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Economy Briefs

- - Thursday, October 13, 2011

BANKS

JPMorgan's income drop casts a pall over banks

NEW YORK | If JPMorgan Chase can't do well, investors worry that other banks may do even worse.

The New York bank, widely considered the strongest in the industry, reported a 4 percent drop in income last quarter on Thursday on weakness in investment banking and more costs related to litigation over mortgage investments.

That bodes poorly for the other big banks - Citigroup Inc., Bank of America Corp., Goldman Sachs Group Inc. and Morgan Stanley - that are set to report results next week. JPMorgan warned that continued uncertainty in global markets could hurt fourth quarter results, too. Its stock slumped, dragging down other large banks with it.

The New York bank's third quarter net income dropped 4 percent to $4.26 billion, or $1.02 per share, on revenue of $24.37 billion.

EUROPE

Slovakia OKs expanded eurozone bailout fund

BRATISLAVA, SLOVAKIA | Slovakian lawmakers on Thursday approved expanding the size and powers of the EU bailout fund, overcoming an earlier rejection and removing the last hurdle to the fund's use as the continent's main weapon against the debt crisis.

Slovakia is the last of the 17 eurozone nations to approve boosting the bailout fund, called the European Financial Stability Facility. The fund will be able to lend quickly to governments before they are in a full-blown crisis and help them boost banks' health.

The country's parliament had rejected the changes to the bailout fund on Tuesday because a junior coalition partner, the Freedom and Solidarity party, was against it. In a desperate effort to force that party to vote in favor, Prime Minister Iveta Radicova tied the vote on the bailout fund to a confidence vote in the government. When the vote failed, her 1-year-old government collapsed.

The main opposition party, Smer-Social Democracy, then agreed to help the outgoing coalition approve the expanded fund in a second vote in exchange for early elections.

Parliament voted Thursday in favor of holding early elections in March, with 143 in favor and 3 against. Just a half hour later, they approved boosting the bailout fund - 114 were in favor. Only 76 votes were needed.

ENERGY

Puerto Rico wind farm to be Caribbean's largest

SAN JUAN, PUERTO RICO | Gov. Luis Fortuno says the Caribbean's largest wind farm will be built in the U.S. territory in a bid to reduce the island's dependence on oil.

Mr. Fortuno says the $250 million project is financed by San Francisco-based Pattern Energy and will feature 44 turbines capable of providing power to about 25,000 homes.

The Santa Isabela wind farm will start operating by September and generate up to 75 megawatt hours of energy as part of a 20-year deal with the state-owned Electric Energy Authority.

Thursday's announcement comes a week after Mr. Fortuno announced that the Caribbean's largest solar energy project will be built in Puerto Rico.

The U.S. territory relies on oil to generate 70 percent of its power.

AIRLINES

Air Canada demands compensation from union

TORONTO | Air Canada filed an unfair labor practice complaint against the union representing its flight attendants Thursday, a day after the federal labor minister blocked a planned strike by union members hours before it was set to begin.

The airline accused the Canadian Union of Public Employees, which represents 6,800 flight attendants, of increasing its demands in its latest round of bargaining. The Montreal-based airline also said the union misrepresented what its members would accept to ratify a collective agreement.