Visa shrugs off swipe suit settlement tab
NEW YORK, July 14 (UPI) -- Visa's chief executive officer said the settlement of a U.S. antitrust case will not hurt its earning guidance despite having to pay out more than $4 billion.
CEO Joseph Saunders said Friday the settlement was "in the best interest of all parties" and put the legal battle over "swipe fees" charged to merchants behind them.
"We are comfortable with the terms, which we do not anticipate will impact our current guidance," Saunders said in a statement.
Visa will pay the lion's share of the $7.25 billion settlement announced Friday, CNNMoney said. MasterCard is on the hook for $790 million and a group of major banks will pay lesser amounts.
In addition, Visa and MasterCard agreed to cut their swipe fees – a price merchants pay each time a customer pays with a credit card – while new rules on card usage are implemented, the plaintiffs' law firm said in a statement.
The reduction of the swipe fee is expected to ding Visa another $1.2 billion; however, that did not seem to dissuade Wall Street, which sent Visa shares up 2.5 percent in after-hours trading Friday, CNNMoney said.
Judge will approve Tribune ownership shift
CHICAGO, July 14 (UPI) -- A bankruptcy judge in Chicago said he would approve the acquisition of Tribune Co. by a group of banks and hedge funds.
Judge Kevin Carey said in a memorandum released Friday he would approve the controversial reorganization plan in the near future following some adjustments that will reflect recent court rulings.
Sources told the Chicago Tribune the changes ordered by Carey would be completed quickly.
The newspaper, which is part of Tribune Co., said Carey's blessing comes over various objections from some creditors and will turn the 165-year-old company over to ownership outside Chicago for the first time. The company, which also owns the Los Angeles Times and six other papers, will be turned over to a financial group that includes JPMorgan and is led by Oaktree Capital Management.
Tribune Co's Chapter 11 bankruptcy began in 2008 as the U.S. economy swooned and debt was mounting amid a move to take the company private.
Report: Fed got wind of Libor issue in '08
NEW YORK, July 14 (UPI) -- The U.S. Federal Reserve first heard in 2008 that at least one major bank was reporting false interest rates, documents from the Fed in New York revealed.
A Fed official was told by an employee of British bank Barclays that the institution was "not posting, um, an honest rate" for its London interbank offered rate, or Libor, but only did so because most other global banks were also fudging their public Libor rate.
"Our contacts at Libor contributing banks have indicated a tendency to underreport actual borrowing costs to limit the potential for speculation about the institutions' liquidity problems," Fed officials said in a subsequent report.
The New York Times said the Fed branch in Manhattan was under the direction at the time of Timothy Geithner, who went on to become the current secretary of the treasury. Geithner and other regulators voiced concerns about the accuracy of the Libor rates; however, little was done as the government focused mainly on preventing further erosion of the banking system.
The Fed has said the talk about the sketchy Libor amounted at the time to unsubstantiated "chatter" within financial circles. But Geithner will likely get a chance to elaborate on what went on in 2008 at congressional hearings on the Libor issue later this month.
Spain approves austerity measures
MADRID, July 14 (UPI) -- The Spanish government said the nation is in dire straits as it implements a new round of austerity steps to quell its ongoing financial turmoil.
About 100 demonstrators took to the streets of Madrid Friday at the same time Parliament met to basically rubber-stamp the package of tax increases and spending cuts aimed at lopping $80 billion from Spain's budget deficit.
The approval, which came in the midst of an ongoing recession, includes reduction in unemployment benefits and pay cuts for public workers. The conservative government conceded the steps were painful, but not acting now would cause worse problems down the road.
"Spaniards are living today one of the most difficult and traumatic moments of our history, a crisis which has muted into a daily drama for millions of Spaniards," said Deputy Prime Minister Soraya Saenz de Santamaria.
The vote was met by angry catcalls from civil servants outside the presidential palace who blocked streets and scuffled with police. Marchers told euronews at least one protester was beaten up by police.
Britain's The Daily Telegraph said the public outrage over the austerity plan could simmer until September, when Spain's main labor unions plan to call a nationwide strike.
