Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!news.media.mit.edu!americast.com!americast.com!usa-post Newsgroups: usa-today.banks,americast.usa-today.banks From: usa-post@AmeriCast.Com Organization: American Cybercasting Approved: usa-post@AmeriCast.com Subject: banks Wed, Sep 16 1992 Date: Wed, 16 Sep 92 04:36:01 EDT Message-ID: 09-16 0000 DECISIONLINE: Banking & Economy USA TODAY Update Sept. 16, 1992 Source: USA TODAY:Gannett National Information Network RATE CUTS SIGNAL COOPERATION: Cheers over Germany's interest-rate cuts faded quickly Tuesday. Most international economists say this week's rate cuts by Germany's central bank are a sign that policy makers will work together when it suits their own nations' needs. If their actions also help others, that's fine. But cooperation like that seen in the mid-1980s is unlikely, experts say. G7 MONEY EXECUTIVES TO GATHER: This weekend in Washington, G7 central bankers and finance ministers meet again at one of their semi-annual gatherings. Although the session follows the Bundesbank's rate cut, which averted a European currency crisis, economists doubt the meeting will produce massive European cooperation. For one reason, Germany still is wrestling with inflationary pressures. FDIC KILLS MAJOR HIKE: The Federal Deposit Insurance Corp. Tuesday decided against substantially increasing insurance fees paid by banks, voting instead to raise fees on only about one-fourth of the weakest institutions. The board voted 4-0 to raise premiums only for less healthy institutions posing a greater risk to the federal insurance fund, which protects deposits up to $100,000 per account. FEES RAISED ON RISKY BANKS: The Federal Deposit Insurance Corp. voted Tuesday to keep 1993 premiums for about 75% of the banking industry - 9,115 institutions - at 23 cents per $100 in deposits. Rates for the worst 222 banks will rise to 31 cents. The remaining banks will pay 26 cents, 29 cents or 30 cents. The structure will raise an estimated $6.35 billion, up from $5.75 billion in 1992, the FDIC said. ECONOMISTS FAVOR BUSH'S PLAN: Arkansas Gov. Bill Clinton probably will be the next president, even though George Bush's economic plan is more likely to spur growth and keep inflation low. That's the consensus of economists gathered this week in Dallas. By a 2-to-1 margin, 243 members of the National Association of Business Economists surveyed last month say Clinton will win, but 60% prefer Bush's economic plan. DON'T WORRY ABOUT FLUCTUATIONS: Sharp stock market fluctuations on the heels of Germany's reluctant interest-rate cuts aren't anything to worry about, analysts say. Sharp pullbacks in European markets and the U.S. reflect some second-guessing about how soon the Germans will cut rates again. German officials warned that there is no room to cut again. But a drastic cut will be needed, says expert Suresh Bhirud. FDIC VOTES TO RAISE PREMIUMS: The Federal Deposit Insurance Corp.'s board Tuesday won one for President Bush with its vote to raise bank and thrift deposit insurance premiums by less than half the amount suggested in May. The board approved rules that will base premium payments on risk. The average deposit insurance premium will got up to 25.4 cents per $100 from 23 cents. Proposed in May: 28 cents. MOST BANKS WON'T SEE HIKE: Most banks won't see an increase in insurance premiums despite the vote Tuesday by the Federal Deposit Insurance Corp.'s board. Premium payments will be based on risk, and 75% of banks and 51% of the nation's deposit base won't see an increase, said Stephen Steinbrink, Acting Comptroller of the Currency. The increase is designed to bring more money into the depleted Bank Insurance Fund. ACCOUNT TRADE DEFICIT TRIPLES: The current account trade deficit, the broadest measure of U.S. trade, tripled in the second quarter to $17.8 billion from $5.9 billion the first quarter, the Commerce Department says. The surge in imports in the quarter signals that the U.S. economic recovery is ahead of its major trading partners, economists say. Imports rose to $132 billion from $125 billion in the first quarter. INFLATION STILL IS QUIET: The weak economy kept inflation controlled last month despite a surge in produce prices and large increases for tobacco and school tuition. The Consumer Price Index rose a seasonally adjusted 0.3% for the month after July's even weaker 0.1% advance, the Labor Department said. For 1992 so far, consumer prices have risen at an annual rate of just 2.9%. RETAIL SALES DIVE: Retail sales fell by 0.5% in August, the poorest showing since a 1.2% decline in March, the government said Tuesday. While sales were revised upward for June and July, analysts said there still was very little strength in America's retail sector. Economists were looking for a slight decline of around 0.1% because of weak auto sales. DOW TAKES A DIVE: The Dow Jones industrial average dropped 48.90 points to 3327.32 Tuesday. The NASDAQ composite index fell 6.37 points to 587.84. The yield on 30-year Treasury bonds rose to 7.31% from 7.25%. The discount rate on three-month T-bills rose to 2.92% from 2.89% at Monday's auction. Light sweet crude oil lost 13 cents to $22.18 a barrel on the N.Y. Mercantile Exchange. GOLD MIXED, SILVER UP: Gold prices fell marginally in the United States Tuesday after rising overseas. Silver was up. On the Commodity Exchange, gold for current delivery fell 40 cents to $346.40. Republic National Bank said gold ended at $346.00, down 45 cents. Silver bullion rose in London to $3.83 from $3.79. On the Comex, silver for current delivery fetched $3.806 an ounce, up 3.5 cents. DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens at 3327.32 Wednesday after closing down 48.90 Tuesday. The New York Stock Exchange composite opens at 231.04, down 2.69. The American Stock Exchange market value opens at 385.73, down 4.32. The NASDAQ OTC composite opens at 587.86, down 6.35. DOLLAR OPENS MIXED OVERSEAS: The dollar opens mostly up on Wednesday. It opens at 0.535 British pounds, up from 0.529; 5.051 French francs, up from 5.038; 1.488 German marks, up from 1.4887; and 124.2 Japanese yen, down from 124.4. (As of 3 p.m. Tuesday. Source: First American Bank of New York.) 24-HOUR TELEPHONE INFORMATION: USA TODAY Money Hot Line. 95 cents a minute. 1-900-555-5555. Banking & Economy Editor: Beth Mann. (1-919-855-3491) Making copies of USA TODAY Update (Copyright, 1992) for further distribution purposes violates federal law. This article is copyright 1992 Gannett News Service. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM