Business review from the Economist
Trump taps Quarles as Fed's top supervisor
The Trump administration nominated Randal Quarles to be vice chairman for supervision at the Federal Reserve. Quarles is a former investment manager and Treasury official. He is sympathetic to the industry's push for a lighter regulatory touch and has supported a Republican recommendation to restrict the Fed's flexibility on interest rates by basing those decisions on a mathematical formula.
Janet Yellen told Congress that although inflation remained an uncertainty, the Fed was on course to unwind the asset portfolio that it had accumulated since the financial crisis and to continue with rate rises. The guessing game has already begun about whether President Donald Trump will choose a new chairman of the Fed when Yellen's term is up in February.
The Bank of Canada raised interest rates for the first time in seven years, increasing its benchmark rate by a quarter of a percentage point to 0.75 percent. The central bank said it was responding to strong economic growth. Higher rates could temper a sharp rise in housing prices and in household debt.
Royal Bank of Scotland agreed to pay $5.5 billion to settle claims brought by the U.S. Federal Housing Finance Agency relating to risky mortgage-backed securities that RBS sold between 2005 and 2007. The bank has set aside money to pay for this fine and for another whopping penalty that is expected from the Department of Justice later this year.
Elliott, an activist hedge fund founded by Paul Singer, launched a counter bid for an electricity-distribution company that Warren Buffett's Berkshire Hathaway recently offered to buy for $18 billion. Energy Future Holdings (which used to be known as TXU) has been in a bankruptcy-protection program for three years. The source of its allure is its stake in Oncor, the biggest electricity distributor in Texas, which is independently managed. Elliott is Energy Future's biggest creditor and has a stake in any final deal.
Pearson sold almost half its 47 percent stake in Penguin Random House to Bertelsmann, lifting the German media company's holding in Penguin to 75 percent. Pearson has been selling off its assets in conventional publishing in order to focus on its digital education business.
The share price of Abercrombie & Fitch fell by 20 percent after the fashion retailer said it had not been able to find a buyer for its business.
Marking a retreat from its ambition to become a global entertainment powerhouse, Dalian Wanda, a Chinese conglomerate, struck a deal to sell its 13 tourism projects in China and 76 hotels to Sunac China, a property developer, for $9.3 billion. Wanda's expansion, such as buying cinema chains in the U.S., has been fueled by debt, which it will pay down with proceeds from the sale. The Chinese government warned that the company debts pose a risk to its banking system.
In another big Chinese acquisition, COSCO Shipping offered to buy Orient Overseas, a smaller Hong Kong-listed rival, for $6.3 billion, the latest deal in a wave of consolidation in the shipping industry. COSCO will be the world's third-biggest container line.
Global politics from the Economist
Trump Jr.'s e-mails reveal meeting
The White House denied that there had been any collusion between Donald Trump's election campaign and the Russian authorities after e-mails surfaced of a meeting between Donald Trump Jr. and a Russian lawyer that was billed as "part of Russia and its government's support for Mr. Trump." Trump Jr. met the Russian hoping to obtain incriminating information on Hillary Clinton. Trump Jr. said his father was not aware of the meeting.
Liu Xiaobo, a Chinese political prisoner and Nobel peace laureate, died at age 61. He had been receiving treatment in hospital for liver cancer. Liu was eight years into an 11-year jail sentence for his prodemocracy writings. The government had denied his family's requests that he be treated for his illness abroad.
A federal judge in Brazil found Luiz Inácio Lula da Silva, a former president, guilty of taking a bribe and sentenced him to almost 10 years in prison. The judge found Da Silva guilty of receiving a beachside apartment in the state of São Paulo worth nearly $700,000.
Iraq's prime minister, Haider al-Abadi, visited Mosul to mark its liberation from the Islamic State of Iraq and Syria. A few small pockets of ISIS resistance remain in Mosul. The Syrian Observatory for Human Rights said it believes the leader of ISIS, Abu Bakr al-Baghdadi, has been killed. But rumors of his death have been reported many times before and there is still no independent confirmation that he is dead.
Chinese ships set sail for Djibouti carrying troops that will open China's first overseas military base.
