- - Wednesday, March 30, 2011

TREASURY

Official says banks will use federal funds to repay bailout

A Treasury Department official says he expects some banks to use money from a government program aimed at increasing small-business loans to repay their federal bailouts.

In an interview, Acting Assistant Secretary Timothy G. Massad said Wednesday that a law enacted last year creating the Small Business Lending Fund allows banks to use money from that program to repay their bailouts. The program is a response to the economic downturn. It was created to encourage smaller banks to make loans to small businesses.

Sen. Charles Grassley, Iowa Republican, complained in a recent letter that using one federal program to repay another would be “budget gimmickry.”

Mr. Massad’s comments came on the same day that he said the Treasury Department has broken even on the bailout money it gave banks.

CURRENCY

Euro rises against dollar after ECB comments

NEW YORK | The euro turned higher against the dollar Wednesday after a European Central Bank member suggested that the central bank could increase rates gradually.

The comments, made by European Central Bank member Lorenzo Bini Smaghi, indicated that the central bank is “more likely to embark in a series of rate hikes rather than just one,” said Brian Dolan, chief currency strategist at FOREX.com.

Central banks raise interest rates to help counter inflation, and higher rates on government bonds tend to increase demand for the currency linked to that country or region. Investors already expected that the European Central Bank would raise rates at next week’s meeting, but the latest comments from Mr. Bini Smaghi may mean it would be the first of many.

The euro rose to $1.4121 in late Wednesday from $1.4088 late Tuesday.

INTERNET

High-speed Internet comes to Kansas

KANSAS CITY, Kan. | After seeing Facebook pleas and flash mobs, and even cities temporarily renaming themselves “Google,” the search engine giant said Wednesday that it has chosen Kansas City, Kan., as the first place to get its new ultra-fast broadband network.

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