The Reserve Bank of Australia raised its main interest rate by 25 basis points, to 3.25 percent, the first central bank in a G20 country to increase rates since the start of the financial maelstrom in September 2008. The move took markets by surprise. Analysts wondered if other governments would follow and hoist their rates, but some cautioned that Australia was a special case, having avoided a recession and retained a comparatively robust banking system.

The failure of a government-bond auction in Latvia caused more concern about the struggling Baltic economies. Separately, the European Union warned nine countries, including Germany and Italy, that their budget deficits were excessively high.

European banks took further measures to repay bailout money. Société Générale launched a $7 billion rights issue. And ING agreed to sell its Swiss private-banking unit to Julius Baer, a wealth manager, for $505 million. ING is offloading assets to help it pay back the Dutch public.

Spain's Santander completed a share offering for its Brazilian banking unit that raised $8 billion, the world's biggest flotation this year, but the unit's share price fell on its first trading day.

Spurred on by buoyant equity markets, Aviva, a British insurance company, launched an initial public offering of its Dutch subsidiary from which it hopes to raise $1.6 billion. There have been few flotations in America and Europe lately; the value of IPOs in Europe plunged by 83 percent last year.

Norway's Telenor reached a tentative agreement to merge its telecoms assets in Russia and Ukraine with those of Alfa, its partner in both countries, with which it has been engaged in a courtroom battle over control of the units. Alfa has stakes in a diverse range of enterprises, including TNK-BP, a joint venture with BP.

The European Commission sought comment from Microsoft's rivals about a proposed antitrust settlement in which Microsoft will offer a choice of several Web browsers within its Windows operating system, in addition to its own browser, Internet Explorer. The commission's bulletin is a big step forward in the case, which could be concluded by the end of the year.

Fiat shook up management (again) at Chrysler, splitting Dodge into separate divisions for cars and pickups and replacing the heads of the Chrysler and Dodge brands, who were named to their positions only in June, when the Italian carmaker took operating control. A Fiat veteran was parachuted in to take charge of the Chrysler brand.

Political economy

After Ireland's voters endorsed the European Union's Lisbon treaty by 67 percent to 33 percent, the focus switched to Czech President Vaclav Klaus, who is refusing to sign the document until a court rules on it.

Italy's constitutional court threw out a law giving Silvio Berlusconi immunity from prosecution. At least two cases against the Italian prime minister will now resume, including one in which a British lawyer, David Mills, has already been convicted of accepting a bribe.

North Korea said it was prepared to rejoin the six-party talks aimed at ending its nuclear program. It made the announcement during a visit by Wen Jiabao, China's prime minister, during which he met Kim Jong Il, the country's dictator. But North Korea again insisted on first holding bilateral talks with the United States.

Shoichi Nakagawa, a former Japanese finance minister who was forced to resign in February after seeming to be drunk at a G7 meeting in Rome, was found dead at his home Oct. 4. The police said suicide was unlikely to be the cause of death.