Business this week

Nov 19th 2009
From The Economist print edition

Ben Bernanke remarked that the Federal Reserve was “closely” watching currency markets, and that the central bank would “help ensure that the dollar is strong." The weak dollar has caused commodity prices to nudge up, a potential inflationary threat. Any opinion from the chairman of the Fed regarding the value of the greenback is controversial because the Treasury handles exchange-rate policy.

Dominique Strauss-Kahn, who heads the IMF, called on China to let the yuan appreciate, “the sooner the better”. China tightly controls its currency by pegging it to the dollar—benefiting domestic exports—and has so far resisted pleas to allow it to rise. See article on China's Yuan Strategy.

Opening the vault

Around 14,700 people disclosed their foreign holdings to the Internal Revenue Service under a recent amnesty, twice as many as expected. Meanwhile, the procedure for selecting which “secret” accounts at UBS are to be disclosed to American authorities was made public. Americans with at least SFr1m ($991,000) in accounts suspected of being used for tax evasion at the Swiss bank between 2001 and 2008 will have their names handed over, as will those with lesser amounts but where a “scheme of lies”, such as using fake documents, has been used to open an account.

Lloyd Blankfein, the chief executive of Goldman Sachs, apologised for his bank’s part in fuelling the market for cheap credit that led to the financial crisis. To aid the recovery, Goldman launched a scheme to help 10,000 small businesses, to which it will donate $500m over five years. Some were left unimpressed; Goldman pulled in at least $100m on 36 separate trading days in the third quarter and on 46 days in the second quarter. It has set aside $16.7 billion for pay and compensation so far this year.

Mitsubishi UFJ unveiled plans to raise up to ¥1 trillion ($11.2 billion) through a sale of common stock, the biggest ever share sale undertaken by a Japanese financial institution. Its plans to merge with Morgan Stanley’s Japanese unit were also scaled back.

The euro zone exited recession in the third quarter when its economy grew by 0.4%, after contracting for more than a year. Among the big economies that (To read the full article, click here).