Having blockchain and cryptocurrencies in the mix but not the full focus is probably the best place to be,” Smith said. “In the past, there’s almost been too much attention, and the industry really needs some time to continue to innovate.”

MARCOS MEETS BIDEN

—PHILIPPINE PRESIDENT MARCOS REAPS DEFENSE SUPPORT : Philippine President Marcos will return to Manila following his White House visit with Biden today with a package of defense-related agreements amid growing tensions with Beijing in the South China Sea. The two leaders will agree to “a new set of bilateral defense guidelines that will deepen our alliance cooperation and interoperability across operational domains, including land, sea, air, space, and cyberspace,” said a senior administration official who briefed reporters on condition of anonymity. The Biden administration will also provide the Philippine military several C-130 aircraft and “a number of Cyclone-class coastal patrol vessels” to bolster Manila’s coastal defense capacity, the official said. The Foreign Affairs Department in Manila lashed out on Friday at “highly dangerous maneuvers” by a Chinese coast guard vessel that almost caused a collision between a Philippine vessel in disputed waters last week. That incident was a “premeditated provocation designed to deliberately create a friction” between the two countries, Chinese Foreign Ministry spokesperson Mao Ning said on Friday. The State Department called it “a stark reminder of PRC harassment and intimidation of Philippine vessels” in a statement on Saturday.

Manila is concerned about Beijing’s intensifying operations to stake expansive claims in the South China Sea. An international tribunal in The Hague ruled against those claims in 2016 but Beijing has refused to walk them back. Those tensions have helped make Marcos “one of the most pro-American Philippine presidents we’ve seen, if not the most,” said Derek Grossman, senior defense analyst at the RAND Corporation and former daily intelligence briefer to the assistant secretary of defense for Asian & Pacific Security Affairs.

PARAGUAY VOTES

Conservative party candidate Santiago Pena won Paraguay’s presidential election, breaking a winning streak for left-leaning politicians in Latin America. Pena is a 44-year-old former finance minister who has vowed to maintain ties with Taiwan as part of his platform, amid debate about Paraguay’s relationship with China.

BRAIN FOOD

Bloomberg has a rundown of how the conflict in Sudan threatens to destabilize neighboring countries already suffering their own unrest and food insecurity.

“Ethnic militias, anti-government insurgencies, paramilitary groups and Russian mercenaries operating in porous, mineral-rich borderlands could use the crisis to launch attacks or foment rebellions,” according to the report.

ONE FUN THING

Washington now has its first full-service Ukrainian restaurant, Axios reports. Ruta, led by Chef Dima Martseniuk (also known as “The Ambassador of Borscht”), will be serving up varenyky (pierogis), Chicken Kyiv, beef stroganoff and other “fun mashups” on Capitol Hill.

Thanks to Phelim Kine, editor Heidi Vogt and producer Sophie Gardner.

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