Listening English lesson

Looking Back: Wall Street, a Year Later

December 15th, 2009 at 03:39am Under Economy Report

This is the VOA Special English Economics Report.

One year ago, the United States financial system was in danger of collapse. One of Wall Street’s oldest investment houses had just sought protection from its creditors. The Lehman Brothers bankruptcy on September fifteenth was a shock to the system, but not the only one.

Lehman Brothers’ headquarters in New York City on the day the company filed for bankruptcy

A week earlier, the government had seized Fannie Mae and Freddie Mac. These companies help finance most American housing loans. And one day after Lehman’s failure, the government decided that the huge insurer A.I.G. was too big to fail. The Federal Reserve rescued the American International Group with an eighty-five billion dollar loan.

But soon, credit markets around the world slowed to a halt on fears about the health of banks. By early October, Congress passed the Troubled Asset Relief Program, a rescue plan for the financial system.

Banks and other financial companies have received more than two hundred billion dollars. But ten banks agreed in June to repay almost seventy billion of that. And so far, the government has earned about four billion on its investments.

But taxpayers still own almost eighty percent of A.I.G. They also hold big shares of Citigroup and a number of other banks, as well as sixty percent of General Motors.

On Monday, the anniversary of the Lehman collapse, President Obama renewed his call for reform of financial supervision. He said in a speech on Wall Street that some of the “old ways” that led to the crisis have already returned.

BARRACK OBAMA: “That’s why we need strong rules of the road to guard against the kind of systemic risks we have seen. And we have a responsibility to write and enforce these rules to protect consumers of financial products, taxpayers, and our economy as a whole.”

Fed Chairman Ben Bernanke said Tuesday that the recession “is very likely over at this point.” But he said the labor market could remain weak through next year.

Next week, leaders of the world’s largest economies will meet in Pittsburgh, Pennsylvania. They will discuss economic policies and ways to strengthen financial regulation after the crisis. But the Group of Twenty summit also comes as the United States and China face a growing trade dispute.

Last week the Obama administration placed high import taxes on Chinese tires. The aim is to stop what American officials call a “harmful” increase in tire imports. China, in turn, said this week that it will investigate imports of American chicken products and auto parts. China also asked the World Trade Organization to intervene, to avoid a trade war.

And that’s the VOA Special English Economics Report, written by Mario Ritter. I’m Steve Ember.

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Slowing Exports, High Debt Shake Central and Eastern Europe

March 6th, 2009 at 11:42pm Under Economy Report+ VOA

This is the VOA Special English Economics Report.

Leaders of the European Union met Sunday in Brussels to discuss measures to deal with the world financial crisis. But the emergency meeting showed growing divisions between western European countries and newer members of the European Union.

Economies in central and eastern Europe have been hit hard by the worldwide credit crisis and less demand for exports in western Europe.

Hungarian Prime Minister Ferenc Gyurcsany, left, and Czech Prime Minister Mirek Topolanek at the E.U. meeting in Belgium

Hungary’s prime minister, Ferenc Gyurscany, has called for two hundred thirty billion dollars in aid for the weakest of the twenty-seven members of the European Union. The leader of Europe’s biggest economy, however, opposes such a large plan. German Chancellor Angela Merkel has suggested targeted aid for a few countries instead.

The European Union and the International Monetary Fund have already lent Hungary twenty-five billion dollars. Latvia received more than nine billion from the I.M.F. in December. But demonstrations fueled by the economic crisis led the Latvian government to resign last month.

The World Bank and two European development banks agreed last week to provide up to thirty-one billion dollars in aid to central and eastern Europe. A main concern is that the failure of some banks or governments to pay their debts could send a financial shock across many countries.

The effects could reach beyond central and eastern Europe. Banks in Austria, Italy and Sweden that expanded into the area during good times are now in danger of heavy losses.

Even in countries outside the euro area, like Hungary and Poland, businesses and individuals often borrowed in euros. Lower interest rates made euro loans a good deal at the time. Now, those loans have become more costly as local currencies have lost value. Chances are greater that foreign currency loans in some countries will not be paid back.

But some of the central and eastern economies in the European Union are in relatively good health. Poland is the biggest and its economy is less dependent on exports. The Czech Republic is also considered in a better position. The Czechs currently hold the E.U. presidency.

On Wednesday, banking supervisors from the Czech Republic, Slovakia, Poland, Romania, Bulgaria and Hungary released a statement. They expressed concerns that information about risks to financial systems in central and eastern Europe is “often simplified and misleading.”

And that’s the VOA Special English Economics Report, written by Mario Ritter. I’m Steve Ember.

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