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 Thu, Sep 17 1992 Date: Thu, 17 Sep 92 04:53:17 EDT Message-ID: 09-17 0000 DECISIONLINE: Banking & Economy USA TODAY Update Sept. 17, 1992 Source: USA TODAY:Gannett National Information Network MONETARY SYSTEM FALLS APART: The European currency system exploded Wednesday, hurling the British pound into limbo and shrouding financial markets in chaos. Blasted apart: The European Monetary System, which pegs the value of most major European currencies to the German mark. Britain was forced to beat a retreat from the system Wednesday as speculators drove the pound below its minimum EMS mark exchange rate. BRITISH POUND TAKES A DIVE: Britain's central bank, the Bank of England, raised a key interest rate twice Wednesday from 10% to 12% and then to 15% in a futile bid to slow the pound's decline. It also intervened in currency markets, reportedly spending nearly 40% of its foreign-currency reserves to buy pounds. Other currencies fell into danger Wednesday, including Sweden's, Italy's and Spain's. FORMER S&L CHIEF PLEADS GUILTY: Robert K. Hartmann, a former director of Polifly Savings & Loan Association, has pleaded guilty to concealing and disguising his interest in nine companies that borrowed $58 million from the thrift. Hartmann pleaded guilty to obstruction of justice and bank fraud, according to a statement from the United States Attorney's Office. SEVEN CHARGED IN TRADING: The Securities and Exchange Commission Wednesday charged seven people with insider trading of Pillsbury Company shares. The SEC said the people traded in Pillsbury shares and call option contracts in 1988 while knowing material information about Grand Metropolitan Plc's planned $60-a-share tender offer for the company, according to Bloomberg Business News. INDUSTRIAL PRODUCTION DROPS: Industrial production fell 0.5% last month, the steepest drop since a 0.7% decline in January, the Federal Reserve says. Although part of the decline was attributed to Hurricane Andrew and a strike at a General Motors parts plant, output at mines, factories and utilities still fell when those events were excluded. In July, production rose 0.6% after falling 0.4% in June. REVENUE CONTINUES TO RISE: The Commerce Department says business revenue rose 0.8% in July to a record level, but were still just 3.6% ahead of a year earlier. Business revenue totaled a seasonally adjusted $559 billion vs. $554 billion in June. Revenue fell 0.2% in May, the only decline this year. Meanwhile, business inventories climbed to $833 billion in July from $832 billion in June. WORLD ECONOMY SLATED TO GROW: The International Monetary Fund says the world economy will grow 1.1% this year, and 3.1% next year. The IMF says high European interest rates and currency exchange volatility shouldn't effect the global economy unless they persist. Growth fell to 0.6% last year from 2.4% in 1990. GREENSPAN SEES SLOW INFLATION: Federal Reserve Board Chairman Alan Greenspan said Wednesday that a Fed economic model called P shows that the economy is in the middle of a "significant slowing in trend inflation." Greenspan was responding to the Senate's inquiries into why long-term interest rates have declined so little compared to Fed moves to push short-term rates down. SEC TO ALLOW SHAREHOLDER PLAN: The Securities and Exchange Commission said Wednesday it will allow a proposal to increase shareholder authority over company executives into ITT Corp.'s 1993 proxy statement, according to Bloomberg Business News. The proposal came in a May 6 letter to ITT from three individuals who said they were company shareholders. Their proposal recommends a change in company by-laws. DOW DOWN; TREASURY BONDS MIXED: The Dow Jones industrial average fell 8.11 points to 3319.21 Wednesday. The NASDAQ composite index lost 1.97 points to 585.89. The yield on 30-year Treasury bonds rose to 7.33% from 7.31%. The discount rate on three-month Treasury bills fell to 2.89% from 2.92%. Light sweet crude oil rose 21 cents to $22.39 a barrel on the N.Y. Merc. GOLD, SILVER RISE: Gold prices rose on the chaos in the currency markets Wednesday. At the Commodity Exchange, gold for current delivery cost $349.80, up $3.40. Republic National Bank quoted the spot price of gold at $349.20, up $3.20. Silver bullion was unchanged at $3.83 in London. On the Comex, silver for current delivery fetched $3.821 an ounce, up 1.5 cents. DOW JONES OPENS ON DOWNSWING: The Dow Jones average of 30 industrials opens at 3319.21 Thursday after closing down 8.11 Wednesday. The New York Stock Exchange composite opens at 231.07, down 0.07. The American Stock Exchange market value opens at 385.52, down 0.21. The NASDAQ OTC composite opens at 585.89, down 1.97. DOLLAR OPENS UP OVERSEAS: The dollar opens up on Thursday. It opens at 0.559 British pounds, up from 0.535; 5.174 French francs, up from 5.035; 1.520 German marks, up from 1.4888; and 125.35 Japanese yen, down from 124.15. (As of 3 p.m. Wednesday. 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 downdate (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