Money Daily Brief: EU unveils financial reform plan
– Updated 2:25 p.m EDT (18:25 UTC)Skip to next paragraph
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•EU financial reform: The European Commission unveiled legislation to improve oversight of the region's financial system through two watchdogs. A systemic risk board, comprised of its members' central bankers, would consult with EU leaders but have no formal powers. A separate system of financial supervisors would monitor day-to-day affairs, work through national bank supervisors, and have power to resolve disputes among them.
•Buffett's bumper return: Just eight days after the demise of Lehman Brothers, Warren Buffett's Berkshire Hathaway bought $5 billion in perpetual preferred stock from stumbling financial giant Goldman Sachs. A year later, Hathaway is $3 billion richer for his foresight. The world's No. 2 richest man, Mr. Buffett is reportedly also looking at investing $1.6 billion in the United Kingdom's move to become the world's largest producer of offshore wind-power.
•"Plain vanilla" no more: US Treasury Secretary Timothy Geithner said the administration has dropped its support for an idea that would force banks and other financial services to offer "plain vanilla" financial products like 30-year fixed mortgages. Many in President Obama's own party – including House Financial Services Committee chairman Barney Frank – said the provision would not become a part of legislation the administration has pushed to create a Consumer Financial Protection Agency.
•Escaping recession: New Zealand’s economy grew by less than 0.1 percent in the second quarter after five quarters of contraction, its longest recession since the first oil shock of the 1970s. The marginal growth surprised economists, who had predicted a 0.2 percent contraction, and pushed the New Zealand and Australian dollars to 13-month highs.
•In my backyard: Kapil Sibal, India's minister for human resources, turned down the demand for a 45 percent pay hike from teachers at the Indian Institute of Technology, a string of 15 top-notch engineering schools with a national prestige roughly equivalent to that of Ivy League schools in the US. The teachers plan to fast on Thursday as an escalation of their protest campaign to get a “world-class pay package.” The move won't affect classes, they say.