Business digest: Big banks might need to hold more capital, Yellen says

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Posted: Wednesday, April 16, 2014 12:00 am

WASHINGTON — The Federal Reserve may be about to turn more aggressive in its regulation of the financial system.

Fed Chairwoman Janet Yellen suggested Tuesday that current regulatory rules might not be enough to prevent the kind of risk-taking that triggered the 2008 financial crisis and nearly toppled the entire banking system.

She said the largest U.S. banks may need to hold additional capital to withstand periods of financial stress. Nonbanks with deep reaches into the financial system might also need to meet tougher rules, she said. Such firms range from money market mutual funds to private equity and hedge funds.

Yellen told a banking conference in Atlanta that current rules on how much capital banks must hold to protect against losses don’t address all threats. The Fed’s staff is considering what further measures might be needed, she said.

At the same time, Yellen said the Fed would review the likely effects of imposing stricter rules on banks. Banks and their advocates have warned that further tightening bank regulation would lead to reduced lending to businesses and financial institutions and could slow economic growth. — AP

Patent sought for camera in contact lens

Google Inc. has applied for a patent that details a way to fit a camera into a contact lens.

The patent has to do with the tech giant’s smart contact lens project, which was first announced earlier this year. By fitting a camera into a contact lens, users could process all kinds of data that could then be relayed to a connected smartphone.

The patent, which was reported by Patent Bolt, outlines a way that Google could fit a camera into a contact lens without drastically increasing its thickness. A camera on a contact lens could be used to collect data from users’ surroundings, including light, colors, objects, faces and motion, according to the report.

That data could be quickly processed and used to provide users with information on a display within the contact lens. For example, a moving vehicle or the face of a nearby user could be highlighted by the smart contact lens - think “Terminator” vision.

The camera could also expand users’ eyesight. Patent Bolt said the camera could give users a wider view or also be used to zoom in, like a pair of binoculars. — The Los Angeles Times

GM says shake-up not tied to recalls

DETROIT — General Motors is replacing the executives in charge of communications and human resources as it struggles with a string of embarrassing recalls that have led to congressional hearings and federal investigations.

Communications chief Selim Bingol and human resources head Melissa Howell are leaving the company to pursue other interests, the company said.

John Quattrone, who currently is executive director of human resources, will replace Howell, but GM has not yet named a replacement for Bingol, the statement said. The changes are effective immediately.

GM is in the midst of a crisis over safety of some of its older-model vehicles, including 2.6 million small cars worldwide that have been recalled to replace faulty ignition switches.

But GM spokesman Greg Martin said the moves are not linked to the recalls. He attributed them to CEO Mary Barra, who took over in January, making her own hires in key positions. “The changes are part of what any company expects during periods of transition, and Mary is building her own team,” Martin said. — AP

Coca-Cola profits drop along with pop sales

NEW YORK — Coca-Cola sold more drinks in the first quarter, but it wasn’t because of pop.

The world’s biggest beverage maker said Tuesday that its global sales volume for pop fell for first time in at least a decade. The drop was offset by stronger sales of noncarbonated drinks such as juice, and overall volume rose 2 percent.

A stronger dollar contributed to an 8 percent decline in profit for the quarter.

Gary Fayard, the company’s chief financial officer, attributed the decline in sales of pop partly to the timing of Easter, which falls in the second quarter this year instead of the first.

“It’s not as concerning to us as it would look at first pass,” he said. For the full year, Fayard said he expects global pop volume to be positive.

Coca-Cola Co. sells a wide variety of drinks, including Sprite, Minute Maid, Powerade and Dasani bottled water. But the quarterly decline in sales of pop nevertheless underscores the pressures the company is facing around its flagship product, both at home and abroad. — AP

J&J sees 8 percent rise in quarterly profit

A turnaround in Johnson & Johnson’s prescription medicine business fueled by new drugs, combined with reduced production and administration expenses, lifted first-quarter profit by 8 percent.

The world’s biggest maker of health care products beat Wall Street expectations and raised its earnings outlook Tuesday.

The maker of Band-Aids and biologic drugs said net income was $4.73 billion, or $1.64 per share, up from $3.5 billion, or $1.22 per share, a year earlier. — AP

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