Economy

Brazil cuts taxes in face of economic downturn

Brazil cuts taxes in face of economic downturn Brasilia  - The Brazilian government enacted additional tax cuts on Monday in the face of shrinking forecasts for gross domestic product amid the global economic downturn.

The move came after the country's central bank on Monday reduced its economic outlook for GDP to 1.2 per cent for the year from 3.2 per cent.

Finance Minister Guido Mantega announced a reduction of taxes on building materials and an extension of a tax break on cars. The government hopes to make up for the expected tax shortfall by increasing cigarette taxes to 30 per cent.

NEWS FEATURE: Bank bail-out raises doubts about Spain's economy

Bank bail-out raises doubts about Spain's economyMadrid  - Spain could "continue being proud" of its financial system, Economy Minister Pedro Solbes said Monday, one day after the government announced its decision to bail out the savings bank Caja Castilla La Mancha (CCM).

It was the first such rescue in Spain during the global financial crisis, and made the government's constant reassurances about the solidity of the banking system ring increasingly hollow.

HRE repeats call for state support amid talk of government takeover

Hypo Real EstateMunich  - Ailing mortgage lender Hypo Real Estate (HRE) needs further capital injections from the German state after a loss of more than 5 billion euros (6.7 billion dollars) in 2008, chief executive Axel Wieandt said Sunday.

HRE had confirmed Saturday that the German government is to recapitalize the bank with an initial 8.7-per-cent share purchase.

Wieandt was not able to confirm how much capital the bank needed,

but said this was to be discussed with government bank bail-out agency SoFFin, which is expected to take long-term control to rescue the mortgage lender.

German government to buy Hypo Real Estate shares, takeover planned

German government to buy Hypo Real Estate shares, takeover planned Munich  - The German federal government is to buy shares of ailing mortgage lender Hypo Real Estate (HRE), the bank announced Saturday.

The state is to initially recapitalize the Munich-based financier by purchasing an 8.7-per-cent stake in the business, HRE said in a statement.

In the long term however, the German government bank bailout agency SoFFin is to take complete control of the bank, HRE said.

ROUNDUP: Top bankers pledge cooperation with Obama on economy

President Barack ObamaWashington  - Some of the nation's top bank chiefs told President Barack Obama Friday that they would work with him towards the economic recovery, and agreed on the need for an overhaul of financial market regulations.

"Were all in this together," John Stumpf, the head of Wells Fargo & Co, was quoted as saying by Bloomberg financial news service after the meeting. "Were trying to do the right thing for America."

Obama seeks support from bank executives

Obama seeks support from bank executivesWashington - US President Barack Obama was to court support from banking executives later Friday in an effort to transcend the furious standoff between the public and the industry over bailouts and bonuses.

The meeting at the White House was to include chief executive officers Vikram Pandit of Citigroup Inc, Jamie Dimon of JPMorgan Chase & Co and Lloyd Blankfein of Goldman Sachs Group Inc.

A total of 15 executives from the nation's largest banks were to join the meeting, Bloomberg financial news service reported.

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