Business update: Obama knocks bank bonuses
President Barack Obama says new revelations of big bank bonuses underscore the need for the financial regulation bill he signed into law this week. Obama today noted that the Treasury Department’s pay czar reported 17 banks gave their top executives $1.6 billion in bonuses while receiving billions of dollars in taxpayer-funded bailouts. The president said the new regulatory law will end taxpayer bailouts of Wall Street firms and will protect consumers who receive mortgage loans and credit cards.
Pay czar didn’t try to recoup ‘ill-advised’ pay: The Obama administration’s pay czar said today that he did not try to recoup $1.6 billion in lavish compensation to top executives at bailed-out banks because he wanted to avoid another public fight over banker pay. Ken Feinberg said 17 banks receiving taxpayer money from the $700 billion financial bailout made “ill-advised” payments to their executives. But he stopped short of calling them “contrary to the public interest,” language that would have signaled a fight to get it back.
Seven EU banks fail worst case stress test scenario: Seven of 91 European banks failed stress tests aimed at measuring their strength in case the continent’s government debt crisis takes a turn for the worse, regulators said today. European Union officials hope the results will reassure markets worried about hidden bank losses from the crisis. The EU said the tests were tough and showed their banking system was resilient enough to weather a slower economy and more turbulance on financial markets.
Walsh tapped as acting comptroller replacing Dugan: The Obama administration has picked a top staffer at the Office of the Comptroller of the Currency to head the agency on a temporary basis. Treasury Secretary Timothy Geithner says he has selected John G. Walsh, currently the agency’s chief of staff, to be acting head of the bank regulatory agency. He replaces John Dugan who announced earlier this month that he was stepping down on Aug. 14 at the end of his term. The comptroller of the currency regulates 1,500 of the nation’s banks, including the largest institutions.
McDonald’s 2Q profit jumps 12 pct on rising sales: Net income climbed 12 percent at McDonald’s Corp. in the second quarter as customers around the globe gobbled up its cheap food and U.S. diners responded to its profitable frappes and other drinks on its hit McCafe menu. The world’s largest hamburger chain also got a boost from business in customers in China and Australia. R.W. Baird analyst David Tarantino wrote in a research note that today’s results showed “healthy” revenue growth but said investors have hoped for even higher figures.
Stocks mixed on earnings, ahead of Euro bank tests: Stocks wavered in a tight range today as investors remained cautious about the strength of European banks following the results of regulatory reviews. Investors were also sorting through another batch of domestic earnings looking for clues about economic growth. The Dow Jones industrial average fell 14 points, sticking to the tight range it has traded in throughout the day.
Alaska Airlines tests ‘greener’ landing at Sea-Tac: Alaska Airlines says it’s flown another test flight of landing procedures at Seattle-Tacoma International Airport that can save fuel, reduce noise and cut emissions by a third. The procedures, already used in Alaska and at several Lower 48 airports, use satellite technology to guide a plane to a landing. That permits the aircraft to fly a shorter, more direct and slower approach.
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