BUSINESS BRIEFS
Fed chief says financial system due for change
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WASHINGTON — Federal Reserve Chairman Ben Bernanke yesterday called for a major reform of the financial regulatory system to create more "holistic" oversight of the world's largest financial institutions in an effort to avoid a repeat of the problems that contributed to the present global financial crisis.
Bernanke, speaking to the Council of Foreign Relations, outlined a four-part strategy that he said could provide better regulation and help to minimize systemic risks.
It included better supervision of financial institutions considered "too big to fail" and improved financial infrastructure to allow more transparency in transactions involving newer financial instruments, such as credit default swaps.
It also included a review of regulations to make sure they don't contribute to stresses on the financial system during economic downturns.
The strategy also included the creation of an agency to monitor potential dangers to the entire financial system."We must have a strategy that regulates the financial system as a whole, in a holistic way, not just its individual components," Bernanke said. "In particular, strong and effective regulation and supervision of banking institutions, although necessary for reducing systemic risk, are not sufficient by themselves to achieve this aim."
INVENTORIES DOWN FOR A FIFTH MONTH
WASHINGTON — Businesses slashed inventories at the wholesale level for a fifth straight month in January, the longest stretch since the last recession in 2001 and a warning signal that firms are likely to keep cutting production to cope with the deepening downturn.The Commerce Department said yesterday that wholesale inventories fell 0.7 percent in January, which was slightly smaller than the 1 percent fall economists had expected. It followed a 1.5 percent drop in December that was initially reported as a 1.4 percent decline.
UNITED TECH TO CUT 11,600 JOBS
HARTFORD, Conn. — United Technologies Corp., saying the downturn in its core markets is worse than expected, cut its 2009 profit forecast 13 percent yesterday and will eliminate 11,600 jobs, or 5 percent of its global workforce.The announcement by the maker of Otis elevators and Sikorsky helicopter reverses the guarded optimism of a month ago when the company's top executives continued to back a higher earnings forecast from December.
CITIGROUP CEO REPORTS A PROFIT
NEW YORK — Citigroup Inc. has been operating at a profit through the first two months of the year, according to a letter that the embattled bank's chief executive sent to employees.In the letter sent Monday, CEO Vikram Pandit said the first-quarter performance so far has been the bank's best since the last time it recorded net income for a full quarter — that was in the July-September period in 2007. Based on historical revenue and expense rates, Citi's projected earnings before taxes and one-time charges would be about $8.3 billion for the full quarter.
