Stories Report on Business is following today :
Geithner, Bernanke in spotlight
America's financial stewards are in the spotlight today.
U.S. Treasury Secretary Timothy Geithner is scheduled to testify before a House panel about the controversial bailout of AIG, answering questions, in particular, related to billions of dollars that went to the insurer's trading partners. According to documents cited today by The New York Times, Federal Reserve Board officials turned down a suggestion that would have seen AIG's trading partners give back some $30-billion (U.S.).
Mr. Geithner, also former president of the New York Fed, and former Treasury secretary Henry Paulson, are scheduled to testify in Washington today. "I really want to find out what led them to pay 100 per cent to the counterparties," Edolphus Towns, the New York Democrat who leads the House Committee on Oversight and Government Reform," told the newspaper. "The whole credibility of the Federal Reserve is called into question when you do things like that in secrecy, and this is something we need to change the culture of."
Also in the spotlight is Federal Reserve Chairman Ben Bernanke, whose Federal Open Market Committee announces its policy decision at 2:15 p.m. ET today. No change is expected to the Fed's record low benchmark Federal funds rate, but this latest rate setting, and accompanying comments that are so closely watched by markets, comes in a crucial week for Mr. Bernanke. His term as chairman expires Jan. 31, and there has been opposition in the Senate to his confirmation, though he appears likely to pass the vote. UBS economist Maury Harris, in a research note this morning, dubbed his nomination "too big to fail," and posed the question of whether the reluctant support by many senators comes at a price "of at least somewhat compromising the Fed's independent discretion in managing U.S. monetary policy."
UBS noted the comments of Senate Majority Leader Harry Reid, who said that his vote for confirmation was not unconditional and that "I made it clear that to merit confirmation, Chairman Bernanke must redouble his efforts to ensure families can access the credit they need to buy or keep their home, send their children to college or start a small business. He has assured me he will soon outline plans for making that happen, and I eagerly await them."
Toyota's troubles could spread
Toyota Motor Corp.'s stock sank today as troubles related to its recall of eight models threatened to spread. Late yesterday in an unprecedented move, the auto maker halted sales of eight popular models to fix gas pedals that could stick, prompting a suspension of production at six North American plants. The auto maker has already recalled 2.3 million vehicles. A spokeswoman for the company said today that it is studying whether there could be similar issues in Europe, though the part in question originated with one American supplier. Read the story
Investors await Apple tablet
Apple Inc. is expected today to unveil its hotly anticipated tablet computer. The technology giant has scheduled an announcement, and all eyes are on the latest from the company that brought the world the iPod and iPhone.
Follow the news as the Globe liveblogs the announcement. We invite readers to join in the conversation:
Related : The iPod gives way
Japanese exports surge
Japan's exports are surging but its growing dependence on China could hold that growth in check. Japanese exports rose 12.1 per cent in December, greater than expected and the first year-over-year increase since before the crisis, but that was largely due to the fact that more than half were bound for other Asian countries. Government data also showed that China has overtaken the United States as Japan's leading export market, which could be an issue as China moves to cool its fast-growing economy. Economists told the Reuters news agency that change will have some impact on Japan but that its export growth will probably keep its economy moving.
Bankers warn on new regulations
Bank leaders attending the World Economic Forum warned today that new regulations governing financial institutions threaten to cripple the global recovery. Peter Levene, the chairman of Lloyd's, called at Davos for "good regulation, better regulation, but not more regulation," while Deutsche Bank chairman Josef Ackermann warned that "the pendulum might have swung too far." Bankers also warned of different countries adopting different rules, creating uneven playing fields across the globe. On the other side are those who believe even stronger regulation is needed. "Obama's proposals on banking regulation are finally going in the right direction … but they are not enough," said economist Nouriel Roubini. Read the story
ICBC curbs lending
China's biggest bank said today it will no longer roll over some loans, though it stressed it was not halting lending. Reports from Beijing said the move by Industrial and Commercial Bank of China is the latest sign of the government's campaign to curb credit growth. Given that Chinese companies tend to borrow for short periods, Reuters said, ICBC's directive is tantamount to calling in loans. "ICBC will not rush to lend, nor will it stop lending," ICBC said. "In the first 20 days of January this year, due to concentrated capital demand from ongoing projects, the bank's credit offering was a bit fast but was still below that of the same period last year."
From today's Report on Business