Atlanta Fed chief: More can be done
JACKSON, MISS. — The president of the Federal Reserve Bank in Atlanta says the Fed should act to further stimulate growth if the economy doesn’t improve by year’s end.
But speaking Friday to the Mississippi Economic Council, Dennis Lockhart said he supports no further Fed action if employment growth shows improvement in the next six months.
If it doesn’t, Lockhart said the Fed’s current policy will become “untenable.” Lockhart is on the Federal Reserve’s policy committee.
Lockhart says he thinks there’s some room for the Federal Reserve to use its balance sheet to further promote economic growth.
He says he could support more efforts to stimulate the economy by loosening credit. However, he says he’s unsure how much fruit that strategy would bear, and that it wouldn’t be a “miracle cure.”
Credit firms settle suit with retailers
NEW YORK — Visa, MasterCard and major banks have agreed to pay $7.3 billion to millions of merchants to end a dispute over card fees.
The dispute involved payments called interchange fees that merchants paid in credit card transactions.
The law firm representing the merchants said in a statement that about 7 million merchants, including Kroger Inc. and Safeway Inc., were involved.
The class action suit stretches back to 2005, and involves most major U.S. banks as defendants.
Tribune Co. bankruptcy plan approved
DOVER, DEL. — Tribune Co. has won court approval to emerge from Chapter 11 bankruptcy protection, more than four years after a leveraged buyout left the media company with unsustainable debt.
A federal bankruptcy judge in Delaware said Friday he would approve the plan, which leaves Tribune in the hands of a new ownership group led by two hedge funds and JPMorgan Chase.
Tribune publishes several major newspapers in the U.S., including the Los Angeles Times, The Baltimore Sun and the Chicago Tribune. It also operates 23 television stations.
The company sought bankruptcy protection in 2008, less than a year after billionaire developer Sam Zell led a buyout that left it with $13 billion in debt.
The company must now seek federal permission to transfer its broadcast licenses to its new owners.
New York Fed knew banks manipulated rate
WASHINGTON — The Federal Reserve Bank of New York released documents Friday that show it learned five years ago of big banks understating their borrowing costs to manipulate a key interest rate.
The documents also show Treasury Secretary Timothy Geithner, who was then president of the New York Fed, urged the Bank of England to make the rate-setting process more transparent.
A congressional panel requested the documents and is investigating manipulation of the London interbank offered rate, which affects interest people pay on loans.
The process for setting LIBOR has come under scrutiny since Britain’s Barclays bank admitted two weeks ago that it had submitted false information to keep the rate low. In settlements with U.S. and British regulators, the bank agreed to pay a $453 million fine.
Regulators are also looking to see if other major banks, including Citigroup Inc. and JPMorgan Chase & Co., committed similar violations.
The LIBOR rate is little-known outside the financial industry. But it provides the architecture for trillions of dollars in contracts around the world, including mortgages.
Macy’s fights J.C. Penney over Martha Stewart products
NEW YORK — Macy’s Inc. said Friday it has won a preliminary block against Martha Stewart Living Omnimedia Inc. selling some of its products at J.C. Penney.
Department-store chain Macy’s sued Martha Stewart Living in January in a bid to stop a licensing deal between the housewares company and J.C. Penney.
Macy’s had claimed Martha Stewart’s deal with Penney violates the terms of an exclusive pact Macy’s has to sell Martha Stewart-branded products at its stores. The complaint came after Penney acquired a 16.6 percent stake in Martha Stewart Living and announced plans last December to open Martha Stewart mini-shops beginning next year.