Business this week

Tim Geithner unveiled long-awaited proposals to deal with toxic assets. The American treasury secretary’s plan mixes a little private capital with a lot of public money to buy possibly as much as $1 trillion of the bad assets, which Mr Geithner hopes will “get the securities markets…working again”. Five private funds will be approved by the Treasury to manage the programme. Firms in the running, such as BlackRock and PIMCO, gave the plan a welcome. Stockmarkets had their best day in months.Mr Geithner then testified to Congress along with Ben Bernanke, chairman of the Federal Reserve, and asked for powers to seize failing financial companies, similar to those that exist for taking control of banks. They said the lack of such authority to “unwind an institution of the size and complexity” of American International Group had forced the government to prop up the distressed insurer by taking an 80% stake. In a busy week, Mr Geithner went on to propose a broad overhaul of the regulations governing large hedge funds, private-equity firms and derivatives markets.

Suncor and sands

Suncor Energy, a big producer in Canada’s tar-sands industry, agreed to buy Petro-Canada, a rival, for C$19.3 billion ($15.8 billion). More consolidation is expected among companies with resources in Alberta’s tar sands, which hold the world’s second-biggest oil reserves after Saudi Arabia. The decline in oil prices over the past year has led to the postponement of some projects.India’s Tata Motors officially launched the Nano. Millions of Indians are expected to enter a lottery to place orders for the car, which is the world’s cheapest at 100,000 rupees (around $2,000), though delivery charges and extras, such as air conditioning, push the price up. A European model is expected in 2011, and Tata hopes eventually to sell a version of the Nano in America, with stricter pollution controls and safety features.Daimler sold a 9.1% stake worth €2 billion ($2.6 billion) to a sovereign-wealth investment fund in Abu Dhabi. Aabar Investments becomes the largest shareholder in the German carmaker.

Asia feels the pain

The World Trade Organisation predicted that global trade volumes would drop by 9% this year, the biggest decline since the second world war. Exports from developed countries are forecast to fall by 10%, and those from developing countries, which are more trade-dependent, by up to 3%.Japan’s Mitsubishi UFJ and Morgan Stanley decided to merge their Japanese securities units, creating one of Japan’s biggest brokers. MUFJ bought a 21% stake in the American bank last October. Japanese authorities have endorsed legislation that, from June, will make it easier for the country’s banks to compete on the same terms as American and European firms.The governor of China’s central bank called for a new world reserve currency to replace the dollar, which he suggested could be issued by the IMF. Zhou Xiaochuan said there was a need to reset “the obsolescent unipolar world economic order”. Other emerging-market economies are also calling for change; Russia is proposing a motion on a currency at the G20 meeting in London on April 2nd.The IMF announced a reform of its lending procedures, including the introduction of a new flexible credit line (FCL) for countries with “very strong fundamentals”. The fund hopes that by streamlining loan conditions, countries will tap the FCL to strengthen their economies.Moody’s downgraded its AAA credit-rating for GE, which the conglomerate had held since 1967, because of concerns over its credit-card and property businesses. GE was downgraded by Standard & Poor’s earlier this month, but by only one notch. Moody’s cut its rating by two notches.

Lots of AIGgro all round

Following the fuss over bonuses at AIG, ING made a “moral appeal” to around 1,200 employees to return their bonuses. The Dutch bank said the plan was voluntary. And Société Générale withdrew plans to award discounted stock options to four directors following a political outcry in France. Nicolas Sarkozy, the French president, also condemned a €3.2m ($4.3m) pay-off made to the departing boss of Valeo, a struggling car-parts supplier.Wal-Mart paid out $933.6m in bonuses to 1m of its workers. The retailer has not had to ask for government assistance.French workers held the boss of their factory hostage as they sought to renegotiate redundancy packages. It is the second time a boss has been held hostage in France recently over lay-offs. Others have merely been pelted with eggs.