BUSINESS BRIEFS
FDIC raises banks' fees to boost insurance fund
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WASHINGTON — Facing a cascade of bank failures depleting the deposit insurance fund, federal regulators yesterday raised the fees paid by U.S. financial institutions and levied a hefty emergency premium in a bid to collect $27 billion this year.
The Federal Deposit Insurance Corp. now expects that bank failures will cost the insurance fund around $65 billion through 2013, up from an earlier estimate of $40 billion. The bank failures, 14 already this year following 25 last year, reflect the ravages of rising unemployment and falling home prices that have sent loan defaults soaring.
The FDIC board said the economic crisis, which has caused the insurance fund to drop to its lowest level in nearly a quarter-century, also warranted extending the plan to rebuild the insurance fund from five years to seven.
"We're taking steps today to ensure that the deposit insurance system remains sound," FDIC Chairman Sheila Bair said at a board meeting to vote on the changes. "These steps are necessary because banks — and not taxpayers — are expected to fund the system."
THEATER COMPANY RESTRUCTURES DEBT
LOS ANGELES — Billionaire media mogul Sumner Redstone's family theater chain, National Amusements Inc., said yesterday it has reached an agreement in principle to restructure $1.46 billion worth of debt.The announcement partially resolves a looming question about the company's finances, and potentially relieves an issue weighing down the shares of Viacom Inc. and CBS Corp., which Redstone controls through National Amusements.
The company said the agreement will extend the maturity of the existing debt to Dec. 31, 2010, with certain repayments due in late 2009 and 2010. The debt would be secured by substantially all of National Amusements' assets.
The company owns more than 1,500 movie theater screens in the U.S., U.K., Latin America and Russia, the land beneath them and large chunks of CBS and Viacom shares.
CEO OF SONY WILL BE PRESIDENT, TOO
TOKYO — Sony sent a message of change yesterday in centering power in Chief Executive Howard Stringer, who will also become president and gain greater say over its core electronics business as Japan's iconic electronics maker tackles a painful global slump.Welsh-born American Stringer, the first foreigner to head Sony Corp., replaces Ryoji Chubachi, who steps down as president April 1 but remains on the board as vice chairman to oversee quality and ecological strategy, and support the new management team.
Chubachi, 61, has overseen the electronics business, which has been battered by shrinking consumer demand and the strong yen. The problems in electronics are a main reason Sony is tumbling into its first annual net loss in 14 years.
Stringer, 67, introduced a team of four younger executives to spearhead efforts to bring together Sony's sprawling empire, spanning TVs, games, movies and semiconductors, to develop products and services for the digital age.
