Markets

Financial Roundup: $4 Trillion for Bad Bank?, Cuomo Eyes Merrill Bonuses, 401(k) Matches Cut

By Peter Galuszka

Updated on: January 30, 2009 / 10:46 AM EST / MoneyWatch

"Bad bank" to cost $4 trillion? -- Goldman Sachs economists estimate that it could take $4 trillion to establish a "bad bank" to buy toxic loans. The number could shrink if the bank were limited to certain loans or banks. [Source: Reuters]

Cuomo may go after Merrill bonuses -- New York Attorney General Andrew Cuomo may demand return of the $4 billion in bonuses that Merrill Lynch paid just as the firm was being acquired by Bank of America. The prosecutor is probing if paying the bonuses in December instead of January as usual violated state securities laws. [Source: Bloomberg]

More firms cut 401(k) matches -- More than 40 employers have cut costs by stopping company matches on employee 401 (k) plans. Some firms such as American Electric Power have kept the payments for tax reasons and another, Dollar Thrift Automotive Group, has reinstated matches. [Source: CFO.com]
Contactless credit card slow in U.S. -- American lending firms have been slow to adopt the Europay, MasterCard, Visa (EMV) security standard which offers greater protection for card holders. Banks and merchants don't want to pay extra for the cards that have embedded chips and require a cusomter PIN number. [Source: American Banker]

Life insurers lose extra cushion -- The National Association of Insurance Commissioners has voted against propping up insurers by allowing thinner financial cushions. The NAIC said it didn't see a crisis in the industry. [Source: The Washington Post]
Is Fidelity Investments on the block? -- Rumors are swirling that Fidelity, the venerable Boston investment house, is up for sale because of large layoffs and the purchases of houses in the New York area by top executives. Chairman Edward C. Johnson III has tried to reassure employees but has stopped short of denying a possible sale. [Source: Boston Globe]

Bye-bye Sandy -- Sanford "Sandy" Weill, creator of Citigroup, is ending his 10 year consulting contract with the bank early at his request. [Source: Money.AOL]