Business this week

Print edition | The world this week Oct 26th 2017

Wall Street scored a big victory when the Senate scotched a proposed law that
would have allowed customers of banks and credit-card companies to sue for
malpractice through class-action lawsuits. The measure was put forward by the
Consumer Financial Protection Bureau, an agency created under the Dodd-Frank
reforms which has a rocky relationship with the banking industry. Its rule would
have rewritten the requirement in retail-finance contracts that customers seek
redress for grievances through arbitration, rather than the courts. But the Treasury
had criticised the proposal, for curtailing the freedom of contract.

A helping hand

Latest updates
The Indian government announced a
The shifting toll of Americas drug epidemic $32bn plan to recapitalise state-controlled
GRAPHIC DETAIL
banks. The banks, which hold two-thirds of
Independents stampede into Mexicos
presidential election Indias banking assets, have been blamed
AMERICAS
for dragging down economic growth after a
The European Central Bank starts its exit from decade of unrestrained lending to industry,
quantitative easing
BUSINESS AND FINANCE which has put a dent in their balance-
sheets and constrained consumer lending.
See all updates
See article
(http://www.economist.com/news/finance-and-economics/21730673-lenders-will-
finance-their-own-bail-out-apparently-india-recapitalises-its) .

David Rubinstein and William Conway stepped back from their roles as co-chief
executives at Carlyle Group, a global investment firm that they helped to found in
1987. It is the second departure of the original management at a big private-equity
firm this year following KKRs reshuffling of its senior ranks during the summer.

A former senior banker at HSBC was found guilty by a jury in New York of
defrauding a client in a $3.5bn currency trade. Mark Johnson is the first banker to
be convicted in the American Department of Justices lengthy transatlantic
investigations into the forex market.

Following revelations that Russian provocateurs had placed divisive ads on

American social media during last years election, Twitter announced changes to
make such ads more transparent, and to allow users to see which ones are targeting
them. A bill in Congress, the Honest Ads Act, would tighten the regulations for
online political ads, subjecting them to the same rules as those for TV.

General Electrics share price sank to a near five-

year low amid speculation that it might cut its
dividend, after reporting poor quarterly earnings
and reducing its outlook for the year. The blue-chip
conglomerates share price is the worst performer
this year on the Dow Jones Industrial Average. It
hopes to turn that around when it unveils a plan in
mid-November to reduce its costs.

The rand fell sharply against the dollar after South

Africas new finance minister delivered a budget that forecast weaker economic
growth of 0.7% for the year and a higher deficit of 4.3% of GDP.

All eyes on the bank

The welcome news of better-than-expected growth figures in Britain was tempered
by the increased likelihood of a rise in interest rates. GDP expanded by 0.4% in the
third quarter compared with the previous three months. With inflation at 3%, the
Bank of England has hinted that it will raise rates for the first time since 2007,
possibly at its meeting on November 2nd. That would leave many households
struggling; mortgage debt and consumer credit is running close to 140% of income.
See articles here (http://www.economist.com/news/britain/21730649-no-one-
knows-quite-how-households-will-react-first-rate-rise-decade-higher-interest)
and here (http://www.economist.com/news/leaders/21730648-british-economy-
highly-sensitive-increases-interest-rates-britains-should-wait) .

General Motors reported a $3bn loss for the third quarter, mostly because of a
$5.4bn charge it booked related to the sale of its Opel and Vauxhall brands in
Europe. It also recorded lower revenues in North America after it cut production to
reduce its stock of cars, which reached a ten-year high over the summer.

Jim Hackett shook up the senior ranks at Ford, five months after taking over as
chief executive. Among those leaving is John Casesa, who oversaw the adoption of
new technologies. Ford has lagged its rivals in the electric-vehicle revolution,
something which Mr Hackett vows to change.

The decision by Oleg Deripaska to float his aluminium and renewable energy
business, EN+, in a listing in London was taken as a sign of renewed investor
interest in Russia. It will be the first Russian IPO on the London Stock Exchange
since Russias annexation of Crimea in 2014, which prompted a wave of financial
sanctions against the country.

Withered on the vine

The worlds production of wine will fall this year to its lowest level since 1961,
according to the International Organisation of Vine and Wine, because of bad
weather that has damaged the grape crop in Italy, France and Spain. Global output
will drop by 8% compared with 2016, which leaves some 3bn fewer bottles of wine
to sip. The recent wildfires in northern California will probably not have had too
much of an effect on American production (most of the states wine grape is grown
in the Central Valley).