Having a felon in a political leadership role is a problem even when he hasn’t been caught, but after several of his convictions have been upheld by the supreme court, it becomes especially awkward. This is the situation that Italy is wrestling with today. With Berlusconi heading off to jail, perhaps to be convicted again before he is released, the character of Italy’s government will have to change, and with any luck, it will come to be less defined by criminal ties between politicians and banks.
Detroit may be in bankruptcy for just two or three years under a roadmap proposed by the bankruptcy court. One of the early issues the court will deal with is the question of whether the city can bow out of unfavorable swaps contracts.
Fraudulent sales of payment protection insurance in the United Kingdom brought banks more than £18 billion in illegal profits that they now are preparing to refund to customers. That’s according to the latest tallies, which include £4 billion in charges at Barclays and more than £7 billion at Lloyd’s, the latter including a £4 million fine for initially refusing to pay some claims it was obligated to pay. Similar schemes in the United States have led to refunds ordered by the FDIC this year.
Federal student loan interest rates will be raised to more than 7 percent under a plan approved in Congress this week. Congress was working on a way to roll back the doubling of the student loan interest rate that went into effect July 1, but the final compromise cuts rates only for a very limited time. The temporary rate cuts will allow some college seniors to finish their studies, but the higher future rates will prevent many would-be college students from getting started in their studies.
The United States was due for a bank failure, and it took place in hard-hit Fort Myers, Florida, where state banking regulators closed First Community Bank of Southwest Florida and Community Bank of Cape Coral. The single bank, operating under two names, had seven locations and $254 million in deposits. St. Petersburg-based C1 Bank is taking over the deposits and purchasing the assets.
The failed bank had had problems with regulators going back to 2005, when it was cited for having too much of its assets in real estate construction loans. It was a financial imbalance that the bank never recovered from.