The daily business briefing: June 28, 2017
Another massive ransomware attack causes global disruptions, Yellen sees no new financial meltdown "in our lifetimes," and more
Massive cyberattack causes global disruptions
Hackers struck Europe, South Asia, and the U.S. with a powerful cyberattack on Tuesday, using highly virulent "Petya" malicious data-scrambling ransomware to disrupt companies' and governments' computer systems. Tens of thousands of computers were affected. Ukraine was hit particularly hard. Officials in Ukraine said the attack affected the power grid and government offices, although the country's prime minister said "vital systems" weren't affected. Russia's Rosneft oil company and Danish shipping giant A.P. Moller-Maersk said they narrowly escaped major damage. As with the WannaCry attacks in May, the hackers took over computers, apparently using a program from the National Security Agency, and demanded digital ransom in exchange for returning control. It was not immediately clear who was behind the latest attack.
Yellen sees no new financial meltdown 'in our lifetimes'
Federal Reserve Chair Janet Yellen indicated Tuesday that the U.S. central bank would continue tightening monetary policy given the economy's strengthening, even though some asset prices were "somewhat rich." In her first public remarks since Fed policy makers hiked interest rates by a quarter point on June 14, Yellen said, "We've made very clear that we think it will be appropriate to the attainment of our goals to raise interest rates very gradually." Yellen also said that she hoped that the regulations to prevent another financial crisis would not be unwound, but that she doubted the U.S. would see another nightmare situation like the 2008 crisis "in our lifetimes."
European lenders say Greece on track to exit bailout next year
Greece's European creditors said Wednesday that the country's financial reforms and austerity measures had put it on track to start tapping bond markets by the end of 2016 and exit its bailout program next August. Recent belt-tightening, which included fresh cuts to public pensions and economic reforms, would help the country strengthen its finances further after the bailout program ends. Greece got its first bailout money to avoid defaulting on loans in 2010, when it got effectively locked out of bond markets by the stratospheric interest rates investors were demanding for lending it money. Although it now has enough money to make its debt payments this year, Nicola Giammarioli, Greece mission chief for the eurozone's rescue fund, cautioned that the country's financial future hinges on the government's ability to implement the reforms it has approved. "We are half way," Giammarioli said.
Scottish leader puts off plan for second independence referendum
Scottish leader Nicola Sturgeon told lawmakers on Tuesday that she was putting off plans for a second independence referendum until after the U.K. has negotiated the terms of its exit from the European Union. The first referendum failed, but a majority of Scottish voters supported staying in the EU in last year's Brexit referendum, so Sturgeon in March called for holding a second independence referendum between late 2018 and early 2019 to give Scots an alternative to Brexit. Her party lost seats to pro-union parties in June legislative elections, however, so she conceded that she needed to "reset" her timetable.
Nestle announces $20.8 billion share buyback
Nestle said Tuesday that it will buy back as much as $20.8 billion worth of shares over three years. The announcement came just days after the New York-based activist shareholder Third Point LLC, a hedge fund controlled by billionaire investor Daniel Loeb, disclosed a $3.5 billion stake in the massive Swiss food company and called for "bold action" to boost its performance and launch a stock buyback push. Nestle, maker of Gerber baby food and Perrier water, said it was acting on a review of its priorities that started early this year, not responding to Loeb's activist campaign.