CIT Group Inc has hired former Merrill Lynch CEO John Thain as its new chief executive, the commercial lender said in early February, wagering that the well-traveled executive can guide its post-bankruptcy turnaround. Thain, 54, immediately replaces interim CEO Peter Tobin, who will remain a director. Former CIT chief Jeff Peek, another past Merrill executive, retired on January 15. CIT said Thain was hired partly for the expertise he gained restructuring the New York Stock Exchange, as it looks to reestablish itself after a disastrous foray into subprime lending, and one of the largest bankruptcies in US history. Within the last decade, Thai...
Bank of Japan policy board member Seiji Nakamura rebuffed government pressure for more BOJ action to fight deflation, saying that pumping liquidity into the financial system alone will not put an end to debilitating price falls. The heavily indebted government fears deflation and a strong yen could push Japan back into recession in the run-up to upper house elections. Analysts say it may urge the central bank to buy more government debt or expand a funding operation it introduced in December to prevent that. Nakamura suggested the bank wasn’t likely to oblige by increasing its debt buying, however, warning the government that it needs to ge...
Ireland’s services sector shrank by its fastest rate in six months in January, when a marked fall in new orders indicated that unusually bad weather was not solely to blame, a survey showed this week. The NCB Purchasing Managers’ Index fell to 44.4 from 48.3 in December, when it had reached a level last equalled in February 2008 and begun to close in on the 50 mark that separates growth from contraction. The sub-index measuring new business slipped to 45.5 from 48.7 in the previous month, retreating to its lowest level since September last year. “Worryingly the level of new orders fell back sharply, highlighting that this was more than ...
Western powers have called for a fourth round of UN measures against Iran for refusing to halt uranium enrichment activities as demanded by five Security Council resolutions. Iran insists it has a sovereign right to produce nuclear fuel for what it says is a peaceful civilian atomic energy programme. The west fears Tehran’s programme is aimed at developing nuclear weapons. The US, Britain, France and Germany want to reach an agreement this month with Russia and China – which have veto power on the Security Council and have opposed tough sanctions in the past – so that they can begin work on a new UN sanctions resolution as soon as possi...
Australia’s central bank shocked markets by skipping an interest rate rise this week, citing the impact of higher mortgage rates at home while noting tighter policy in China and concerns over sovereign debt abroad. The Reserve Bank of Australia’s (RBA) decision to keep its key cash rate at 3.75 percent confounded expectations of a rise to four percent and hammered the local currency as investors slashed estimates for how high rates might go this year. Yet, RBA Governor Glenn Stevens also emphasised that, should the domestic economy continue to improve as expected, then further hikes would likely be needed over time. “This is a pause, no...
US auto sales for January are expected to show a sharp drop for Toyota after it pulled eight of its most popular models from showrooms last week following complaints over sticking accelerator pedals. In the first public comment from an executive at Toyota’s head office, the company’s executive in charge of quality said he was expecting a bigger-than-usual impact from the recall. “The sales forecast is something that we’re extremely worried about,” Executive Vice President Shinichi Sasaki he told a news conference in the central Japanese city of Nagoya. “Already, I am hearing that sales have been affected somewhat in January,” he...
White House adviser Paul Volcker will urge Congress to curb the risks taken by large banks to help prevent them from being treated as “too big to fail,” according to a testimony. Detailing a recent proposal known as “the Volcker rule,” the former Federal Reserve Chairman will tell lawmakers that commercial banks’ proprietary and speculative activities should not be protected by the government. He will also urge international consensus on “appropriate” actions to restrict commercial banks’ activities. Volcker – an adviser to President Obama whose star has risen in recent weeks – will appear before the Senate Banking Committ...
Kenya’s inflation rate is likely to remain low in the near future as the performance of east Africa’s biggest economy improves, the central bank’s Monetary Policy Committee (MPC) said on Friday. In a statement expounding upon the MPC’s decision to keep its key central bank rate (CBR) at seven percent on Tuesday, Central Bank of Kenya Governor Njuguna Ndung’u said overall inflation rates were “low and stable”. Kenya’s inflation rate fell precipitously after the statistics agency adopted a new calculation method in October. It is expected to ease even further with the February data when the country changes the basket of goods it...
Lawmakers challenged Treasury Secretary Timothy Geithner’s credibility recently after he said he was not involved in a decision by bailed-out insurer AIG to withhold details about $62bn paid to banks. Geithner held his ground at a hearing, however, insisting the government-funded rescue which cost more than $180bn had been necessary to avert economic collapse. Big taxpayer-funded bailouts for AIG and other financial institutions at a time of soaring unemployment have angered voters. Concerns about the economy helped to put a Republican into a Senate seat that had been long-held by Democrats in Massachusetts, serving notice to lawmakers faci...
London-based oil explorer Tullow Oil launched a placing of 80.4 million shares on Wednesday, equivalent to 10 percent of its outstanding shares, to pay for development of assets in Uganda. Based on Tuesday’s closing price of 1,216 pence, the sale would raise almost £1bn. Tullow said the money will be needed to meet higher capital expenses after it dropped a plan to sell half its Uganda assets. Tullow planned to sell the interests in the fields in the Lake Albert basin, to attract a partner with the technical expertise needed to develop the complex project. However, when Tullow’s partner Heritage Oil agreed to sell its interests to Italia...