In brief: Regulators warn of risks to financial institutions
WASHINGTON – The panel created to prevent a repeat of the 2008 financial crisis said Tuesday that banks and other financial institutions are stronger now but regulators must remain alert to new risks including the danger posed from cyberattacks.
In its annual report to Congress, the Financial Stability Oversight Council said recent cyberattacks have heightened concerns about the potential of even more destructive attacks that could significantly disrupt the workings of the financial system.
It said greater attention must be paid to developing ways to combat computer hackers and it urged greater collaboration among financial institutions and government agencies to share data that could help thwart a growing threat.
The council was created by the 2010 Dodd-Frank Act, which Congress passed in the wake of the worst financial crisis in seven decades. It is chaired by Treasury Secretary Jacob Lew and includes representatives from other government financial regulatory agencies including the Federal Reserve, the Securities and Exchange Commission and the Federal Deposit Insurance Corp.
Lew was critical of legislation being pushed by Senate Banking Committee Chairman Richard Shelby, R-Alabama, which Lew said would put the country at greater risks of another crisis.
“Senator Shelby’s bill … contains changes to our financial regulatory framework that would roll back the clock and leave us with weakened oversight, fewer consumer protections and less effective tools to address risks in the system,” Lew said.
Higher worker pay hurts Wal-Mart’s bottom line
NEW YORK – Wal-Mart Stores Inc. reported a 7 percent drop in first-quarter profit as the strong dollar and some efforts to improve its business hurt its bottom line.
The company said Tuesday that higher worker wages and increased spending on its online operations were among the reasons its results missed Wall Street estimates. On the news, investors sent the company’s shares down more than 4 percent.
Greg Foran, who had been president and CEO of Wal-Mart Asia and took over Wal-Mart’s U.S. business last summer, asked for investor patience.
The company, based in Bentonville, Arkansas, had a 1.1 percent increase for sales at U.S. Wal-Mart stores open at least a year. It was its third consecutive quarter of increases, but the growth was slightly below analysts’ expectations.
Wal-Mart said net income was $3.34 billion, or $1.03 per share, for the three months that ended April 30. That compares with $3.59 billion, or $1.11 per share, a year earlier.
Net revenue was down slightly to $114.0 billion, from $114.2 billion in the year-ago quarter. The quarter marked the third consecutive period of growth in revenue at stores opened at least a year.