Washington - Federal Reserve Chairman Ben Bernanke on Tuesday outlined a broad overhaul of how US financial institutions should be regulated, calling on policymakers to begin remaking the system even as they battle the current economic downturn.

Bernanke said the focus should be on financial firms of "systemic" importance to the entire system and whose failure could lead to a complete collapse of the economy.

Brussels  - European Union finance ministers Tuesday agreed to allow member states to permanently reduce VAT rates in labour- intensive sectors such as catering or cleaning, diplomats said.

The deal, brokered by the Czech presidency of the EU with the help of the European Commission, was expected to end months of wrangling about the effectiveness of such a measure.

While some member states had insisted it would help create new jobs at a time of economic crisis, others had argued it would merely result in a fall in tax revenues.

Geneva  - The sub-prime mortgage crisis has exposed the crisis in governments' housing policies and could still hit the middle classes, the United Nations' expert on urban planning said on Monday.

Sub-prime mortgages, given by lenders to people who could not afford them, are widely blamed for triggering the meltdown in US banks and the global liquidity crisis and economic downturn.

Brussels - Eurogroup finance ministers were to meet in Brussels on Monday evening amid growing concerns that the European economy may get stuck in recession until 2010, shedding some 6 million jobs in the process.

Latest projections from the European Central Bank (ECB) suggest euro area gross domestic product (GDP) could shrink by up to 3.2 per cent this year, far more than previously expected.

GDP could either fall by 0.7 per cent or rise at the same rate in 2010, the ECB said.

Vilnius  - Lithuania's central bank intervened Monday to quell devaluation jitters that have gathered pace in the Baltic state in recent days.

After a weekend during which currency exchange offices reported unusually strong demand for foreign currency, Reinoldijus Sarkinas, governor of the Bank of Lithuania, declared that there was no plan to change the current exchange rate of the national currency, the litas.

New York  - Business partners of the insurance giant AIG have, since the firm was bailed out by the US government in September 2008, received some 50 billion dollars in payments, the Wall Street Journal reported on Saturday.

Beneficiaries of bail-out funds from the firm number some two dozen, including the Goldman Sachs group and Germany's Deutsche Bank AG, the paper said.

Goldman Sachs and Deutsche Bank each received some 6 billion dollars in payments between September and December 2008, to cover exposures they had at the failing insurer.