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Switzerland’s government has moved to freeze any assets in the country’s banks that might belong to Libyan leader Moammar Gadhafi, the Swiss Federal Department of Foreign Affairs said Thursday.

"The Federal Council [Bundesrat] has decided to freeze any assets of Moammar Gaddafi and those surrounding him, in Switzerland, with immediate effect," the Swiss Federal Department of Foreign Affairs said in a statement.

The move comes after ten days of protests that have lost Gadhafi control of eastern Libya and led prominent members of his own government to defect and join demonstrations.

Gadhafi has shown no signs that he’s ready to give up the post he has held for 42 years Internet Payday loans.

It was not immediately clear what assets, if any, Gadhafi keeps in Switzerland.

For the Swiss government, it’s a case of deja vu, as the country moved earlier this month to freeze the assets of Egyptian President Hosni Mubarak and his family, following protests in that country that led to his resignation.

The Swiss banking system is known for its secrecy. But in recent years, the banks have made concessions in the interest of providing more transparency. 

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South Korea’s main stock exchange slapped a record fine on the local unit of Deutsche Bank AG over a sharp decline in the benchmark index late last year that resulted in sanctions by the country’s financial regulators.

The Korea Exchange said Friday in a statement that it would fine Deutsche Securities Korea a total of 1 billion won ($888,000) for trading rule violations. It was the biggest fine ever handed out to a member of the exchange, according to KRX spokesman Won Yong-joon.

The exchange, known as KRX, also demanded that Deutsche Securities Korea take disciplinary action against three employees. It called for one to be dismissed or suspended. Two other employees should either have their pay reduced or be reprimanded, it said. The KRX did not identify the employees.

Lee Chul-jae, director of the exchange’s market oversight division, told reporters that additional penalties are possible if the demands are not acted upon, according to Won. Deutsche Securities Korea has a month in which it can appeal the fine and the demands for employee punishment, Won said.

Deutsche Securities Korea said in a statement that it “deeply regrets” the action taken by the exchange, though added it “respects its decision to impose such penalties.”

The exchange’s action came after South Korea’s financial regulators said Wednesday they would ask prosecutors to investigate five Deutsche Bank employees in South Korea, Hong Kong and New York over the purported price manipulation and unfair trading.

The regulators also said that they would suspend some securities and exchange traded derivatives operations by Deutsche Securities Korea for six months from April 1. The local unit was also to be referred to prosecutors.

Regulators and the Korea Exchange had been investigating a steep fall in the Korea Composite Stock Price Index during the final minutes of trading on Nov. 11. The index, known as the Kospi, closed 2.7 percent lower on that day.

The end-of-session plunge came on a so-called triple-witching day when stock options, stock index options and stock index futures all expire. The phenomenon, which occurs four times a year, can lead to heightened volatility in share prices. The regulators said that the alleged manipulation involving spot and futures transactions resulted in illegal profits of 44.9 billion won.

Deutsche Bank said in a statement Wednesday that it was “disappointed” with the findings and expressed regret over the penalties imposed and the referral of its employees and South Korean unit to prosecutors. But it said it would continue to cooperate with South Korean authorities.

The decline came on a day that South Korea was in the international spotlight as a two-day Group of 20 summit meeting began in Seoul, the country’s capital. Coincidentally, Josef Ackermann, Deutsche Bank’s chairman and CEO, was in Seoul to participate in a business forum held in conjunction with the summit.

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One thing is clear: nobody in Washington says they want a government shutdown.

But lawmakers have only until a week from Friday to agree on a way to keep the lights on in federal offices here and around the world. The clock is ticking.

Lawmakers are off this week, but they’re already starting to talk behind closed doors about averting a shutdown.

The real work comes next week, when Congress gets back to Washington with just four days to the deadline to act on a plan for the remaining seven months of the current fiscal year.

Even though House Republicans pushed forth a budget early Saturday with more than $60 billion in cuts, it’s practically a nonstarter with the Democrats who control the Senate. And even if such deep cuts got through the Senate, the White House has promised to veto them.

So the thing to watch is whether lawmakers embrace another stop-gap measure to avoid a shutdown while they hash out a broader deal on cuts for the rest of the fiscal year, which runs through the end of September.

When lawmakers hit the talk shows on Sunday, they downplayed a shutdown and talked about a desire to find a short-term deal.

"My guess is we’ll probably have some short-term extensions while we negotiate these things with spending cuts," Rep. Paul Ryan of Wisconsin — the new chairman of the House Budget Committee — told the CBS program "Face the Nation."

But that desire could come face-to-face with ideology free 3-in-1 credit report. Last week, Speaker John Boehner drew a line in the sand, saying the House would not agree to a stop-gap measure that doesn’t cut spending in some way.

And Democrats also appear to be standing firm. House Minority Leader Nancy Pelosi of California said late Friday that Democrats want a deal to keep funding at current levels, at least through March 31.

When asked if Democrats would agree to more cuts in a stop-gap measure to avoid a shutdown, Sen. Charles Schumer of New York told CNN on Sunday that his party has already agreed to slice billions from the budget.

"Those cuts are very painful and many in our caucus didn’t want to go along with those," Schumer said.

The last time the federal government went dark was for five days in November 1995 and another 21 days, ending in January 1996, during the Clinton administration.

It led to longer waits for veterans and seniors getting Social Security, Medicare and benefits checks, according to the Congressional Research Service. Some 800,000 workers were sent home during the first shutdown and 284,000 were sent home during the later shutdown. The closure of 368 national parks, monuments and museums resulted in a loss of 7 million visitors.

– CNN’s Brianna Keilar and Tom Cohen contributed to this report. 

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European Central Bank council member Yves Mersch said officials may toughen their language on inflation next week, indicating a readiness to raise interest rates in coming months.

“I would not be surprised at most colleagues concluding that we have upside risks to price stability,” Mersch said in an interview in Luxembourg yesterday. With the economy strengthening and inflation in breach of the ECB’s 2 percent limit, policy makers will “inevitably” have to “rebalance our monetary policy stance,” Mersch said, without giving a timeframe.

The ECB, which has kept its benchmark interest rate at a record low of 1 percent for almost two years, is growing more concerned that soaring energy and food prices will drive up wages and entrench faster inflation. At the same time, raising borrowing costs too soon could exacerbate Europe’s sovereign debt crisis by increasing pressure on stressed banking systems in countries such as Greece and Ireland.

The euro rose more than a cent against the dollar to as high as $1.3695 after Mersch’s comments were published. Euribor futures extended a decline, with the implied yield on the contract expiring in December gaining eight basis points to 1.98 percent, as traders added to bets on higher ECB rates. German two-year government notes fell, sending the yield up seven basis points to 1.45 percent.

August Increase?

So far, ECB President Jean-Claude Trichet has said risks to the inflation outlook are “broadly balanced,” though they “could move to the upside.”

Investors today brought forward expectations for the ECB’s first quarter-point rate increase in three years to August from September, Eonia forward contracts show.

“There is a risk now that the ECB may raise before September,” said Nick Kounis, chief European economist at ABN Amro in Amsterdam. “While Mersch is a traditional inflation fighter, even the normally dovish members are sounding hawkish.”

ECB council member Athanasios Orphanides told Dow Jones in an interview published yesterday that the bank “must be ready to act as appropriate to safeguard price stability.” Nout Wellink of the Netherlands said in an interview with the Wall Street Journal published today that the ECB’s key rate may “distort the economic and financial process” if left at 1 percent too long.

Inflation Projections

Executive Board member Juergen Stark said last night that the ECB is “prepared to act decisively and immediately if needed” to maintain price stability, and fellow board member Lorenzo Bini Smaghi said the bank may need to reassess its policy stance.

At the next policy meeting on March 3, the ECB will publish its latest economic projections. Mersch said he expects ECB economists to lift their 2011 inflation forecast to more than 2 percent from 1.8 percent predicted in December. Inflation accelerated to 2.4 percent last month.

“Now the question is what about 2012, will this be a temporary hump or will this translate into a plateau?” Mersch said. “This very much depends on second-round effects.”

Crude oil prices have surged 27 percent over the past six months, pushing up import prices and adding to pressure on labor unions to secure bigger pay increases for workers.

Economic Outlook

Faster growth in countries like Germany, Europe’s largest economy, may also fan inflation. German business confidence surged to a record high this month and expansion in the euro region’s service and manufacturing industries accelerated to the fastest pace in more than four years.

Mersch said policy makers may next week change their view that risks to the economic outlook are “slightly tilted to the downside.”

Mersch, 61, has been touted by some economists as a possible successor to Trichet when his eight-year term ends on Oct. 31. Asked if he’s interested in the job, the Luxembourg central banker declined to comment, saying it’s a question for “the leaders who will make this decision.”

Wellink today declared his interest in the position, telling an audience at the University of Amsterdam that if asked, he would “think about it seriously.” Other possible candidates include Italy’s Mario Draghi and Finland’s Erkki Liikanen.

Before the Fed

Mersch said the ECB is not concerned that raising borrowing costs before the Federal Reserve could drive up the euro’s exchange rate. “We’ll raise rates when we find the situation warrants it, not on the time axis that belongs to market analysts,” he said. “We have no exchange-rate objective.”

The ECB is “fully aware that excessively low interest rates create distortions in the economy,” Mersch said.

Still, he warned against “moving into a posture of over- confidence by trying to make forward commitments in a period where uncertainty is still quite high.”

The ECB has twice been forced to abandon its exit from emergency measures designed to help banks through the financial and debt crises.

Mersch said officials are looking at resuming a “gradual” exit. One step may be to charge banks more when they borrow excessively from the ECB in an effort to wean them off the funds. Some banks have become too reliant on ECB cash after the central bank made unlimited amounts available at its benchmark rate to ease a liquidity squeeze.

“I cannot confirm that the solution that will be announced is a solution that is only a solution where price is affected,” Mersch said. “There can also be solutions where you act on the quantity. I can tell you that we are very far in our decision- making process.”

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Home sales probably fell in January, while orders for long-lasting goods climbed, a reminder that housing lags behind manufacturing as the U.S. recovery strengthens, economists said before reports this week.

Combined purchases of new and existing homes fell 2 percent to a 5.5 million annual pace, according to the median forecast of economists surveyed by Bloomberg News. Durable-goods bookings increased 3 percent last month, the survey showed.

Unemployment hovering near 9 percent means foreclosures may keep rising, adding to a glut of inventory that is depressing property values, hurting builders and homeowners. Growing exports, combined with increasing profits and tax incentives signed into law by President Barack Obama in December, will probably keep orders flowing to companies like Caterpillar Inc.

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Regulators have shut down three small banks in Georgia and California, boosting to 21 the number of U.S. bank failures this year after the weak economy and mounting bad debt brought down 157 banks in 2010.

The Federal Deposit Insurance Corp. on Friday seized the banks: Habersham Bank, based in Clarkesville, Ga., with $387.6 million in assets; Citizens Bank of Effingham, based in Springfield, Ga., with $214.3 million in assets; and Charter Oak Bank of Napa, Calif No teletrak payday loan., with $120.8 million in assets.

The failure of Habersham Bank is expected to cost the deposit insurance fund $90.3 million. The failure of Citizens Bank of Effingham is expected to cost $59.4 million. That of Charter Oak Bank is expected to cost $21.8 million.

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Rising global demand for food and fuel pushed up the U.S. cost of living more than forecast in January, a sign the risk of a damaging drop in prices is ebbing.

The consumer-price index advanced 0.4 percent for a second month, led by the biggest increase in food costs in more than two years, according to figures today from the Labor Department in Washington. Other reports showed manufacturing is bolstering the expansion, and consumer confidence is being buffeted by rising household expenses.

Americans are paying more for air travel and clothing as growing economies in Asia and Latin America boost demand for commodities like oil and cotton. Another report today showing more people than projected filed claims for jobless benefits last week indicates workers don’t have the power to seek bigger pay increases, evidence inflation is unlikely to flare.

“You’re seeing some pass-through of commodity costs in a few areas like airline fares, tires and clothing, but it’s still pretty muted,” said Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts. “For an upward spiral in CPI, we need to see wage inflation start to accelerate, and that’s not in the cards.”

Treasury securities climbed as the increase in applications for unemployment benefits showed the labor market will take time to recover. The yield on the benchmark 10-year note, which moves inversely to prices, dropped to 3.56 percent at 12:38 p.m. in New York from 3.62 percent late yesterday.

Exceeds Forecast

Consumer prices were projected to rise 0.3 percent last month based on the median forecast of 79 economists surveyed by Bloomberg News. Estimates ranged from increases of 0.2 percent to 0.5 percent.

Over the past 12 months, costs climbed 1.6 percent.

Energy costs increased 2.1 percent in January from a month earlier and rose 7.3 percent for the prior 12 months, today’s report showed. Food prices rose 0.5 percent last month, the biggest gain since September 2008, and were up 1.8 percent for the 12-month period.

The so-called core rate, which excludes volatile food and fuel prices, rose 0.2 percent, the biggest gain since October 2009. These expenses increased 1 percent from January 2010, compared with a record-low 0.6 percent year-over-year gain as recently as October.

Core inflation was boosted by a 1 percent increase in the cost of clothing, the most since February 2009, and a 2.2 percent rise in airline fares.

Higher Fares

AMR Corp.’s American Airlines boosted round trip fares $20 on most of its domestic routes in December, a move later matched by Delta Air Lines Inc., according to Farecompare.com. The fare comparison web site also said United Continental Holdings Inc. added a $20 round-trip peak travel day surcharge to fares on future travel dates.

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EPA official assails Blunt

An employee at Peabody Energy Corp.’s Kayenta Mine in Arizona was killed Friday afternoon, the company said.

In a statement late Friday, the St. Louis-based coal producer said the fatality was the result of “an incident between

with the Navajo Nation and Hopi Tribe, according to the company’s web site. The mine supplies about 8 million tons of coal per year to the Navajo Generating Station, Ari.

The death is the second at a Peabody-owned mine in just over seven months.

A 61-year old production foreman was killed on July 9 at Peabody’s Willow Lake mine in southern Illinois when he was struck by a battery-powered ram car.

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General Motors Co. is offering to waive the last three payments on existing leases if holders buy a new car, adding an incentive onto deals that last month exceeded offers made by rivals.

The promotion began this month and is valid on most models with leases that expire between now and Aug. 31, according to the company.

GM raised incentive spending in January by 16 percent to an average of $3,663 per vehicle, the highest among major carmakers, according to researcher Autodata Corp. GM sales outpaced the industry that month.

GM said in a video presentation for its initial public offering in November that it intended to offer fewer incentives that crimped margins and created an impression that price was the main selling point. Early-return leasing deals may conflict with that pledge, said Jessica Caldwell, an analyst at Edmunds.com.

“I hope they’re not walking down that road,” Caldwell said.

Sales at Detroit-based GM rose 22 percent last month, topping the industry’s 16 percent gain. Don Johnson, GM’s vice president of U.S. sales, said during the company’s monthly sales conference call that the company would begin discussing incentives “directionally” rather than giving specific data on a month-to-month basis.

“I am not seeing any internal behavior that suggests we have gone back to old ways,” Rick Scheidt, GM’s vice president of Chevrolet marketing, said earlier this week at the Chicago Auto Show.

“It’s still way too close to the bankruptcy for us to be sliding back into bad habits. We know everybody’s watching guaranteed fast personal loans.”

GM is being smart about incentives, said Duane Paddock, who owns Paddock Chevrolet in Kenmore, N.Y. His dealership advertises a Chevrolet Cruze compact for $119 a month and the Chevrolet Equinox sport utility vehicle for $219, including other incentives.

The promotions fend off Honda Motor Co. and Toyota Motor Corp., both of which have drawn customers away with attractive lease offers, Paddock said.

Toyota, which halted deliveries a year earlier due to a recall, raised incentive spending in January by 24 percent to an estimated $1,962 a sale. Honda boosted discounts 41 percent to $2,016. GM had increased its promotions by $498, or 16 percent.

The incentives may be GM’s way of signaling it’s back in the leasing business after spending $3.3 billion last year to buy General Motors Finance, said Nicholas Colas, chief market strategist at BNY ConvergEx Group in New York.

“I don’t think these incentives have as much to do with overall discounting as they have to do with messaging to the marketplace,” Colas said.

Leasing was about 14 percent of GM’s deliveries in January, up from less than 5 percent during the recession, Johnson, the U.S. sales chief, said. GM remains below the industry average of 20 percent, he said.

GM’s leasing partners also include Ally Financial Inc., formerly known as GMAC Financial Services, and served as the captive lending arm of the automaker’s predecessor.

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