The news at a glance

Banking: A new world order; Smart phones: Apple loosens up on apps; Deals: Hertz bid seems to win Dollar Thrifty; Biotech: Embattled Genzyme sells testing unit; Investigations: HP under the microscope

Banking: A new world order

“In one of the most important reforms to emerge from the financial crisis,” negotiators from 27 of the world’s largest economies have hammered out new rules requiring banks to increase their capital cushion against losses, said Brooke Masters in the Financial Times. The rules require large banks to hold capital reserves equal to 7 percent of their common equity, or even more if their portfolios of loans and securities are deemed high-risk. Most large American and European banks can already meet the 7 percent requirement, which will be phased in over a six-year period beginning in 2013, without raising additional equity capital by tapping the stock market.

Banks are cheering the new rules—a sure sign they’re not tough enough, said Alen Mattich in WSJ.com. The banks, which lobbied regulators to ensure that the rules “will be imposed only very gently over eight years or so,” are so pleased with their success that they’re already back to handing out “boom-time” bonuses. Those aren’t the actions of people worried that the new rules will clip profits. “In other words, bankers, as ever, are the biggest winners to come out of the disaster they were so instrumental in creating.”

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE
https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

Smart phones: Apple loosens up on apps

With competition heating up in the smart phone market, Apple has relaxed its rules for developers who make apps for the iPhone, said Harry McCracken in PCWorld.com. Reversing course, Apple will now allow apps based on Flash technology, making it easier for developers to convert Flash applications that were originally created for other smart phones. Apple will also allow developers to use third-party ad networks, such as Google’s AdMob, to embed ads in their programs. Apple had previously discouraged developers from using competitors of its own iAds network.

Deals: Hertz bid seems to win Dollar Thrifty

Hertz Global Holdings appears to have won the bidding war for rival car-rental firm Dollar Thrifty, said Robert Daniel in Marketwatch.com. Hertz’s latest bid of $50 a share tops Avis’ early-September bid of $47.15, which in turn had bettered Hertz’s earlier proposal of $41 a share. Hertz is eager to add Dollar Thrifty’s budget-priced offerings to its product range. “To ease antitrust concerns about the deal, Hertz said it would shed Advantage Rent-a-Car,” which, like Dollar Thrifty, caters to the economy market.

Biotech: Embattled Genzyme sells testing unit

Genzyme, a biotechnology company battling a takeover by French drug giant Sanofi, said this week it would unload its genetic-testing unit to Laboratory Corporation of America, said The Boston Globe. Lab Corp. will pay $925 million for the unit. The sale is aimed at boosting Genzyme’s stock price and forcing Sanofi either to abandon or raise its $18.5 billion offer, which Genzyme says is too low.

Investigations: HP under the microscope

The U.S. Justice Department and the Securities and Exchange Commission are investigating possible bribery of Russian officials by Hewlett-Packard executives, said Joseph Palazzolo in The Wall Street Journal. HP disclosed that the U.S. has joined a German investigation of payments made to secure a $44.5 million contract with Russia’s federal prosecutor’s office, as well as other transactions. The revelation continues a streak of bad publicity for HP, which has been embroiled in a high-profile row with its ousted CEO, Mark Hurd.

Explore More