■ Stock marketsNYSE amends constitution
The New York Stock Exchange's new independent board has amended the exchange's constitution to add a representative of individual investors on its executive panel. Federal regulators must approve the change. The amendment, which was approved by the eight-member board Monday, was made to include "a useful additional voice," NYSE interim chairman John Reed said in a statement Wednesday. The change comes a week after NYSE members approved a package of changes proposed by Reed that eliminated the exchange's 27-member board in favor of a smaller independent board that will oversee compensation and regulation. A 20-member executive panel will handle operations, such as listing standards.
US economy is expanding
The US economy is now in a broad-based expansion and the battered labor market is emerging from the dumps, the Federal Reserve's Beige Book survey showed Wednesday. "Reports received from the district banks suggest that the economy continued to expand in October and early November," said the Beige Book survey of the central bank's 12 districts, released eight times a year. "Descriptions of growth varied somewhat. But improvements appeared to be reasonably broad-based, with most districts noting growth in a number of industries." The labor market, the laggard in an economy that boomed at a stunning 8.2 percent annual growth pace in the third quarter, according to the latest figures, was finally recovering.
■ Credit cards
S&P blasts LG bailout
Standard & Poor's warned yesterday that LG Card Co, South Korea's largest credit card company, would require a capital injection much larger than a pledged 1 trillion won (US$832 million) to be kept afloat. Assuming a "generous" recovery ratio of 20 to 30 percent for LG Card's estimated delinquent assets of about 8 trillion won among its total assets of about 25 trillion won, the card company's negative net asset value is estimated to be larger than between 2 and 3 trillion won, Standard & Poor's said. "Therefore, the LG group's planned 1 trillion won capital injection into LG Card will be a drop in the ocean," said Choi Young-Il, a credit analyst at the ratings agency. LG Card and other South Korean card companies are saddled with high delinquency rates hovering around 10 percent.
Three central bank policymakers dissented from last month's decision to increase reserves for banks, saying there was no need to pump more money into the economy, minutes of the meeting show. Kazuo Ueda, Teizo Taya and Miyako Suda all dissented from the decision at the Oct. 9 to Oct. 10 board meeting, according to minutes released in Tokyo. At the meeting, policy makers voted 6-3 to raise the upper limit of the target for reserves the Bank of Japan makes available to commercial banks by ?2 trillion (US$18.3 billion) to ?32 trillion. The bank also kept interest rates almost at zero. Many members said "It was appropriate" to pump extra money into the world's second-largest economy, because "it was important to ensure further the recent movement toward an economic recovery by making room for conducting monetary operations in a more flexible manner."