Financial Times Summary

Thu 23 Oct 2008

 

General Overview
The US is to host a large-scale international summit on reforming the world economic system next month, days after the presidential election, the White House confirmed on Wednesday. In response to calls from European leaders including Gordon Brown, UK prime minister, and Nicolas Sarkozy, French president, the Bush administration said it was planning the summit of the G2O group of countries in Washington DC on November 15th. The US has overcome its earlier reluctance about such a gathering.
Wall Street
A fresh batch of downbeat earnings and gloomy outlooks pushed US stocks sharply lower on Wednesday as concerns grew over the difficulties facing corporate America in the wake of banking sector turmoil. By mid-morning in New York the S & P 500 and Dow Jones Industrial Average were down 4% edging closer to the lows hit earlier this month.
FSA
The Financial Services Authority is to pull back from changes that could force life assurers to downgrade assumptions of investment returns and hold more capital. It fears such a move could inflame the volatile situation created by falling stock and bond markets. The FSA is keen to avoid measures that would oblige insurers to sell equities or bonds into a falling market, driving down prices and forcing them to shed more assets.
West Lb
Germany's financial sector rescue fund gained momentum yesterday after West Lb made clear it was likely to use the 500bn euros scheme.
Wachovia
Wachovia reported a $23.9bn third-quarter loss on Wednesday, throwing into sharp relief the challenges its west coast rival Wells Fargo will face when it acquires the troubled lender. Wachovia's results were the largest quarterly loss of any lender since the credit crisis began as it took an $18.7bn writedown in the value of loans and securities, put aside $4.8bn to cover future credit losses. The Charlotte, North Carolina-based lender nearly doubled its forecast for losses on a rapidly deteriorating $118m mortgage portfolio.
Fortis
The Belgian government reacted furiously on Wednesday to revelations that Fortis, the stricken Belgian-Dutch bank, had paid its chief financial officer a bonus of about 4m euros when he was demoted in August. Gilbert Mittler, one of the architects of the group's ill-fated participation in the 71bn euro takeover of ABN Amro, left the executive committee following intense shareholder pressure and became an adviser to the chief executive.
Macquarie
Macquarie Group has responded to investor concerns over corporate governance standards by agreeing to fundamental changes to the management contracts it has with three of the its largest quoted infrastructure funds.The Australian investment bank's move will provide the boards of those funds-Macquarie Infrastructure Group, Macquarie

Continue