Federal agencies that set accounting standards in the US have issued guidelines that will allow banks greater flexibility in valuing securities in a fluctuating market.

Under pressure from banks and lawmakers, the Securities Exchange Commission, on Tuesday relaxed accounting rules that would make its easier for banks to report marginal losses or even profits when they announce third quarter results. The statement announcing the move was issued jointly by the chief accountant of the SEC as well as staff of the Financial Accounting Standards Board.

The Bankers Association of America praised the move which comes after the bankers had complained that auditors were pressurizing banks to value assets at unrealistically low prices rather than considering the higher rates which they might be worth in an orderly market. The fair-value rule was also criticized by some Congressmen who demanded that it be scrapped in the billion bail-out plan that was defeated on Monday.

However SEC clarified that it was merely interpreting the mark-to-market rule and not dropping it altogether. Also analysts from the other end of the debate justified the existence of the rule on grounds that bankers are themselves responsible for the critical situation because of the risky assets they had purchased. Nonetheless the new guideline comes as a great relief for bankers who have been reeling under the spate of bankruptcies and acquisitions.

The US federal agency that is responsible for guaranteeing bank deposits has asked the Congress for authority to increase the limit on the amount of money it insures for private bank accounts.

Sheila Bair, Chairperson of the Federal Deposit Insurance Corp announced late Tuesday, that the agency has sought temporary authority from the US Congress to be able to raise the limit on the amount of money it insures for individual bank accounts. However, she did not specify what the new limit should be. Currently the FDIC insures up to $100000 per account and this limit was put in place in 1980.

According to Bair, increasing the deposit insurance limit would bring back the confidence among depositors who have been shaky ever since several major banks of the country collapsed or was saved from bankruptcy by external support. The fear among bank depositors regarding the safety of their assets is further fuelling a crisis of confidence in the marketplace already reeling from the meltdown on Wall Street. To break this vicious circle, it was necessary to bring back confidence among depositors and one important was this could be done was to raise the limit on the amount of money insured by FDIC in individual bank deposits.

Chicago’s Midway airport might soon become the first large hub airport in the US to be run by a private company. The announcement came after the Midway Investment and Development Company bid $2.52 billion for a long-term lease of the airport.

The deal needs the final approval of the Federal Aviation Administration as well as the Chicago City Council before it can proceed any further. The City Council is scheduled to vote on the proposal on October 8, this year. While pointing out the advantages of private leasing, the Mayor of Chicago, Richard M. Daley claimed that privatization will enable the travelling public to enjoy world-class amenities and services at the airport besides benefiting the airport as well as the tax payers of Chicago. However not everyone is convinced about the benefits of privatization and many consumers have expressed concerns about raised costs of airport facilities.

While all major commercial airports in the US are owned and operated by local or state governments, Midway airport is eligible for private leasing since it had applied to the FAA to be part of an experimentation program. The program was initiated twelve years ago in order to study the feasibility of grating airport leases to private companies as a way of raising capital for development.

Swedish automaker Volvo AB has announced job cuts affecting around 1400 workers at its plants in Belgium and Sweden in the wake of declining demand in European markets.

On Tuesday, Volvo officials revealed that the company intends to cut costs by laying off about 1400 of its workers at several manufacturing plants in Europe. The cutbacks would take place at Ghent in Belgian as well as in Gothenburg and Umea in Sweden. The Belgian plant would lay off around 400 workers while the two Swedish plants are expected to lose 610 and 370 workers respectively.

Volvo claimed that besides restructuring of its workforce, it would draw up other cost-cutting measures in order to reduce the losses incurred from falling sales of its vehicles as well as rise in the prices if raw materials. Volvo AB is primarily a maker of trucks and buses and is a popular choice in the European auto market. However reduced demand of its vehicles in recent times has had a serious impact on its growth rates. Moreover the crisis in the global financial market means that buyers are less able to get credit for buying large vehicles like trucks and buses. Finally the rising gasoline prices have made consumers wary of going for large vehicles which are comparatively less fuel-efficient.

Dexia will receive 6.4 billion euros or $9.2 billion from the governments of France, Belgium and Luxembourg in order to avoid a financial collapse. This will make Dexia the second Belgian bank within a week to get a government and shareholder bail out following the crisis in banking sector which has now spread from the US to European markets.

Dexia is a French-Belgian lender which mainly provided loans to local governments in Europe. But the recent market meltdown in US left it with huge losses and on Monday, Dexia closed almost 30% lower on the stock market. This led to emergency negotiations between the bank and a consortium of European government officials. The CEO of Dexia, Alex Miller resigned immediately after the closing of talks and clarified that asking for state help was the only viable option left with Dexia to help it stay afloat.

The tri-government bail out of Dexia comes only two days after another Belgian-Dutch bank Fortis was pulled back from the brink by a rescue package of 11.2 billion euros or $16.4 billion by the governments of Belgium, Netherlands and Luxembourg. The near-collapse of so many finance firms in Europe is being seen as the direct consequence of the US market meltdown in which several major investment banks of Wall Street either went bankrupt or required external help to survive.