FDIC wins broad authority to probe banks

Tuesday, July 13, 2010


FDIC wins broad authority to probe banks

Federal bank regulators have agreed to give the Federal Deposit Insurance Corp. unlimited authority to investigate banks, clarifying the agency's power after questions about it during the financial crisis.

The agreement between the FDIC, the Federal Reserve and the Treasury Department clearly spells out the FDIC's authority to make special examinations of banks. It updates a 2002 agreement, which blocked the FDIC from examining banks that were deemed financially healthy by their primary regulators, among other restrictions.

The FDIC, which takes over banks that fail, has said it lacked access to information needed to evaluate banks' risk. Since the start of last year, 230 U.S. banks have failed amid mounting losses on loans and the toughest economic climate since the 1930s. The failures have sapped billions of dollars out of the deposit insurance fund, which fell into the red last year. Its deficit stood at $20.7 billion as of March 31.

-- Associated Press


Alcoa returns to profit with stronger sales

Alcoa said Monday that it posted a second-quarter net income of $136 million, reversing a year-earlier loss of $454 million, as aluminum sales picked up in commercial vehicles, packaging and construction markets.

The Pittsburgh manufacturing giant said revenue rose to $5.19 billion from $4.24 billion. The results topped estimates from analysts surveyed by Thomson Reuters.

The U.S. aluminum producer said improved demand helped offset a 1 percent drop in aluminum prices. Because of its varied customer base, from beverage can makers to airplane builders, Alcoa's quarterly performances can give insight into developing economic trends.

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