Governor of Iran’s Central Bank Resigns
The head of the Central Bank of Iran resigned Sunday, bringing the number of key economic figures who have left President Mahmoud Ahmadinejad’s Cabinet to three this month.
A government spokesman, Gholamhossein Elham, announced the resignation of the bank’s governor, Ebrahim Sheibani, after weeks of rumors that he had resigned over his differences with Ahmadinejad.
Elham said a former economy minister, Tahmaseb Mazaheri, would succeed Sheibani, the Iranian Students News Agency reported.
The resignation came after the departures this month of the minister of oil, Kazem Vaziri-Hamaneh, and the minister of industry, Alireza Tahmasebi.
Sheibani had reportedly opposed Ahmadinejad’s unexpected intervention to lower interest rates to 12 percent from 15 and 17 percent.
Economists were shocked after the president dissolved the Money and Credit Council, a monetary policymaking body, this month.
Home Depot Unit Sells For Less in Tight Market
Home Depot was forced to drop the sale price of its commercial supply business by nearly $2 billion on Sunday, according to people involved in the negotiations, one of the first big buyouts to be renegotiated as a result of the recent credit squeeze.
The renegotiated deal, which cut the sale price roughly 18 percent, to $8.5 billion, could lead to reconsideration of some other large buyouts that are pending and are worth nearly $400 billion collectively. Such turmoil is likely to leave the Wall Street banks that backed those deals stuck with billions in loans that cannot be resold.
In cutting the price of the deal, Home Depot may have created a template for other buyout firms to drag sellers back to the negotiating table. It also could bring an end to the two-year buyout boom, which was fueled by cheap credit.
Home Depot’s board approved the deal in principle during a meeting on Sunday afternoon, people involved in the negotiations said. Home Depot’s board is planning to reconvene early Monday to complete the details of the agreement, which is tentative and could still collapse.
Mortgage Crisis Forces Sale of German Bank
The eastern German state of Saxony was forced to sell a troubled state-run bank Sunday as the global liquidity crisis set off by the U.S. subprime mortgage problems claimed its first major European victim.
Landesbank Sachsen Girozentrale, which received an emergency 17.3 billion euro ($23.6 billion) line of credit from a group of regional savings banks Aug. 17, is being sold to a larger rival, Landesbank Baden-W¸rttemberg, said the state premier of Saxony, Georg Milbradt. The state government controls 51 percent of the bank, known as Sachsen LB, which is based in Leipzig.
“As a result of the market turbulence and the resulting pressure on the bank, continuing its activities without a partner would not be feasible,” Milbradt told reporters in Dresden on Sunday.
The swift sale of Sachsen LB was the most significant sign yet of just how hard it has become for many European lenders to obtain access to short-term financing amid widespread uncertainty over the extent of banks’ investments in the souring mortgage-backed securities market.