ECB official urges Cyprus aid
A top European Central Bank (ECB) official is pressing for an agreement soon on a rescue package for Cyprus — a prospect viewed with little enthusiasm in Germany. ECB executive board member Joerg Asmussen was quoted yesterday as telling Germany’s Handelsblatt newspaper that he expects an aid program to be drawn up by the end of next month. He says it would be “negligent” to speculate about when Cyprus might run out of money, but added: “If anyone hopes to delay a decision until after the German parliamentary election [on Sept. 22], that won’t work.”
FBI probes EADS unit
The FBI is investigating allegations of corruption involving a British unit of aerospace group EADS over a contract in Saudi Arabia for the UK’s Ministy of Defence, the Financial Times said yesterday. US authorities have yet to decide whether to launch an investigation against the unit, GPT Special Management Systems, the paper said. An EADS spokesman said the company had not been contacted by the FBI. The newspaper said the FBI had interviewed a witness and acquired documents in connection with allegations that GPT, which sells communications equipment to the Saudi National Guard through the UK defense ministry, bribed Saudi officials.
Boards delay merger talks
The boards of American Airlines parent AMR Corp and US Airways have pushed back meetings to consider final plans for their merger, Associated Press sources said on Sunday. If American and US Airways combine, it would create the world’s biggest airline as measured by passenger traffic. It is not clear when the two boards would finally meet. People familiar with the matter said negotiations are continuing on issues that include AMR CEO Tom Horton’s exact title and role in the combined company. Discussions were centered on Horton being a non-executive chairman of the board while US Airways management, led by CEO Doug Parker, would run the day-to-day operations of the new carrier.
Tougher auditing urged
Banks should have tougher internal auditors to stand up to senior decisionmakers within the firm and oversee risk taking, said Andrew Bailey, head of banking supervision at the UK’s Financial Services Authority. Regulators now expect banks to have internal auditors that can provide a challenge to management, “driving improved governance, risk management and internal controls,” Bailey said in an e-mailed statement. “The expectations of internal audit functions within financial services firms have hitherto been set too low,” Bailey said. Bailey’s comments came in support of draft guidelines published yesterday by the Chartered Institute of Internal Auditors that seek to improve governance within banks.
Taxes help shrink deficit
Sri Lanka’s new taxes on cars and luxury goods helped reduce imports last year and narrow the trade deficit, the central bank said yesterday. The doubling of vehicle taxes from April last year and credit restrictions helped rein in imports, while exports including tea and garments also recorded declines, the bank said. Export earnings dropped to US$9.77 billion, down 7.4 percent from US$10.55 billion in 2011. Imports also slowed to US$19.08 billion, down 5.8 percent from US$20.26 billion. The trade deficit was down 4.1 percent to US$9.31 billion.