- - 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.

Google said on its official blog that the city would be the inaugural site for its “Fiber for Communities” program, which it says will be capable of making Internet access more than 100 times faster than the broadband connection in most U.S. homes.

The service, which will provide Internet connections of 1 gigabit per second to as many as 500,000 people, will be offered beginning in 2012 while Google looks at other communities across the country.

More than 1,100 cities made bids to become a test site for the company’s fiber-optic network, trying to catch Google’s attention and show their enthusiasm.

The company had set a March 26 deadline for city governments and individuals to express interest.

SURVEY

Poll: CEOs plan to boost hiring, spending

A majority of America’s largest companies are ready to step up hiring this year and more than 90 percent expect sales to improve, a new survey found.

The Business Roundtable said Wednesday that 52 percent of its members plan to increase hiring in the next six months. That’s the largest proportion for the group since it began surveying its members nine years ago. The trade group represents CEOs from roughly 200 of the nation’s largest companies.

More than 60 percent also plan to spend more on long-lasting manufactured goods, such as computers and machinery, according to the survey of 142 executives taken in early March.

The group’s members are more optimistic than at any point since the survey began in 2002. Its CEO economic outlook index rose to 113, up from 101 in the previous quarterly survey. The index plummeted to -5, its lowest level, in the January-March quarter of 2009.

Still, the executives expect the overall economy to grow only a modest 2.9 percent this year. That’s up from their forecast three months ago of 2.5 percent.

From wire dispatches and staff reports

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