The nation's largest banks must undergo new stress tests to show they can weather another recession, and the Federal Reserve said those that pass them can boost dividends paid to investors. The Fed oversees Wall Street's biggest banks, including Bank of America and Wells Fargo. Banks have to file plans to the Fed showing that they'd have sufficient capital cushions to cover any losses under different economic scenarios -- including if the economy were to fall back into a recession, Fed officials said. All of the 19 largest banks overseen by the Fed must file the plans -- even if they don't intend to increase dividends.
U.S. crime probe begun on 50 bank leadersThe federal government has opened criminal investigations into about 50 executives and directors of U.S. banks that collapsed during the financial crisis. Deputy Inspector General Fred Gibson said Wednesday the inspector general's office at the Federal Deposit Insurance Corp. has been probing the role of the executives in bank failures around the country. The criminal investigations are separate from civil lawsuits approved by the FDIC's board against some 80 bank executives, employees and directors. The FDIC is seeking to recoup about $2 billion in bank losses that the regulator says were the result of negligence or misconduct by executives or directors.
CPI rises 0.2% in OctoberConsumer prices barely changed for the third straight month, strengthening the Federal Reserve's hand at a time when it is defending a plan to boost the economy by buying more government debt. Extraordinarily low inflation was a major impetus for the Fed program to spend $600 billion buying Treasury bonds. A report Wednesday from the Labor Department showed that inflation remains super-low. A steep rise in gasoline prices drove the consumer price index up 0.2 percent in October, the fourth straight monthly increase. But excluding volatile food and energy costs, core consumer prices were unchanged. In the past year, the core index has risen only 0.6 percent, the smallest increase since the index began in 1957.
Barnes & Noble 'poison pill' plan ratefiedBookseller Barnes & Noble Inc.'s shareholders have ratified a shareholder rights plan, making the so-called "poison pill" official, the bookseller said Wednesday. Preliminary results show 72 percent of shareholders voted in favor of the plan at a special shareholder meeting in New York. The plan limits shareholder stakes to 20 percent. Billionaire activist investor Ron Burkle recently waged and lost a proxy fight for seats on the bookseller's board, which he says favors the family of Chairman Leonard Riggio. Barnes & Noble created the plan in 2009 after Burkle acquired a 19 percent stake in the bookseller.
Drugmaker Roche plans to ax 4,800 jobsRoche Holding AG, the world's biggest maker of cancer medicines, will cut 4,800 jobs in a 2.4-billion Swiss franc ($2.4 billion) cost-reduction plan to offset the impact of health reform and drug setbacks. The plan will affect about 6 percent of Roche employees, mostly in the pharmaceutical division, and lead to costs of about 2.7 billion francs through 2012, the Basel, Switzerland-based company said Wednesday in a statement. Employment will be cut in Nutley, N.J.; Madison, Wis.; Graz, Austria, and Burgdorf, Switzerland, among other sites.
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