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Regulators to Banks: You Need to Hold Less Money

Basel Committee eases rules on liquid holdings

(Newser) - Banks around the world breathed a sigh of relief today when regulators agreed to ease rules on liquid holdings, Bloomberg reports. Facing a barrage of criticism, the Basel Committee on Banking Supervision agreed to let banks hold less cash—at least for now—and a greater variety of liquid assets... More »

Central Banks Move to Ease Market Strains

Stock futures surge on the news

(Newser) - Central banks around the world plan to ease the strain on the global financial system by taking coordinated action to prevent a lack of liquidity, they announced in a statement this morning—news that sent stock futures soaring more than 250 points . The Bank of Canada, Bank of England, Bank... More »

Tesla's CEO Is Broke

And the company hasn't disclosed that to investors

(Newser) - Elon Musk is a legend in Silicon Valley: His much-buzzed about electric car company, Tesla Motors, is on the verge of a major IPO, and he even had a cameo in Iron Man 2. There's just one problem. “About four months ago, I ran out of cash,” he... More »

UAE Backs Dubai Banks

Central bank steps in to reassure jittery markets

(Newser) - The UAE got behind domestic and foreign banks in troubled Dubai today, with its central bank setting up a "liquidity facility" on the eve before battered global markets were to re-open after a holiday break. The move was widely seen as countering the perception that Dubai might be the... More »

Investors Ditch Once Lofty Cerberus Fund

Failed investments in Chrysler, GMAC have clients pulling $5.5B

(Newser) - Hedge-fund investors are leaving once-vaunted investment firm Cerberus Capital Management in droves, the Wall Street Journal reports. The firm, whose acquisitions of Chrysler and GMAC turned disastrous, is seeing $5.5 billion in capital—or 71% of its hedge fund assets—walk out the door. "We have been surprised... More »

NY AG Slaps Schwab With Suit Over Defrauding Clients

(Newser) - The New York attorney general has told Charles Schwab he will sue the brokerage for civil fraud over its marketing of securities to clients, reports the Wall Street Journal. Andrew Cuomo alleges that Schwab's brokers had little understanding of the financial instruments and then failed to inform clients that the... More »

It's Too Soon for Feds to Ease Up on Economy

If Washington cuts off the cash, recession will worsen: Krugman

(Newser) - With critics prematurely calling on Washington to scale back financial rescue efforts, economic history fans see “déjà vu all over again,” writes Paul Krugman in the New York Times. This is the third time a major economy has been stuck in a liquidity trap, and both previous... More »

Geithner, Summers Outline New Regulatory System

(Newser) - The current financial regulatory system “is riddled with gaps, weaknesses, and jurisdictional overlaps,” Treasury Secretary Timothy Geithner and Obama economic guru Larry Summers write in today’s Washington Post. They outline, in broad strokes, their plan to fix it:
  • Capital and liquidity requirements will be raised across the
... More »

Nationalize Some Banks: Greenspan

Ex-Fed head abandons free-market purism, wants temporary move

(Newser) - Alan Greenspan, once famed for his light touch, now says the US may have to temporarily nationalize some banks. The former Fed chairman said in an interview with the Financial Times that some institutions need government ownership to restore liquidity and help shore up the larger financial system. "In... More »

Blockade Forces Gaza Banking Crisis

(Newser) - An ongoing Israeli embargo has cut off cash flow in Palestine's Gaza Strip and forced banks there to close, the Financial Times reports. With a Muslim holiday approaching on Monday, tens of thousands are said to be broke; some stormed an insolvent bank this week, prompting officials to shut down... More »

Dow Rises 173 in Volatile Day

Fed's beige book reports economic contraction

(Newser) - Stocks pulled higher again today after a roller coaster day that saw the Dow swing temporarily into triple-digit losses, the Wall Street Journal reports. Despite dour data on the economy, stocks rose ahead of a November jobs report, due Friday, that is expected to report large losses. The Dow gained... More »

GM Loses $4.2B, Has Little Cash

Talks with Chrysler dead

(Newser) - General Motors is almost out of money, the company said today, reporting a quarter far worse than Wall Street was prepared for. The nation’s largest automaker lost $4.2 billion, or $7.35 a share, excluding special items, nearly double the $3.70-per-share analysts expected. After burning through $6.... More »

Tough German Bailout Caps Bank Salaries

Bonuses, dividends also nixed for troubled firms' execs

(Newser) - The German cabinet approved the terms of a $645 billion bailout plan today—which includes a salary cap for top bank managers. Banks who take part in the bailout must cap managers' salaries at about $670,000 and withhold bonuses and dividends. Some of Germany's top banks have said they... More »

Central Banks Scramble to Feed Cash Into Markets

Biz slows as bailout talks stall

(Newser) - The world's central banks are frantically spraying money into the economy to prevent it from seizing up as the US bailout package stalls and confidence plummets, Reuters reports. The holdup in Washington has made edgy commercial banks even more inclined to hoard cash and not lend to each other—leaving... More »

Fed Grabs Another $30B in Currency Swap

Lines set up with banks in Australia, Europe to ease credit

(Newser) - The Federal Reserve announced today that it had set up another $30 billion worth of currency swap lines—designed to put more dollars into world markets—in its latest effort to deal with the credit market. The Fed arranged two $10 billion reciprocal circuits with Australia and Sweden’s central... More »

10 Banks Form $70B Fund to Stave Off Crash

Paulson brokers twin public-private liquidity measures

(Newser) - Ten of the world's largest banks have formed a massive liquidity fund to mitigate the effects of the Lehman Brothers meltdown, reports the Financial Times. All the investment banks will be able to borrow up to a third of the $70 billion fund in order to reduce volatility and stay... More »

Medvedev Urges Calm in Russian Market Crisis

With stocks off big, bank chief warns of lack of liquidity

(Newser) - The Russian economy is skidding, and its leaders are giving somewhat contradictory messages, the AP reports. Shortly after President Dmitry Medvedev assured the public today that stock-market troubles don’t “reflect the actual state of the economy,” the chairman of the country’s central bank said “as... More »

Fed Extends Emergency Loan Program for Wall Street

Bernanke offers several options for cash-strapped firms

(Newser) - The Federal Reserve today extended its emergency borrowing program for Wall Street firms through Jan. 30. Originally the program, through which investment houses can tap the central bank for a quick source of cash, was supposed to last until mid-September. Another program, where banks can temporarily swap more risky investments... More »

Paramount Loses $450M Funding Deal

The failure is part of a larger trend as liquidity dries up

(Newser) - A $450-million deal with Deutsche Bank that would have financed up to 30 films for Paramount is off the table, the Financial Times  reports. Perhaps an unlikely casualty of the credit crunch, Paramount walked after a lack of enthusiasm in the market led to terms that were unattractive, persons familiar... More »

Barclays Seeks Liquidity With $8.85B Offering

More than half will be bought by Qatari, Japanese investors

(Newser) - Add Barclays to the ranks of banks that are floating new shares in an effort to restore liquidity in the lingering wake of the subprime debacle, reports the AP. Barclays will offer up $8.85 billion in shares—with large stakes being purchased by Japanese bank Sumitomo Mitsui and the... More »

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