Economy, Financial Industry | featured news

Europe has spent hundreds of billions of euros rescuing its banks but may have lost an entire generation of young people in the process, the president of the European Parliament said.

The European Central Bank has left its benchmark interest rate unchanged at a record low of 0.75 percent, holding off on further stimulus even though the euro area remains stuck in recession.

Financial markets would be affected adversely if U.S. lawmakers fail to agree on a "fiscal cliff" deal before Tuesday, President Barack Obama said in an interview broadcast on Sunday, while urging Congress to act quickly to extend tax cuts for middle-class Americans.

President Barack Obama singled out financial institutions for causing much of the economic tailspin and criticized their opposition to tighter federal oversight of their industry....

Several major U.S. banks, led by Wells Fargo & Co, said the troubled economy drove credit losses higher, reducing profitability in the second quarter.

The Obama administration's proposal to overhaul financial regulations, aimed in part at restoring global confidence in America's economic system, triggered a welcome but largely wait-and-see response from overseas investors and analysts.

President Obama said he was looking for a "careful balance" when sketching his blueprint to stabilize the nation's financial sector and wring from the system the kind of risky practices that propelled the country into economic turmoil.

Finance chiefs from the G7 powers said on Friday the global economy may be pulling out of the depths of a recession although recovery was not yet assured, and they pledged to make certain big financial firms are sound.

Most respondents point to financial industry as culprit, but doubts are rising about some of the administration's recovery plans.