SEC: Schapiro exits with mixed record
The head of the Securities and Exchange Commission, Mary Schapiro, announced that she will step down this month after four turbulent years, said Scott Patterson and Jean Eaglesham in The Wall Street Journal, and she leaves a number of regulatory issues unresolved. Schapiro helped salvage the agency’s reputation after its failure to spot the Bernard Madoff fraud, and she oversaw “one of the busiest rule-writing periods” in the SEC’s history. But the agency has struggled on her watch to advance on several important fronts, including regulating the $2.6 trillion money-market industry and dealing with the sometimes disastrous effects of high-speed trading.
Schapiro leaves behind “a regulatory body that is paralyzed by partisanship,” said Peter Coy in Bloomberg Businessweek. With her departure, the five-member commission will have just four members, two Democrats and two Republicans—a recipe for gridlock. Democratic commission member Elisse Walter has been tapped to succeed Schapiro as chairman for now, but the White House still has to nominate a new commission member, perhaps as chairman. The resulting uncertainty makes regulatory progress even less likely. “With the 2–2 division, in many ways the best we can hope for in the short term is sort of a stalemate,” said consumer advocate Barbara Roper.
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Economy: OECD warns of new global recession
According to a “grim new forecast,” the European debt crisis and the U.S. fiscal cliff risk plunging the world into a new recession, said Don Lee in the Los Angeles Times. The Paris-based Organization for Economic Cooperation and Development said this week that it was slashing its projection for growth in gross domestic product across its 34 member states, which include the U.S., Japan, and the euro zone, to just 1.4 percent next year, down from 2.2 percent six months ago. Governments must provide more stimulus, the think tank said, in order to avoid a major downturn.
Euro crisis: Greece gets critical loans
European financial leaders agreed to give Greece another infusion of emergency aid this week, said Nicolas Paphitis in the Associated Press. The country will receive $57 billion in loans beginning this month, and an interest rate cut will reduce its debts by about $52 billion. But critics say the latest agreement will do little to fix the country’s stricken economy, which is about to enter its sixth year of recession. “It is just one more big kick of the can down the road,” said analyst Gary Jenkins.
Tech: Facebook revamps privacy policy
Changes to Facebook’s privacy policy sparked a hoax chain letter that went viral on the social network this week, said Hayley Tsukayama in The Washington Post. Users were led to believe that by simply posting the text, they could retain copyright privileges over their own pictures and content. In fact, however, under Facebook’s terms and conditions, all users give the site permission to use information about them. And under privacy changes unveiled last week, Facebook can now “obtain data about users from affiliates and advertising partners to improve the quality of ads shown on the site.”
Companies: Mega mining merger approved
European regulators gave the green light last week to Glencore International’s $32 billion takeover of mining company Xstrata, said Mark Scott in The New York Times. The deal between Glencore, a trader of commodities from copper to cotton, and Xstrata, which mines coal, zinc, and other metals, will create a mining giant worth some $80 billion, and has taken more than nine months of often “tortured negotiations.” Chinese and South African antitrust authorities must still approve the deal.
