Monday Business Edition

Monday Business Edition is an Open Thread

From Yahoo News Business

1 Japan passes 4 trillion yen disaster relief budget

by David Watkins, AFP

Mon May 2, 3:57 am ET

TOKYO (AFP) – Japan’s parliament on Monday passed an emergency 4 trillion yen ($49 billion) relief budget to help fund reconstruction after the deadly March 11 earthquake and tsunami devastated northeastern regions.

Ruling and opposition lawmakers put aside their differences in an effort to launch efforts to rebuild the country’s quake-hit northeast as quickly as possible.

But analysts warned the passing of the budget will not ease pressure on under-fire Prime Minister Naoto Kan, who has faced criticism over the government’s handling of the crisis and the subsequent nuclear emergency.

AFP

2 Poland dreams of becoming shale gas El Dorado

by Bernard Osser, AFP

Sun May 1, 4:31 pm ET

WARSAW (AFP) – Poland is dreaming of becoming a European shale gas El Dorado thanks to estimates of huge deposits, which if confirmed could make it an natural gas powerhouse and free it from energy dependence on Russia.

“If early estimates are confirmed, it will be a revolution like in Norway or Great Britain after the discovery of natural gas in the North Sea,” Piotr Krzywiec, a geologist at Poland’s National Institute of Geology (PIG) told AFP in a recent interview. “Poland could become Europe’s number one or one of its largest natural gas producers,” he adds.

A recent US study, however, warned that shale gas carries a greater carbon footprint than oil, coal and conventional natural gas over at least a 20-year period due to emissions of methane — a greenhouse gas — in the extraction process known as “fracking” or hydraulic fracturing.

3 Sony apologises for breach, boosts security

by David Watkins, AFP

Sun May 1, 12:03 pm ET

TOKYO (AFP) – Sony on Sunday apologised for a security breach that compromised millions of users, and said it could not rule out the possibility that credit card information was stolen.

Sony executives bowed in apology and said the company would begin restoring its shut-down PlayStation Network and Qriocity online services in the next week as it moved to improve security after the breach hit 77 million accounts.

“This criminal act against our network had a significant impact not only on our consumers, but our entire industry,” said Sony executive deputy president Kazuo Hirai.

4 Next ECB rate hike coming soon, analysts say

by William Ickes, AFP

Sun May 1, 12:31 am ET

FRANKFURT (AFP) – The European Central Bank will keep its key interest rate at 1.25 percent this week, analysts say, but might signal a further hike amid climbing prices in the 17-nation eurozone.

Renewed fears of a Greek debt default will overshadow the meeting of ECB policymakers in Finland even though European Union (EU) leaders still reject speculation that financial markets now all but take for granted.

Economists expect the ECB governing council, gathering Thursday in Helsinki for one of two annual meetings away from the bank’s headquarters in Frankfurt, to hint at more rate hikes, with the first possibly as soon as June.

5 As profits surge, Europe’s carmakers rev up global ambitions

Sun May 1, 4:39 pm ET

PARIS (AFP) – Two years after a world economic downturn all but wiped them out, European carmakers have bounced back to the spotlight with Volkswagen aiming to be the industry leader and Fiat carving out a global brand for itself.

Unfettered of their obligations to repay state aid and riding out the expiry of government “cash-for-clunkers” schemes that initially plunged their revenue, carmakers this week gave rosy outlooks for the rest of fiscal 2011.

Germany’s Volkswagen reported a three-fold profit leap in the three months from January through March to 1.71 billion euros ($2.5 billion), selling two million cars, a new milestone for Europe’s biggest automaker.

6 China pays price for world’s rare earths addiction

by Allison Jackson, AFP

Sun May 1, 1:17 am ET

BAOTOU, China (AFP) – Peasant farmer Wang Tao used to grow corn, potatoes and wheat within a stone’s throw of a dumping ground for rare earths waste until toxic chemicals leaked into the water supply and poisoned his land.

Farmers living near the 10-square-kilometre expanse in northern China say they have lost teeth and their hair has turned white while tests show the soil and water contain high levels of cancer-causing radioactive materials.

“We are victims. The tailings dam has contaminated us,” Wang, 60, told AFP at his home near Baotou city in Inner Mongolia, home to the world’s largest deposits of rare earths, which are vital in making many high-tech products.

7 Pakistan tax dodgers put economy in peril

by Claire Truscott, AFP

Sun May 1, 1:49 am ET

ISLAMABAD (AFP) – Pakistan is defying mounting Western pressure to end a giant tax dodge with fewer and fewer people contributing to government coffers, spelling dire consequences for a sagging economy.

Tax is taboo in Pakistan. Barely one percent of the population pays at all, as a corrupt bureaucracy safeguards entrenched interests and guards private wealth, but starves energy, health and education of desperately needed funds.

Less than 10 percent of GDP comes from tax revenue — one of the lowest global rates and worse than in much of Africa, say economists.

8 Ex-US bases thrive in Philippines

by Cecil Morella, AFP

Sun May 1, 4:35 pm ET

SUBIC, Philippines (AFP) – Two huge former US military bases have found a new lease on life in post-Cold War Philippines, with budget airlines and cargo ships taking the place of fighter jets and destroyers.

The conversion of Subic Naval Base and Clark Air Base into tax-haven special economic zones nearly two decades ago has drawn a few thousand investors that include shipbuilders, electronic firms, airlines and tour operators.

The transition, however, has not been smooth and the vast areas, each about the size of Singapore, still do not live up to their potential with parts resembling ghost towns, officials involved in running them acknowledge.

9 Scandal taints Buffett’s status as American hero

by Andrew Beatty, AFP

Sun May 1, 5:53 am ET

OMAHA, Nebraska (AFP) – Nothing in the world is quite like Berkshire Hathaway’s annual shareholder meeting.

Part investment seminar, part stand-up comedy, it is above all a festival dedicated to capitalism and the firm’s CEO, Warren Buffett.

On Saturday, as many as 40,000 Buffett groupies — many of whom became rich through the firm — packed into a cavernous stadium in the rural state of Nebraska, listening with rapt attention to the pronouncements of the “Oracle of Omaha.”

10 Buffett to shareholders: deputy’s action ‘inexcusable’

by Andrew Beatty, AFP

Sat Apr 30, 4:10 pm ET

OMAHA, Nebraska (AFP) – Billionaire investor Warren Buffett sought to draw a line Saturday under a controversy sullying his normally Teflon image, blasting a key lieutenant’s behavior as “inexplicable and inexcusable.”

The revered magnate, who 20 years ago vowed to ruthlessly deal with staff who tarnish his firm’s reputation, told a stadium full of attentive shareholders that David Sokol had broken company rules in a share-trading scandal.

Once Buffett’s heir apparent, Sokol resigned after it emerged he bought $10 million worth of shares in chemicals firm Lubrizol before recommending Buffett’s Berkshire Hathaway group snap up the company. He gained an estimated $3 million from the deal.

11 Nivea cream marks 100th birthday, wrinkle-free

by Estelle Peard, AFP

Sun May 1, 12:40 am ET

FRANKFURT (AFP) – With its distinctive smell, texture and iconic blue pot, Nivea cream turns 100 this year as a brand found in bathrooms in 200 countries that is nonetheless battling to keep up with copycat products.

In 1911, a German named Oscar Troplowitz, head of pharmaceutical firm Beiersdorf, pioneered the use of the oil-in-water emulsifier “Eucerit” that proved to be an instant hit because it did not go rancid like its competitors.

He then added extract of orange, bergamot, lavender, rose, lilac and a touch of lily and christened his new invention “Nivea”, a name taken from the Latin word “niveus”, meaning snow-white.

12 WTO talks on ‘brink of failure’: Lamy

by Agnes Pedrero, AFP

Fri Apr 29, 2:04 pm ET

GENEVA (AFP) – The Doha round of global talks aimed at expanding free trade is on the brink of failure, World Trade Organisation chief Pascal Lamy warned on Friday, with experts signalling that a collapse could even threaten the WTO.

Lamy added to the gloomy atmosphere that has prevailed in recent weeks after negotiators met at WTO headquarters in Geneva to take stock of their most recent attempts to overcome a decade of deadlock.

“My frank assessment is that under the right conditions of temperature and pressure a deal would be doable… were it not for NAMA (Non Agricultural Market Access, or industrial goods),” the WTO director general said.

13 EU probes banks over debt insurance abuses

AFP

Fri Apr 29, 11:01 am ET

BRUSSELS (AFP) – Europe launched antitrust probes Friday into giant US and European banks whose fine-slicing of the insurance market was blamed by debt-ridden eurozone states for pushing them into bailouts.

The investigation focuses on Credit Default Swaps (CDS), derivative financial products traded between financial institutions or investors originally meant to protect investors in the event a company or state they have invested in defaults on payments, but also used today in speculative investment portfolios.

These products have helped push up yields when trading government bonds issued by Greece and other struggling European states.

Reuters

14 Japan says no limits to Tepco liability from nuclear disaster

By Taiga Uranaka, Reuters

1 hr 12 mins ago

TOKYO (Reuters) – Tokyo Electric Power should face unlimited liability for damages stemming from its crippled nuclear power plant, Chief Cabinet Secretary Yukio Edano said on Monday, indicating Japan’s government will take a hard line against the utility in its rescue plan.

Officials from the government, Tokyo Electric (9501.T), and creditor banks have been scrambling to craft a scheme that would allow the utility to cope with the massive bill of compensating displaced residents while staying in business as a private firm.

The plan under discussion would create a fund to provide loans for and buy preferred shares from Tokyo Electric, commonly known as Tepco. Other utilities would pay premiums as a buffer against future accidents, and Tepco would repay the fund from its profits over several years, sources with knowledge of the talks have told Reuters.

15 Sony freebies help soothe anger at data breach

By Isabel Reynolds and James Topham, Reuters

2 hrs 5 mins ago

TOKYO (Reuters) – Sony Corp has won over some gamers by offering free access to its PlayStation Network to compensate for the leak of personal details on 78 million user accounts, but still has some way to go to regain the trust of consumers.

Many PlayStation users around the world were angry and frustrated that the first warning of one of the largest Internet security break-ins ever came a week after Sony detected a problem with the network on April 19.

Sony on Sunday apologized and said it would gradually restart the PlayStation Network with increased security and would offer some free content to users.

16 Swaps players to beg U.S. regulators for speed, delay

By Christopher Doering, Reuters

44 mins ago

WASHINGTON (Reuters) – Wall Street banks and major market players will deliver a mixed message to U.S. regulators at a meeting this week: hurry up and tell us what you are going to do, but give us more time to respond before you do it.

U.S. futures and securities regulators, having issued draft versions of most of the major rules required to overhaul the vast over-the-counter derivatives market, are holding a roundtable on Monday and Tuesday to hear from industry on how they should schedule the rollout of their reforms.

Bankers, exchange executives and traders have been fiercely critical of the brisk pace of reform, arguing that sloppy rules could reduce market liquidity, push more trading to unregulated markets, and ultimately lead to higher prices for consumers.

17 Buffett believes reputation after Sokol still intact

By Ben Berkowitz, Reuters

Sun May 1, 7:00 pm ET

OMAHA, Nebraska (Reuters) – Warren Buffett believes his reputation is intact, the U.S. economy needs more jobs and that Donald Trump is not going to be the next president.

He offered those and dozens of other opinions in a wide-ranging news conference on Sunday that capped off the annual meeting weekend for Berkshire Hathaway, his ice-cream-to-insurance conglomerate.

Buffett also told Reuters Insider in an interview that none of the people on Berkshire’s secret CEO succession list know they are on the list — but the top candidate for the job will not need any convincing to take it.

18 Quake sinks Japan April car sales to record low

By Chang-Ran Kim and Hyunjoo Jin, Reuters

Mon May 2, 3:19 am ET

TOKYO/SEOUL (Reuters) – Japanese new vehicle sales in April halved, sinking to the lowest monthly tally on record, as domestic automakers felt the full brunt of the March 11 earthquake that caused unprecedented disruption to car production.

In stark contrast, the fortunes of South Korea’s Hyundai Motor (005380.KS) and affiliate Kia Motors (000270.KS) brightened, as they benefited from the Japanese automakers’ woes to post double-digit growth in global sales for the month.

Sales of vehicles excluding 660cc microcars in Japan fell 51.0 percent from the year before to 108,824 units last month, with market leader Toyota Motor Corp (7203.T) putting in the worst performance with a 69 percent drop.

19 Warner Music $3 billion buyout could be done this week: source

By Yinka Adegoke, Reuters

Sun May 1, 5:36 pm ET

NEW YORK (Reuters) – Final buyout bids for Warner Music Group are due on Monday and the company could be sold by the end of the week in a deal valued at over $3 billion, according to a person familiar with the matter.

The third round of bids is led by two competing financial groups Len Blavatnik’s Access Industry and a joint bid by Tom and Alec Gores’ Platinum Equity and Gores Group, according two people.

The Warner Music sale process is taking place against a backdrop of ongoing declines in music sales as executives struggle to figure out new business models to guarantee the future of the industry. While Warner Music continues to generate reasonable levels of cash on its balance sheet — a key metric for investors — it will still be seen as a risky investment in a very tough market.

20 Wages high on central bank radars

By Kristina Cooke, Reuters

Sun May 1, 5:34 pm ET

NEW YORK (Reuters) – Central bankers around the world are at different stages when it comes to combating price pressures, but all of them are keeping a close watch on wages for early warning signs of future inflation.

Brazil’s central bank last week expressed growing concern about above-inflation wage deals and said interest rates will remain high for a long time to counter the inflation threat.

In the United States, meanwhile, wages have been largely stagnant due to stubbornly high unemployment. That’s one reason Federal Reserve Chairman Ben Bernanke thinks the oil-related jump in inflation will be fleeting and interest rates can stay at record lows.

21 German government experts see Greece restructuring debt

By George Georgiopoulos, Reuters

Sat Apr 30, 8:42 am ET

ATHENS (Reuters) – Two German government advisers see a debt restructuring by Greece as inevitable while two of the overborrowed country’s ministers continued to rule it out in newspaper interviews on Saturday.

Mounting fears that Greece will have to restructure a debt mountain expected to reach 340 billion euros this year, roughly one and a half times its output, have pummeled Greek bonds, driving yield spreads over German bunds to new record highs.

“For me restructuring is the only road to take, for Greece to feel some relief and for creditors to contribute to the solution of the Greek problem,” Lars Feld, one of the five “wise men” who advise the German government on economic policy, told To Vima newspaper in an interview.

22 EU hits banks with credit default swap probe

By John O’Donnell and Luke Baker, Reuters

Fri Apr 29, 8:18 pm ET

BRUSSELS (Reuters) – The $28 trillion credit default swaps market came under investigation on Friday by the European Union, adding to official pressures bearing down on a huge and opaque business that is widely blamed for aggravating the recent banking and euro zone debt crises.

The European Commission, the EU’s executive body, said it is probing whether major investment banks, including Goldman Sachs and JP Morgan, colluded in their operations in a market that is already under scrutiny by U.S. authorities and being subjected to broad, new regulations.

Credit default swaps, or CDS, are derivatives that let a buyer transfer loan default risk to a seller, making them a kind of insurance against default. CDS can also be bought by speculators without direct interest in the debts involved.

23 U.S. plans to exempt forex swaps from new rules

By Rachelle Younglai, Reuters

Fri Apr 29, 6:53 pm ET

WASHINGTON (Reuters) – In a big win for business, the Treasury proposed on Friday to exempt commonly used foreign exchange swaps and forwards from the most onerous new rules for the derivatives market.

The Treasury Department said that forcing these financial products through clearinghouses and onto exchanges was not necessary because existing procedures in the foreign exchange market mitigate risk and ensure stability.

Any disruptions to this market “could have serious negative economic consequences,” the department said.

24 Microsoft stock tumbles after Windows sales dip

Reuters

Fri Apr 29, 6:33 pm ET

SEATTLE (Reuters) – Microsoft Corp shares fell as much as 5 percent on Friday, a day after the software company reported a dip in its Windows operating system sales.

The world’s second-largest tech company behind Apple Inc met Wall Street’s profit estimate and beat on overall sales in its earnings report on Thursday.

But investors were concerned with lower personal computer sales nagging at Windows, Xbox sales bringing down profit margins and losses in its online business.

AP

25 Tourists visiting Fukushima despite nuclear fears

By TOMOKO A. HOSAKA, Associated Press

1 hr 1 min ago

FUKUSHIMA, Japan – On a windy, chilly day near the top of a volcano known as “little Mount Fuji,” the Ryan family of Florida described the fuss back home before they left.

“People thought we were crazy,” said Kerry Ryan, 52, of Cape Coral, Fla.

“They said we’d come back glowing,” 10-year-old granddaughter Isabelle Ryan added.

26 Japan’s parliament passes tsunami recovery budget

By MARI YAMAGUCHI, Associated Press

1 hr 54 mins ago

TOKYO – Japan’s parliament passed a $48 billion tsunami recovery budget Monday that will only start to cover the cost of what was the most expensive disaster ever.

As more budgetary battles lie ahead, mounting frustrations over the government’s response to the tsunami and the still-unfolding nuclear crisis at the crippled Fukushima Dai-ichi power plant are threatening to topple the country’s prime minister.

The 4 trillion yen budget supplement to the fiscal year that started in April was unanimously approved by parliament’s upper house budget committee Monday morning and was made into law at the chamber’s plenary session later in the day. The more powerful lower house had approved the plan Saturday.

27 Berkshire doesn’t plan big changes after scandal

By JOSH FUNK, AP Business Writer

Sun May 1, 7:52 pm ET

OMAHA, Neb. – Berkshire Hathaway CEO Warren Buffett says he doesn’t think his reputation has been hurt much by a former top executive’s questionable investment in Lubrizol shortly before Berkshire announced plans to buy the chemical company.

Berkshire also doesn’t plan to change the way its managers are overseen because of the episode.

Buffett and Berkshire’s Vice Chairman Charlie Munger were asked about David Sokol’s actions Sunday at a news conference that concludes Berkshire Hathaway’s annual shareholder events. The two also discussed the prospects for another financial crisis and the qualities of the holding company’s next CEO.

28 Customers stay despite high-profile data breaches

By JORDAN ROBERTSON, AP Technology Writer

Sun May 1, 3:13 pm ET

SAN FRANCISCO – Week after week, thieves break into corporate computer systems to steal customer lists, email addresses and credit card numbers. Large data breaches get overshadowed by even larger ones.

Yet people are turning over personal information to online retailers, social networks and other services in growing numbers. The point at which people lose trust in the websites they deal with appears further away than ever before, if it exists at all, as shopping, socializing and gaming online becomes deeply embedded in modern life.

People have come to accept that sharing information is the price of a meaningful, connected life online – even if they don’t like it.

29 Sony execs apologize for network security breach

By YURI KAGEYAMA, AP Business Writer

Sun May 1, 6:43 am ET

TOKYO – Sony executives bowed in apology Sunday for a security breach in the company’s PlayStation Network that caused the loss of personal data of some 77 million accounts on the online service.

“We deeply apologize for the inconvenience we have caused,” said Kazuo Hirai, chief of Sony Corp.’s PlayStation video game unit, who was among the three executives who bowed for several seconds at the company’s Tokyo headquarters in the traditional style of a Japanese apology.

Hirai said parts of the service would be back this week and that the company would beef up security measures. But he and other executives acknowledged that not enough had been done in security precautions, and promised that the company’s network services were under a basic review to prevent a recurrence.

30 Atlantic City looks to bus more homeless back home

By WAYNE PARRY, Associated Press

Sun May 1, 2:11 pm ET

ATLANTIC CITY, N.J. – Larry Bogan knows precisely how much it costs for a bus ticket from Atlantic City back home to Pompano Beach, Fla.: $126. Unfortunately, that’s $126 more than he has at present.

And so instead of cooking in a restaurant or driving a tractor trailer for someone like he used to do, Bogan eats at a soup kitchen and sleeps on park benches or in a train or bus station each night. He’s one of about 500 homeless people living in the nation’s second-largest gambling market.

Reducing Atlantic City’s homeless population is a key element of a new effort to help the struggling casino resort get back on its feet after more than four years of plunging revenues, lost market share and layoffs. A state agency plans to allocate just under $100,000 to a local homeless shelter to buy bus or plane tickets back home for any homeless person who wants to leave.

31 Group of 6 senators hones plan to cut US deficits

By ANDREW TAYLOR and STEPHEN OHLEMACHER, Associated Press

Sun May 1, 2:14 pm ET

WASHINGTON – A bipartisan group of six senators is closing in on what could represent the best chance for tackling a deficit crisis that has forced the government to borrow more than 40 cents of every dollar it spends.

Their plan, still a work in progress, would reduce borrowing by up to $4 trillion over the next decade by putting the two parties’ sacred cows on the chopping block. Republicans would have to agree to higher taxes while Democrats would have to accept cuts in popular benefit programs such as Medicare, Medicaid and maybe even Social Security.

There is urgency to their work.

32 Workers demand better jobs, pay on May Day

By VERENA DOBNIK, Associated Press

Sun May 1, 6:00 pm ET

NEW YORK – Thousands of workers and immigrant laborers took to the streets on Sunday to celebrate May Day, demanding rights for those “who toil in the sun” while others pocket the profits.

The message in Manhattan – delivered with bullhorns and drums – was echoed by millions of workers around the world, from Havana to Berlin and Istanbul.

The burning issues were the same: more jobs, better working conditions, higher wages and decent health care.

33 Buffett says mistakes were made in handling Sokol

By JOSH FUNK, AP Business Writer

Sun May 1, 12:27 am ET

OMAHA, Neb. – Berkshire Hathaway’s annual meeting on Saturday was dominated by somber topics, as Warren Buffett explained to roughly 40,000 shareholders how the company had been battered by a trusted former employee’s misdeeds and a string of natural disasters.

Buffett assured the crowd at an Omaha convention center that Berkshire is strong enough to withstand both the David Sokol scandal and the estimated $1.7 billion in insurance losses that drove profits down 58 percent in the first quarter.

Buffett said he doesn’t think he will ever understand why Sokol bought stock in Lubrizol shortly before recommending that Berkshire buy the chemical company. Buffett said he believes Sokol clearly violated Berkshire’s ethics and insider trading policies.

34 Swan Lake vs slums: Egypt faces housing challenge

By TAREK EL-TABLAWY, AP Business Writer

Sun May 1, 1:15 am ET

CAIRO – From the roof of the house in which he lives, Mohammed Hassan can see some of central Cairo’s most prized real estate. A five-star hotel sits in the distance to the right, the towering foreign ministry building seems close enough to touch, and the Nile is a straight shot ahead.

The 27-year-old restaurant delivery driver shares the eight-room mud brick home with his mother and three siblings.

And then there’s the seven other families that also live there, each in one of the rooms. All of the at least 70 residents share a toilet that’s basically a hole in the ground.

35 5 banks fail in Fla., Ga., Mich.; makes 39 in ’11

Associated Press

Fri Apr 29, 7:57 pm ET

WASHINGTON – Regulators on Friday shut down banks in Florida, Georgia and Michigan, a total of five closures that lifted the number of U.S. bank failures this year to 39.

The pace of closures has slowed, however, as the economy improves and banks work their way through piles of bad debt. By this time last year, regulators had closed 64 banks.

The Federal Deposit Insurance Corp. seized First National Bank of Central Florida, based in Winter Park, Fla., with $352 million in assets, and Cortez Community Bank of Brooksville, Fla., with $70.9 million in assets.

36 Beijing turns to currency to cool inflation

By JOE McDONALD, AP Business Writer

Fri Apr 29, 11:29 pm ET

BEIJING – Surging inflation that helped trigger protests in Shanghai is prompting China’s leaders to turn to a tool they long resisted: speeding up the rise of the country’s tightly controlled currency.

Rising prices are a political threat to China’s communist leaders and they have declared taming inflation their priority. But they suffered a setback in March, when a double-digit jump in food costs pushed inflation to a 32-month high of 5.4 percent. That was despite four interest rate hikes since October, curbs on bank lending and government orders to producers to hold down price increases.

How fast to let the yuan gain is a high-stakes balancing act. A stronger yuan could help ease inflation by making oil and other imports cheaper. But Beijing also worries that a rising yuan might hurt exports and lead to job losses and unrest, so any gains will likely still be too small for Washington and other critics that say an undervalued yuan is swelling China’s trade surplus.

37 Casinos see opening in online poker indictments

By OSKAR GARCIA, Associated Press

Fri Apr 29, 9:07 pm ET

LAS VEGAS – With the three biggest online poker companies in the U.S. shut down, traditional American casino companies hope to quickly cash in on an industry worth billions of dollars.

Casinos hoping to fill the void created by a federal crackdown are pushing louder for legalization and regulation so they can line up tens of thousands of likely regulars.

They say thousands of Americans are playing poker online despite attempts to stop them, including the federal indictments this month of Internet poker executives on money laundering and fraud charges.

38 EU targets 16 major banks in swaps market probes

By GABRIELE STEINHAUSER, AP Business Writer

Fri Apr 29, 5:17 pm ET

BRUSSELS – The European Union’s competition watchdog is investigating the practices of some of the world’s largest banks, as well as a clearing house and a financial data firm, in the market for credit default swaps.

The two probes home in on a market that has come under fire for lacking transparency and allegedly worsening market turmoil during the financial crisis.

While the investigations focus on competition issues, they accompany a wider regulatory crackdown in Europe and the United States on credit default swaps and other derivatives and could have implications for the broader functioning of the market. In that market, several companies control trillions of dollars of financial instruments.

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