OBAMA GETS TOUGH WITH WALL STREET - In a speech on Wall Street yesterday, the US President Barack Obama has hit out at bankers for the risk-taking that led to the financial crisis. Speaking to bank executives, he urged the industry to stop its 'furious efforts' to block tighter regulations, blaming the financial meltdown and the subsequent recession on a 'failure of responsibility' by both Washington and Wall Street. He warned that America faces a repeat of the crisis if new rules are not brought in, to rein in the financial industry. A bill proposing tighter regulation is due to be debated in the US Senate next week.
Art Hogan of Jeffries and Co in Boston, says that at the end of the day, the financial markets evolve in something that works with the new regulations. He says three things are trying to be addressed by the new legislation - the protection of consumers against abuse and deception; a system which is able to dismantle the 'too big to fail' type institutions; and the strengthening of oversight of the derivatives and hedge fund markets in an effort to get more transparency. He says the goals are entirely appropriate. He says that if the bill gets through, Wall Street will not look entirely different. He says there may well be some large institutions which decide to break up, and a separation of commercial and investment banking may occur. The analyst says the last thing the US wants to see is the permitting of reckless risk that does not have an economic benefit, expect for the profits of an investment bank.
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BUSINESS BRIEFS - The Young Entrepreneurs of the Year were named last night at a ceremony in Killarney. The awards, now in their third year, were founded by entrepreneur Jerry Kennelly. The winner of the second level prize is Michael Dillane. He is 16, and a transition year student at CBS in Tralee. The winner at third level was Lisa O'Donoghue, from the University of Limerick. She has invented a way to safely recycle LCDs into valuable computer waste.
*** US software giant Microsoft has reported better than expected net profits of $4 billion for its third financial quarter. Net profit was up 35% from a year earlier, while revenue in the three months to March rose by 6% to a record $14.5 billion. Areas of growth were Windows 7, the Bing search engine and Xbox Live.
*** Online retail giant Amazon has said its net profit for the first three months of this year rose by a better than expected 68% from the same time last year. Its quarterly net profit was $299m and sales increased 46% to $7.13 billion.
*** The Sunday Times Rich List is coming out this weekend. For now we have the pop stars, and among the Irish entertainers making it are the usual suspects - Michael Flatley, Enya, Van Morrison and newcomers Westlife. In the UK, Simon Cowell increased his personal fortune by £45m sterling in the past year. His fellow X Factor judge Cheryl Cole saw her personal wealth increase 150% to £10m.
*** On the currency markets, the euro is trading at $1.3236 cents and 86.08 pence sterling.
