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Home > Blogs > QFINANCE Editor > A week in the world of business and finance (July 4 – July 8, 2011)

A week in the world of business and finance (July 4 – July 8, 2011)

Each week QFINANCE will endeavor to bring you some of the biggest news stories from the past five days in finance and business, as well as some of the most fascinating websites and links that have crossed our path. We hope you'll enjoy reading, we hope you'll have a great weekend and we hope that you'll come back each Friday to brush up on your finance and business knowledge.

Monday June 20
Commentators, journalists and the public reacted in shock to new revelations that journalists from the News of the World paper hacked Milly Dowler’s phone, deleting messages and raising false hopes that the teenager was still alive after her disappearance. Mark Lewis, the lawyer representing the murdered schoolgirl’s parents said that it was “despicable” that the News of the World “were prepared to act in such a heinous way that could have jeopardized the police investigation and given false hope”. The developing scandalous saga has seen two people sent to prison and, until now, been largely seen to only affect celebrities and politicians. The Sunday tabloid at the time was edited by Rebekah Brooks, now chief executive of News International, the News Corp group that owns Rupert Murdoch’s UK newspapers. These reports come at a time in which the British government is looking to assess final public opinions on Murdoch’s buy-out proposal for the remainder of British Sky Broadcasting.
Read about the Milly Dowler phone hacking scandal in more depth here.

Later in the week, on Wednesday, the political and commercial fallout of the phone hacking led to beliefs that the bid for BSkyB would be delayed, and News Corp’s shares fell 3.24 per cent.
Read about the devastating drop in News Corp's shares in more depth here.

Eventually, after mounting pressure surrounding a number of phone-hacking and bribing allegations, as well as the loss of a number of significant advertisers, News Corp and News International made the decision to close the News of the World. The final edition will be run on Sunday.
Read about the closing of the News of the World in more depth here.

Tuesday June 21
France’s ex finance minister, Christine Lagarde, took over as head of the International Monetary Fund, becoming the first woman to head the IMF since its inception in 1944. Following the resignation of Dominique Strauss-Kahn in May, in light of sexual assault charges, there was much speculation about who would fill the prestigious and powerful position. Ms Lagarde received support from the EU, US and emerging-market nations China, India and Brazil to beat fellow candidate Agustin Carstens from Mexico. She claims that she hopes the IMF will continue “to serve its entire membership” and that the organization must be “relevant, responsive, effective and legitimate, to achieve stronger and sustainable growth, macroeconomic stability and a better future for all.”
Read about Christine Lagarde's take over as head of the IMF in more depth here.

We feel it is necessary to grant recognition to whoever came up with the brilliant headline ‘Changing of Lagarde’ to mark Christine Lagarde’s first day as new head of the IMF in Washington. The best we had was ‘En Lagarde’, which is a pun, but doesn’t really make sense.
For the best news title of the week, click here.

Wednesday June 22
The credit ratings agency Moody’s has moved Portugal’s debt status down to ‘junk’, which they claimed was justified by concerns that the country would require a second financial bail-out package before it was ready to once again join in borrowing money from financial markets. Critics of this decision by Moody’s, including Portugal’s government, have said that the agency has not taken into account strong support for austerity measures in the country, which were designed to “reverse the course and restore confidence” in Portugal. Moody’s also said that they were skeptical about Portugal’s ability to fulfill the deficit reduction targets set out as conditions for the initial bail-out by the EU and the IMF. The last time the credit ratings agency downgraded Portugal was in April, predicting this original bail-out loan of €78bn ($112bn; £70bn).
Read about Moody's and Portugal in more depth here.

The move later caused led the EU Commission to criticize credit ratings agencies, saying that the timing of Moody’s move was “questionable” and raised issues about the “appropriateness of behavior” shown by credit ratings agencies. Wolfgang Schaeuble, German finance minster, told a news conference that he wanted to “break the oligopoly of the ratings agencies”.
Read about the EU Commission's criticism of ratings agencies in more depth here.

Thursday June 23
In a reaction to the threat of Google’s rival social network, Facebook and Skype are to join forces. Mark Zuckerberg announced that the move will allow Facebook users to make video calls, as part of a larger redesign that includes a new group chat function and new look for the site. This was the first major announcement from the viedo-calling giant Skype since it was purchased by Microsoft in May in a surprising $8.5bn (£5.2bn) deal.
Read about the conjoining of Skype and Facebook in more depth here.

Friday June 24
JP Morgan Chase has agreed to pay a second large fraud settlement after it was accused of fixing bids for state and municipal contracts on nearly a hundred occasions. Regulators, tax authorities and twenty-five US states are to receive $228m (£143m) in the second massive payout recently, the first of which was $154m that settled charges that the bank were misleading buyers of its mortgage investments. The US Justice Department has brought criminal charges against eighteen of the bank’s former executives, with nine already having pleaded guilty. JP Morgan said it was “pleased to have resolved this matter with its regulators”.
Read about JP Morgan's second large fraud settlement payout in more depth here.

Come back next Friday for another report on the world of business and finance.

More useful links we’ve found over the week:

Are you planning to invest or do business in the environmental, clean technology or renewable energy sectors?
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Tags: Agustin Carstens , British Sky Broadcasting , BSkyB , Changing of Lagarde , Christine Lagarde , closure , credit rating agencies , Dominique Strauss-Kahn , EU , European Commission , Facebook , Google , hacking , IMF , International Monetary Fund , JP Morgan Chase , Mark Lewis , Microsoft , Milly Dowler , Moody's , News Corp , News International , News of the World , phone hacking , Portugal , Rebekah Brooks , Rupert Murdoch , settlement , Skype , The News of the World , video-call , video-calling , Washington , Wolfgang Schaeuble
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