The European Central Bank (ECB) is to start withdrawing some of its special measures to support the economy.
The bank is withdrawing some of its cheap short-term loans designed to boost the amount of money available in the markets and encourage bank lending.
ECB president Jean-Claude Trichet said he had asked the banks “to do their job. [...]

Bank of England rate-setters were split three ways about the decision taken earlier this month to pump £25bn more into the economy, meeting notes show.
Seven of the nine members of the Monetary Policy Committee (MPC) voted for the £25bn extension, one voted for a higher amount and one for no change.
The members were, however, unanimous [...]

Regulators involved in the rescue of AIG may have overpaid other banks when cutting a deal, a report says.
The New York Fed paid AIG’s business partners face value for securities so they would cancel insurance-like contracts AIG had written.
But officials used a weak negotiating strategy, Special Inspector General Neil Barofsky’s report said.
AIG was initially bailed [...]

The US finance group GMAC has failed to raise enough capital to cover potential losses and will need further government aid, the Federal Reserve has said.
The firm, formerly the finance arm of General Motors, was one of 10 US banks told to raise extra funds by the Fed.
In May, the Fed ordered the banks to [...]

French Finance Minister Christine Lagarde has warned that huge bailed-out banks created by the financial crisis could abuse their new power.
She has asked other countries to look at the lack of competition from banks “on steroids, relying on public money”.
Governments have stepped in to lend taxpayer support to several troubled banks, including Citigroup and Royal [...]

Royal Bank of Scotland (RBS) and Lloyds Banking Group are to sell off branches in another major shake-up of the UK banking industry.
The sales have been demanded by the European Commission to safeguard competition concerns after the two were bailed out by the UK government.
RBS will sell 318 branches, while Lloyds will dispose of more [...]

Global shares have fallen sharply after figures showing a drop in US consumer spending dampened the enthusiasm that followed Thursday’s US GDP figures.
US consumer spending dropped by 0.5% in September after a 1.4% rise in August – the first fall in five months.
The figures wiped out gains made on Thursday sparked by data showing the [...]

Five current and former directors of Bank of America have been subpoenaed by the office of New York Attorney General Andrew Cuomo, according to sources….
They are likely to be asked how much they knew of Merrill Lynch’s problems and bonuses when they agreed to buy it.
Bank of America saved Merrill Lynch from collapse a year [...]

The City watchdog has been forced to backdown on some of its toughest measures to curb big bank bonuses.
The Financial Services Authority said banks should spread two-thirds of the bonuses of senior employees over three years.
But its code of practice, to be introduced next year, excludes specific measures on deferred bonuses as well as the [...]

White House raises estimate by $2 trillion, raising fears economic growth is in jeopardy
WASHINGTON–President Barack Obama’s domestic policy proposals will face the reality of skyrocketing deficits tomorrow when officials release two government reports projecting huge budget shortfalls over the next decade.
The White House budget office and the Congressional Budget Office, a non-partisan arm [...]