France continued to reel at the scale of the trading scandal at Société Générale, the country's second-biggest bank. Jérôme Kerviel, the trader said to be responsible for a $7.2 billion loss, was placed under formal investigation by the courts for forgery and breach of trust. France's president, Nicolas Sarkozy, dropped a strong hint that Daniel Bouton, SocGen's boss, and other executives should go. SocGen's board disagreed, giving Bouton a unanimous vote of confidence.
Alliance Data Systems sued Blackstone Group to force the private equity firm to complete its buyout of the processor of credit-card transactions. Blackstone said the deal is in jeopardy, blaming "unprecedented" requirements from banking regulators that would leave it with an "unlimited and indefinite" liability.
Sallie Mae reached an arrangement with several banks that gives it $31 billion in new financing. The deal ends a legal tussle with the consortium that backed away from a $25 billion offer for the American provider of student loans.
UBS disclosed the extent of its recent losses. The Swiss bank said it expects to have a net loss of $11.5 billion in the fourth quarter. It is due to reveal the official figures Feb. 14. It also forecast that its losses on assets stemming from America's mortgage market would be around $14.9 billion, higher than had been expected.
Munich Re sounded a cheery note in yet another gloomy week for investors when it reported a record profit of $5.3 billion for 2007 and stated that its exposure to risk in the subprime and bond-insurance markets was small. The reinsurer was also helped by a relatively quiet Atlantic storm season.
Scottish & Newcastle, a British brewer, accepted a takeover offer of $15.4 billion from Carlsberg and Heineken. The Danish and Dutch brewers will split S&N's operations: Carlsberg will take ownership of the thriving Russian business and Heineken gets S&N's American and British brands, including Newcastle Brown Ale.
Yahoo said it would cut 7 percent of its workforce after profit fell by 23 percent in the fourth quarter, compared with a year earlier, to $206 million. The company also predicted that it would soon face "headwinds." Analysts anticipate a squeeze in advertising revenue this year.
Qtrax, a company promising free legal music downloads on its website, launched its service with much ceremony in Cannes, France, but soon was embarrassed when the big recording labels said they had not negotiated licensing deals. Roughly 61,000 users an hour logged on to Qtrax only to hear the sound of silence.Political economy
India eased limits on foreign direct investment in six industries, including commodity exchanges, credit-information firms, oil refining, titanium mining and parts of aviation, such as cargo planes and pilot training -- but not domestic passenger airlines.
Arnold Schwarzenegger's ambitious blueprint for reforming health care in California was delivered a deadly blow when a committee in the state Senate voted it down on the ground it was too expensive. The plan would have ensured that most Californians had their medical costs covered and was viewed as a model for other states to follow.
America's economy slowed considerably in the last three months of 2007. According to the first official estimate, GDP grew by just 0.6 percent, annualized, in the quarter. Following its recent emergency cut in the federal funds rate, the Federal Reserve made a further half-point reduction, to 3 percent.
In an update to its October forecast, the International Monetary Fund trimmed its expectations for the world economy, which it said would grow by 4.1 percent this year. Its outlook for the euro area was markedly worse than in last autumn's report, reducing the region's GDP growth rate, which is now expected to be 1.6 percent in 2008.
Venezuela's president, Hugo Chávez, called on other Latin American and Caribbean countries to form a military alliance against the United States. There has been no rush to join.
Angela Merkel's Christian Democrats did badly in two German state elections, in Hesse and Lower Saxony. The Social Democrats did better, but not much. The biggest winner was the Left Party, which in both elections crossed the 5 percent threshold for parliamentary seats.