Big foreign banks operating in the United States will have to keep far more money in their reserves to reduce risks to the financial system, pulling them in line with their American competitors, the Federal Reserve said Tuesday.
The board voted 5 to 0 to adopt the stricter regulations meant to limit the risks posed by foreign firms, which have been lending aggressively in the United States but setting aside far less to cover losses.
“The traditional framework for supervising and regulating major financial institutions and assessing risks contained material weaknesses,” said Fed Chair Janet Yellen, presiding at her first public meeting of the central bank’s board. “The final rule would help address these sources of vulnerability.”
Foreign banks have fought hard against the rule since it was proposed in 2012, warning that it would result in higher costs for the millions of U.S. businesses that rely on their services. Banks based overseas issue about 25 percent of all commercial loans in the nation.
Regulators relaxed some elements of the final rule. Instead of banks with $10 billion in assets being required to establish so-called holding companies as originally proposed, regulators raised the threshold to at least $50 billion in assets.
— Danielle Douglas
The company behind “Candy Crush Saga” is going public, hoping the popularity of its addictive online game will translate into sweet returns for itself and its investors.
King Digital Entertainment, which also makes lesser-known games such as “Bubble Witch Saga” and “Pet Rescue Saga,” did not disclose how many shares it expects to offer in the IPO or a projected price range for the stock. In papers filed Tuesday with the Securities and Exchange Commission, the company said it hopes to raise as much as $500 million in the offering. The amount could change in the coming weeks as the company and the IPO’s underwriting banks gauge investor demand.
“Candy Crush,” which involves moving candies to make a line of three in the same color, was the most downloaded free app of 2013 and the year’s top revenue-grossing app. It has been downloaded more than 500 million times since its launch in 2012. The basic games are free, but players must pay for add-ons or extra lives.
The game’s success helped King replace Zynga — maker of “FarmVille” and “Mafia Wars” — as the No. 1 producer of games played on Facebook.
— Associated Press
●Nestle is voluntarily recalling an unspecified number of “Philly Steak” and its “Croissant Crust Philly Steak and Cheese” Hot Pockets in certain sizes. Nestle says the products may have been affected by a meat recall by Rancho Feeding that was announced last week. Rancho is recalling more than 8.7 million pounds of beef products after regulators said that it processed diseased and unhealthy animals without a full inspection. Nestle said a small quantity of meat from Rancho was used at a California production facility that makes Hot Pockets.
●Costs related to Target’s massive data breach have exceeded $200 million for financial institutions, according to data collected by the Consumer Bankers Association and the Credit Union National Association. The two trade associations said 21.8 million of the 40 million compromised credit and debit cards have been replaced.
●Generic drugmaker Actavis said Tuesday that it would buy Forest Laboratories for about $25 billion in cash and stock, giving it a major focus on higher-margin, branded treatments for Alzheimer’s, hypertension and other disorders. The deal also means a major payday for activist investor Carl Icahn, who stands to earn almost $1.7 billion in gross profits on his 11 percent stake.
●Coca-Cola announced a $1 billion cost-cutting program as falling soft-drink demand in North America and slowing growth overseas contributed to an 8.4 percent drop in quarterly profit. Fourth-quarter net income slid to $1.71 billion, from $1.87 billion a year earlier, Atlanta-based Coca-Cola said. Sales fell 3.6 percent, to $11 billion, trailing projections.
— From news services
●8:30 a.m.: Producer price index and housing starts for January released.
●2 p.m.: Federal Reserve releases minutes from its January policy meeting.
●Earnings: Marriott International, Revlon, Safeway, Tesla.