Sat, Jan 16, 2010 page10

• World Business Quick Take

  • AGENCIES
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  ■BANKS

  Citigroup plans bonuses

  Citigroup Inc could pay commercial and investment banking bonuses for last year that are similar to 2008 levels, and may cap individual cash payouts at about US$60,000, according to people that have been briefed on the plan. Some details of the bonus plans are still being ironed out, and the payouts will vary across businesses and countries, people said. But many employees have been briefed about the likely shape of their bonuses, which are set to be paid out in coming weeks. According to a July report from New York Attorney General Andrew Cuomo, Citigroup as a whole paid US$5.3 billion of bonuses for 2008. For last year, Citigroup is likely to pay up to 40 percent of bonuses in the form of deferred cash and stock, sources said. Citigroup declined to comment.

  ■AUTOMOBILES

  Bosch to close parts factory

  German engineering giant Bosch said it was set to close a British car parts factory with the loss of 900 jobs, blaming the economic downturn, which has hit the automotive industry hard. The division in charge of the plant near Cardiff, Wales, will recommend to the firm’s board that production be phased out at the factory, which makes alternators for the motor industry. A consultation period runs to the end of next month so all involved can agree terms for the phase-out of production before a final confirmation from the board. Bosch, the latest in a long line of automotive firms caught up in the fierce global downturn, said on Thursday demand for the alternator had dropped dramatically and the firm was on track to make its first loss for six decades. A union representative described the news as a “terrible blow” for hundreds of workers.

  ■AID

  IMF prepares aid package

  The IMF said on Thursday it had reached tentative agreement on a US$2.35 billion aid package for Jamaica, hit hard by the global financial crisis. IMF managing director Dominique Strauss-Kahn said fund staff and the Jamaican authorities reached agreement on Thursday on an economic program supported by a US$1.25 billion loan under a 27-month stand-by arrangement. The program could go to the IMF executive board for approval “in the next few weeks, pending some prior actions to be taken by the Jamaican government,” he said in a statement. Approval of the program was expected to catalyze about US$1.1 billion in funding from other international financial institutions, he said. Among key elements of the program were a fiscal consolidation strategy to streamline expenditure and reform the public sector and a debt management strategy to reduce the government’s interest bill and a reform, the statement said.

  ■UNITED STATES

  Bernanke takes on Senate

  US Federal Reserve Chairman Ben Bernanke waged a fresh battle against Senate efforts to strip the Fed from banking supervision. Bernanke, in a paper to Congress released on Thursday, argued that stripping the Fed of such power would deprive the central bank of information that factors into the setting of interest rates to influence overall economic activity. During the most recent financial crisis, information from banking supervisors helped Fed officials better understand the depths of credit problems, leading them to lower interest rates more quickly and aggressively than they otherwise would, the paper said. Information on the health of banks will factor into Fed decisions about when to start boosting interest rates and reeling in other stimulus to prevent inflation from taking off, it said.
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