Greenspan Touts Price Stability
WASHINGTON - Federal Reserve officials have learned from past mistakes that maintaining price stability is the main contribution a central bank can make to economic prosperity, Fed Chairman Alan Greenspan said Wednesday."Our challenge in monetary policy is to foster, as best we can, the financial conditions that will allow this economic expansion and technological revolution to continue as long and as vigorously as possible," Greenspan said in the text of opening remarks at his confirmation hearing for a fourth term as Fed chairman.
With economic expansion in its ninth year and on track to become the longest on record in February, most members of Congress saw the hearing as little more than an opportunity to urge Mr. Greenspan's early confirmation.
Senate Banking Committee Phil Gramm, R-Tex., said he has scheduled a Feb. 1 vote on Mr. Greenspan's confirmation and that he hoped the full senate would confirm him later that day.
In his text, Mr. Greenspan did not discuss the economy or specifics of monetary policy, sticking to a general defense of the Fed's anti-inflation philosophy.
B of A Reaches 'Adopt-an-ATM' Agreement
SAN FRANCISCO - Bank of America Corp. said Wednesday that it has reached an agreement with California's labor commissioner that will allow the company to continue its controversial "Adopt an ATM" program.The program, which was introduced last fall, invited employees to volunteer to adopt automated teller machines near their homes or workplaces. Workers were asked to check up on their ATMs once a week to make sure they were clean and working properly.
More than 1,500 employees nationwide signed up to participate in the program, which the bank said was designed to boost employee morale.
But in December, Labor Commissioner Marcy V. Saunders wrote a letter to Bank of America officials demanding they cease the program, which she called a "flagrant violation of the most basic precepts of wage and hour law." She said she was concerned that bank employees would feel pressured to volunteer, and that the company would therefore be able to extract additional work from them without compensation.
Under the agreement, the bank will no longer ask for volunteers for the program. Rather, it will offer a toll-free number to any employee who wants to report a maintenance issue that needs to be addressed.
- Louis Whiteman
Talks on Citi Bid for Polish Bank Confirmed
WARSAW - The Polish government on Wednesday confirmed it has been holding talks with Citigroup on a possible acquisition of Warsaw-based Bank Handlowy.Sources said the government favored a new bid for Handlowy after opposition by Bank Rozwoju Exportu, which also wants to buy Handlowy. They said the government feared that a takeover by Bank Rozwoju would lead to excessive concentration in banking.
Citi, alongside other big U.S. financial institutions such as General Electric Capital Corp, J.P. Morgan & Co., and Chase Manhattan Corp., have been steadily building up operations in Eastern Europe.
Citigroup last year sought to acquire Banka Polska Kasa Opieki but lost out to Italy's Unicredito and the German insurance company Allianz, which paid $1.1 billion for a 52% stake in the bank. Citigroup subsequently said it would open 25 branches in Poland over the next two years in a bid to increase its market share there to over 10% from around 3%.
Foreign banks hold either majority or large minority stakes in most Polish banks. J.P. Morgan, for example, already owns a 12% stake in Handlowy but plans to sell the stake as soon as the Polish government authorizes the sale of the bank. Handlowy has been valued at around $1 billion and would be Citigroup's second major European deal announced this month. In the other one, it said it would buy Schroders PLC, the London-based merchant bank.
- James R. Kraus
