Business & Finance
Citigroup Inc. announced it will break off its retail-brokerage and research operations into a new unit. Sallie Krawcheck, chairman of Sanford C. Bernstein & Co. LLC, a research firm highly regarded for independent analysis, was named to head the new unit. The move comes as Citigroup, the world's second-largest financial services company, and top rivals negotiate with federal securities regulators and New York State's attorney general on greater separation of their research and retail-brokerage operations.
Retailers may experience their worst year-end holiday season in more than a decade, results of a survey by financial news service Bloomberg.com showed. It said Federated Department Stores Inc., the parent of Macy's, Bloomingdale's, and several regional chains, expects sales to drop as much as 2 percent from 2001. Electronics retailing giant Best Buy and BJ's Wholesale Club forecast smaller gains, while growth already has slowed at discounters such as Wal-Mart and Kohl's Corp. Target, Gap, and American Eagle Outfitters all said they expected lower profits, largely because of the need to discount holiday merchandise arriving late from West Coast ports, which were closed for 10 days earlier this month.
The long-awaited plan to reverse a decade of decline in Japan was to be announced Wednesday by Prime Minister Junichiro Koizumi's government. The key features of the strategy, which still requires approval by parliament, are $8 billion in tax cuts to stimulate spending, a new agency to loan cash to struggling businesses, and setting a goal for banks to cut their $336 billion load of nonperforming loans in half by March 2005. At the same time, the central bank announced it will expand the reserves it makes available to commercial lenders by as much as $41 billion and will increase its buying of government bonds by 20 percent a month, or $10 billion.
Government regulators began an investigation into the investment and accounting practices of Swiss Life, one of Europe's largest insurance companies. The Financial Times said the probe stems from the carrier's restating of its first-half results twice in the past month and its not-previously-disclosed role in a private investment plan open only to its board members. Swiss Life now says it lost $388 million in the first six months of 2002, 33 percent more than originally reported.