WASHINGTON — “On the Internet, the First Amendment is a local ordinance,” said Fred H. Cate, a law professor at Indiana University. He was talking about last week’s ruling from an Italian court that Google executives had violated Italian privacy law by allowing users to post a video on one of its services.

In one sense, the ruling was a nice discussion starter about how much responsibility to place on services like Google for offensive content that they passively distribute.

But in a deeper sense, it called attention to the profound European commitment to privacy, one that threatens the American conception of free expression and could restrict the flow of information on the Internet to everyone.

“Americans to this day don’t fully appreciate how Europeans regard privacy,” said Jane Kirtley, who teaches media ethics and law at the University of Minnesota. “The reality is that they consider privacy a fundamental human right.”

Google understands.

“The framework in Europe is of privacy as a human-dignity right,” said Nicole Wong, a lawyer with the company. “As enforced in the U.S., it’s a consumer-protection right.”

But Ms. Wong said Google’s policies on invasion of privacy, like its policies on hate speech, pornography and extreme violence, were best applied uniformly around the world. Trying to meet all the differing local standards “will make you tear your hair out and be paralyzed.”

The three Google executives were sentenced to six months in prison for failing to block a video showing an autistic boy being bullied by other students. The video was on line for two months in 2006, and was promptly removed after Google received a formal complaint. The prison sentences were suspended.

Still, Judge Oscar Magi’s ruling, in effect, balanced privacy against free speech and ruled in favor of the former. And given the borderless quality of the Internet, that balance has the potential to affect nations that prefer to tilt toward the values protected by the First Amendment.

“For many purposes, the European Union is today the effective sovereign of global privacy law,” Jack Goldsmith and Tim Wu wrote in their book “Who Controls the Internet?” in 2006.

This may sound odd in America, where the First Amendment has pride of place in the Bill of Rights. In Europe, privacy comes first.

Article 8 of the European Convention on Human Rights says, “Everyone has the right to respect for his private and family life, his home and his correspondence.” The First Amendment’s distant cousin comes later, in Article 10.

Americans like privacy, too, but they think about it in a different way, as an aspect of liberty and a protection against government overreaching, particularly into the home. Continental privacy protections, by contrast, focus on protecting people from having their lives exposed to public view, especially in the mass media.

The title of a Yale Law Journal article by James Q. Whitman captured the tension: “The Two Western Cultures of Privacy: Dignity Versus Liberty.” And historical experience helps explain the differing priorities.

“The privacy protections we see reflected in modern European law are a response to the Gestapo and the Stasi,” Professor Cate said, referring to the reviled Nazi and East German secret police — totalitarian regimes that used informers, surveillance and blackmail to maintain their power, creating a web of anxiety and betrayal that permeated those societies. “We haven’t really lived through that in the United States,” he said.

American experience has been entirely different, said Lee Levine, a Washington lawyer who has taught media law in America and France. “So much of the revolution that created our legal system was a reaction to excesses of government in areas of press and speech,” he said.

It was not until 1890 that Samuel Warren and Louis D flexcheck cash advance. Brandeis wrote “The Right to Privacy,” their groundbreaking Harvard Law Review article. Influential though it was, it came awfully late in the life of the republic.

The word privacy does not appear in the Constitution, and, outside the context of government searches, the document has almost nothing to say about the concept. This was perhaps best demonstrated by how hard the Supreme Court had to work in Griswold v. Connecticut, the 1965 ruling that established a right to marital privacy.

That right, Justice William O. Douglas wrote, was suggested by the First, Third, Fourth, Fifth and Ninth Amendments. The “specific guarantees in the Bill of Rights have penumbras, formed by emanations from those guarantees,” he wrote, in a much-mocked passage.

European courts, by contrast, have Article 8.

In 2004, the European Court of Human Rights relied on it to rule that Princess Caroline of Monaco could block German magazines from publishing pictures of her — quite tame pictures — that had been taken in public. “I believe that the courts have to some extent and under American influence made a fetish of the freedom of the press,” Judge Bostjan M. Zupancic of Slovenia wrote in a concurrence. “It is time that the pendulum swung back to a different kind of balance between what is private and secluded and what is public and unshielded.”

The differing conceptions can have profound consequences. “Europeans are likely to privilege privacy protection over both economic efficiency and speech,” Susan P. Crawford, who teaches Internet law at the University of Michigan, wrote in an e-mail message. “They’re willing to risk huge economic losses and erect trade barriers in order to protect privacy.”

The Italian prosecution would be unimaginable in America. The Communications Decency Act of 1996 leaves online companies free of liability for transmitting most kinds of unlawful material supplied by others. Prosecutions for truthful speech on matters of public interest are almost certainly barred by the First Amendment.

Still, said Marc Rotenberg, executive director of the Electronic Privacy Information Center, there may be something to learn from the Italian episode. “This video was enormously controversial, widely seen and very upsetting,” he said. “Sometimes,” he added, “there are egregious acts and there should be some responsibility.”

But Professor Crawford cautioned against thinking about the problem in categorical terms. Privacy is a broad enough concept, and Europe and America are varied enough, that it is easy to find counterexamples. Britain, for one, is only slowly moving toward the Continental model.

And what Italian prosecutors labeled a battle over principle may well have had another goal.

“Italian media is full of naked women and embarrassing revelations about both celebrities and ordinary people,” Professor Crawford wrote. “Any concern for privacy in this case is a pious cover for an (also naked) assertion of power over online companies.”

In some ways the Italian video represents the easy case. Google was merely a conduit for other people’s information, and that may well be enough to protect it in most of Europe.

The harder cases arise when Google is more active in gathering and disseminating information, as in its StreetView service, which provides ground-level panoramas gathered by cars with cameras on them. The program has generated legal challenges in Switzerland and Germany.

“Google is digitizing the world and expecting the world to conform to Google’s norms and conduct,” said Siva Vaidhyanathan, who teaches media studies and law at the University of Virginia. “That’s a terribly naïve view of privacy and responsibility.”

When American and European Ideas of Privacy Collide

Hot News: Earnings Preview: Dish Network Corp.

BERLIN/ZURICH (Reuters) – German politicians were divided at the weekend over whether to buy the bank data of up to 1,500 possible tax evaders with accounts in Switzerland that media say an informant has offered to sell authorities.

The respected Frankfurter Allgemeine Zeitung reported that the whistleblower is asking for 2.5 million euros for the confidential data, which tax investigators believe could rake in 100 million euros for German state coffers.

The case risks prompting a fresh row over bank secrecy between Germany and Switzerland. Top Swiss politicians, including President Doris Leuthard, and bankers warned Germany against acquiring the data.

Without citing sources, Financial Times Deutschland reported in its online edition that the data belonged to German clients of HSBC (HSBA.L) and was among the information stolen from its private banking arm in Geneva by ex-employee Herve Falciani.

France already acquired some of that information last year by raiding the computer specialist's house, and used it to track down fraudsters, infuriating Switzerland.

A spokesman for the German Finance Ministry declined to comment on the report but said it would be the responsibility of individual German states to deal with such data.

A senior ally of Chancellor Angela Merkel, Defense Minister Karl-Theodor zu Guttenberg, said Germany would have to carefully check its legal right to purchase the alleged data cash advance.

"I have a problem with handing over money for something that has come into someone's possession in a legally questionable fashion," Guttenberg told Swiss daily Neue Zuercher Zeitung.

Members of the opposition Greens and Social Democrats (SPD) however encouraged the government to buy the data on behalf of "honest taxpayers."

Nicolette Kressl, SPD finance expert, told Die Welt am Sonntag the government should proceed as it did in 2008, when it purchased data on tax evaders from an informant about clients of a Liechtenstein bank.

The case snared former Deutsche Post chief Klaus Zumwinkel, who was given a suspended jail term for evading nearly a million euros in taxes using a Liechtenstein trust.

Former Finance Minister Peer Steinbrueck repeatedly accused Germany's neighbors Switzerland, Liechtenstein and Luxembourg of serving as havens for German tax evaders, but the three countries have taken steps in the last year to improve transparency on taxes amid a global crackdown on tax havens.

(Reporting by Sarah Marsh and Hans-Edzard Busemann in Berlin and Catherine Bosley in Zurich; writing by Sarah Marsh; editing by Andrew Roche)

Germany divided over buying secret Swiss bank data

HONG KONG (Reuters) – Stocks in Asia tumbled on Friday, hurt by weak technology and resources shares and fresh worries about Greece's debt levels, which dragged the euro to a six-month low against the dollar.

However, leading European shares (.FTEU3) were expected to inch higher, halting the market's worst sell-off in a year, despite mounting worries about weak euro zone members.

U.S. stock futures pointed to a slightly weaker open after key Wall Street indexes fell by up to 1.9 percent overnight as poor earnings and outlooks from Motorola (MOT.N) and Qualcomm (QCOM.O) dented optimism in the tech sector. (.N)

A massive recall of millions of vehicles by the world's top automaker Toyota Motor Corp (7203.T) added to concerns about corporate earnings, while falling commodity prices hurt miners such as BHP Billiton Ltd (BHP.AX).

Samsung Electronics (005930.KS), the world's top maker of memory chips and LCD screens, failed to lift the gloom despite its forecast-beating earnings as Asian shares head for their worst monthly decline since January 2009.

Asia Pacific stocks outside Japan as measured by MSCI (.MIAPJ0000PUS) fell 2 percent to a 2-month low, with the materials index down 3.4 percent and the technology index off 1.8 percent.

Concerns over public finances in Greece and Portugal pulled the euro down to a six-month low against the dollar and a nine-month low versus the yen, a trend which has gained momentum as investors cut risky trades which had been funded by borrowing in the yen and dollar.

Investors have also been nagged this week by fears that the global economic recovery may be losing momentum, China's steps to cool its surging economy and political and regulatory wrangling in Washington.

"There is a general adjustment going on in risk appetite and risk sensitivity," said Peter Redward, head of Emerging Asia Research, Barclays Capital.

But he said the recent drop has been orderly and the sell-off has been notable because of the absence of panic.

"It shows there hasn't been a lot of large option-related, speculative position building. There isn't a lot of gamma floating around in terms of equities or fx," he added, referring to derivatives instruments which when triggered can lead to accelerated selling.

According to data from fund tracker EPFR Global, emerging markets equity funds saw their first week of net outflows in the period ended January 27 after 11 weeks of inflows as investors pared back their exposure amid fears of slowing growth in China, where authorities are reining in bank lending.

U.S. equity funds saw their biggest weekly outflow since late June while European equity finds suffered net redemptions for the third week in five, the data showed same day payday loans. But bond funds saw inflows, particularly emerging market local currency-denominated bonds.

The recent strength of the yen currency also hammered Japanese stocks, which received a further setback after Toyota announced it would extend to Europe and China a recall of millions of vehicles due to faulty accelerator pedals and floor mats.

Japan's Nikkei average (.N225) fell 2 percent to a six-week closing low, hurt by negative earnings surprise from chip equipment maker Advantest Corp (6857.T) which came after Nippon Steel Corp's (5401.T) warned of a first annual net loss in seven years. Advantest shares tumbled more than 10 percent.

Toyota fell 2 percent, bringing its losses this week to around 14 percent.

But analysts said broader market selling appeared to be largely driven by short-term investors, and funds with a longer-term horizon remained upbeat on the region's fundamentals.

"Some markets are quite oversold at the moment — the 12 month fundamentals for economies and earning are likely to be reasonably good," said Khiem Do, head of the Asia multi-asset group at Baring Asset Management, which oversees $50 billion.

"Prices are getting cheaper as a result of the liquidation of trading position. Our view is positive over next 6-12 months."

CURRENCIES

Currencies linked to global growth such as the Australian dollar and the New Zealand dollar fell to multi-week lows as investors moved out of higher-risk assets and on caution ahead of U.S. fourth-quarter GDP data to be released later on Friday at 8:30 a.m. EST.

Even though data on Thursday showed U.S. durable goods orders rose and jobless claims fell in the world's largest economy, analysts are wary it is not a strong recovery.

Mixed economic data from the world's other leading economies also continues to keep investors cautious.

After Japan's better-than-expected export growth earlier this week, data released on Friday showed the economy was in the grips of deflation with core consumer prices marking their tenth straight month of decline.

In commodities markets, crude oil looked set for a possible fourth day of losses sparked by forecasts of tepid oil demand in rich industrialized nations. U.S. crude futures eased 20 cents to $73.44 a barrel.

A firm dollar and concern over the pace and scope of credit tightening in China drove Shanghai copper down 3.5 percent, following a drop in London prices in the previous session.

(Editing by Kim Coghill)

Asia shares slide on resources, euro zone woes

Stock prices fell sharply on Friday, the worst day of trading this year, as worries over the strength of the American consumer eclipsed a round of mostly positive earnings reports.

On its surface, the news that JPMorgan Chase had doubled its 2009 profits from 2008 might seem reason for elation among investors. But on Friday, Wall Street traders took one look at the results and began to sell.

By the end of trading, the three major indexes were down about 1 percent, with the Dow Jones industrial average falling nearly 101 points. The dollar strengthened, and bond yields fell.

Traders saw promise and peril in JPMorgan Chase’s financial report. The bank said it earned $11.7 billion last year and that its profit quadrupled in the fourth quarter, beating expectations. But the firm’s chief executive noted that losses on consumer loans remained high and would remain an issue in 2010.

“It does continue to bring up old fears,” said James W. Paulsen, chief investment strategist for Wells Capital Management.

The Dow Jones industrial average declined 0.94 percent, or 100.90 points, to 10,609.65. The Standard & Poor’s 500-stock index fell 1.08 percent, or 12.43 points, to 1,136.03. The Nasdaq composite index dropped 1.24 percent, or 28.75 points, to 2,287.99.

For the week, the Dow industrials slipped 0.1 percent, the S.& P. 500 index lost 0.8 percent and the Nasdaq fell 1.3 percent.

All sectors posted losses, with shares of banks leading the retreat. JPMorgan Chase declined 2.26 percent, and Bank of America fell 3.33 percent. Many banks will report earnings next week.

Two weeks into the new year, Wall Street finds itself searching for direction. Over the next few weeks, companies will continue to announce fourth-quarter earnings, and the results are expected to be mostly positive.

Expectations this quarter, however, have shifted, and investors are looking for indications that businesses have moved beyond cost-cutting and have started to bring in revenue.

After the market closed on Thursday, Intel reported a 28 percent increase in revenue and the largest gross profit margin in its history. Overnight, its shares climbed, but they closed down 3 free copy of my credit report.17 percent on Friday.

That seemingly irrational behavior, selling even as a company exceeds expectations, brought an adage to the minds of several investors: “Buy the rumor, sell the news.”

“It is an interesting juxtaposition,” said Hank B. Smith, chief investment officer for Haverford Investments. “These all beat expectations, but by the time all the news is disseminated, there’s concern this may be the peak for profit margins for these companies.”

Mr. Smith said he did not believe the worries were valid. But he said Wall Street’s negative reaction to the cheery reports could indicate that investors were using the earnings season as a selling opportunity.

“It would be healthy for the market to consolidate and pull back,” Mr. Smith said. “It’s very normal to have a correction — defined as 10 percent or more — in a bull market.”

After an energetic rebound in the stock market last year, equities are expected to rise modestly through 2010. The Dow is approaching a psychologically important milestone — 11,000 points, a level not seen since before the financial crisis — and the S.& P.’s 500-stock index is nearing 1,150 points.

Economic data released on Friday provided little relief from investors’ concerns over profits. A report said manufacturing activity fell slightly in December, and a barometer of consumer sentiment released by the University of Michigan rose slightly this month but fell short of expectations.

Still, there were signs that the near-zero interest rates may remain in place for some time, a boon for stocks. A Labor Department report suggested inflation was largely in check, with consumer prices increasing just 0.1 percent in December.

Interest rates were lower Friday. The Treasury’s 10-year note rose 15/32, to 97 16/32, and the yield fell to 3.68 percent from 3. 74 percent late Thursday.

United States markets are closed on Monday for Martin Luther King’s Birthday.

Dow Plunges 100 Points On JPMorgan’s News

RIYADH (Reuters) – Three Saudi banks posted fourth-quarter earnings below forecasts, hit by a slowdown in lending growth and higher provisions, with Saudi Hollandi Bank (1040.SE) making its first quarterly loss in two years.

The earnings could reignite investor fears over the impact of the global crisis and a multi-billion dollar default by two family-owned businesses although local officials said the Saudi financial system has withstood these with little damage.

Saudi banks also bore the brunt of a slowdown in lending in 2009 after years of fast credit growth that brought the domestic banking system to its limits.

Both Hollandi and Banque Saudi Fransi (1050.SE) — which reported its lowest quarterly net profit in at least five years — blamed provisions for poor earnings in 2009.

Samba Financial Group (1090.SE), the second biggest Saudi lender by market value, was the only lender to record a small rise in net profit but was still below the lowest forecast in a Reuters poll.

Hollandi, partly owned by Royal Bank of Scotland (RBS.L), said on Sunday it made a net loss of 439.4 million riyals ($117 million) in the three months to end-December, having made a net profit of 309 million a year earlier.

It was the first quarterly loss by Hollandi since the fourth quarter of 2007 when it lost 106.3 million riyals.

For 2009, Hollandi made a net profit of 85.9 million riyals, down from 1.22 billion in 2008.

"The decline in net profit is mainly due to the bank's conservative policy aimed at continuing to boost provisions," Hollandi said, adding its loans portfolio fell 6 percent by the end of 2009 while deposits rose 4 percent guaranteed unsecured personal loan.

PROVISIONS WEIGH

Saudi Fransi, 31.1 percent owned by French bank Credit Agricole (CAGR.PA), said fourth-quarter net profit fell 43.3 percent after it booked provisions to support its finances.

Fransi made 324 million riyals, almost half the lowest forecast in a poll.

It was Fransi's lowest quarterly net profit since at least the fourth quarter of 2004 when it made a net profit of 374 million riyals, according to Reuters data. For 2009, Fransi made a net profit of 2.47 billion riyals, also the lowest since 2005.

"The decline in earnings is due to the volume of provisions that were made during that year (2009) to continue supporting the bank's financial position," Fransi said.

Fransi said its loans portfolio fell 3.7 percent by the end of 2009 while deposits slid 2.2 percent.

Samba saw its net profit inching up 1.1 percent year-on-year in the fourth quarter, but was still below all forecasts. It made 835 million riyals, the lowest quarterly profit in a year.

Samba said its loans portfolio fell 14 percent by the end of 2009 to 84 billion riyals while deposits rose 10 percent to 147 billion.

(Writing by Souhail Karam; Editing by Thomas Atkins and Dan Lalor)

Lending slowdown, provisions hit Saudi banks in Q4

In the fall of 2000 all the buzz in the television business was about a new drama on CBS on Friday night.

Not “CSI” — that had no buzz at all. All it had was ratings. No, the buzz that fall was about the remake of “The Fugitive,” the classic innocent-man-on-the-run series from the 1960s.

The redo seemed a can’t-miss idea. But it lasted 23 episodes.

And then there was “Bionic Woman.” The NBC remake in 2007 of that sci-fi chestnut from the 1970s started out as the hottest new show of that fall season — and was gone after all of nine episodes.

There might be a lesson in there somewhere, but you would not know it from looking at the development lists at three networks this winter. Among the most prominent projects under consideration as new series next fall are these familiar names: “The Rockford Files” on NBC; “Charlie’s Angels” on ABC; and “Hawaii Five-O” on CBS.

All of the projects were announced with some fanfare by their networks, though the program creators and top network entertainment executives were reluctant to discuss any specifics about the new versions yet, saying they were still in the writing stages. But the network executives expressed genuine excitement about the possibilities for the projects.

It is easy to understand why. “It’s a good idea to try,” said Warren Littlefield, who was the top programmer at NBC and is now an independent producer. “Movies have proved you can do well with a presold concept.”

That is another way of saying it is only natural to turn to familiar titles because they attract attention. The question is whether the series that result will attract viewers.

The track record does more than suggest not: it screams not. In the history of network television, no remake of a previous hit series has ever become a hit itself on network television.

Plenty have been tried. In recent years there have been efforts to revive both “Beverly Hills 90210” and “Melrose Place” on the CW network. No one would claim either approaches the success of their predecessors, or even passable hit status.

NBC created a splash when it brought back “Knight Rider” — featuring a talking car — as a two-hour movie in 2008, but a series version later that year hit the skids quickly.

Earlier in the decade the highly successful “Law & Order” producer Dick Wolf tried a remake of the hoary classic “Dragnet” and barely made it through one season. (Who remembers that Ed O’Neill played Joe Friday and that one of the co-stars was Eva Longoria?)

How many people could pass a quiz on who replaced Rod Serling as host of UPN’s 2002 version of “The Twilight Zone”? (Forest Whitaker, actually.)

Digging through the files of series past, one could perhaps make an argument for some shows spawned from original hits. “Star Trek,” of course, gave birth to four separate series, but those were all spinoffs. They were not remakes of the original with the same characters.

All of those characters appeared instead in a series of theatrical movies, where television remakes have been far more successful: “Mission: Impossible,” “Get Smart,” “The Addams Family” and “The Brady Bunch,” to name a few.

“Battlestar Galactica,” a flop on ABC in 1978 (21 episodes), returned to a more favorable reception on the Syfy network in 2004, but that was on cable, not broadcast television.

“Dragnet” itself looks like a potential outlier cash till payday. It started as a radio series and made it to television in 1951. That run ended in 1959. But “Dragnet” came back in 1967 and was again a success. That would seem to qualify it as a remake hit.

But the second show was less remake than revival: It still starred Jack Webb playing Joe Friday with the same ominous theme music and intro about names being changed to protect the innocent.

The familiar titles on the current development slates are true remakes: “Charlie’s Angels” will star three new actresses as young women who are knockouts in looks and martial arts; “Hawaii Five-O” is still expected to be led by a no-nonsense type named McGarrett (and maybe even backed by a young aide named Danno); and “The Rockford Files” will inevitably feature a detective named Jim Rockford.

Perhaps more important for that show is that it will also feature a creator with one of the best recent résumés in television. “Rockford” is being written by David Shore, the chief creative force behind the hit drama “House.” Mr. Shore has said that “Rockford” was one of his favorite shows growing up and that he hopes to find a way to replicate its mixture of comedy and action.

But replicating a star on the level of James Garner, who played Rockford, may prove more challenging.

Mr. Littlefield said having a talent like Mr. Shore running the show would be a great advantage to a new “Rockford,” but he added, “I don’t think there are many gumshoe detectives around anymore, so the key will be how they reinvent the character.”

“Hawaii Five-O” is being created by the team of Alex Kurtzman and Roberto Orci, who wrote the scripts for the most recent “Star Trek” movie as well as the two “Transformers” films.

The issue of how much to remake and how much to reinvent has dogged previous efforts at bringing back familiar shows and characters. Fans and those who merely have heard of the old hits have tended to turn up for the initial episodes (and for two hours’ worth of a movie rendering), but have not stayed around once they got a whiff of what the new version was really like.

“The identity of a hit TV series is so intimately tied to the original stars, style and attitude that made it a hit in the first place that any deviation from that creates a real sense of aesthetic dissonance,” said Robert J. Thompson, a professor of television and popular culture at Syracuse University.

“This may be one case where an established brand is more a liability than an asset. In television, it’s a much safer approach to rip off an old idea than to try to remake one. It’s a perfectly plausible plan to develop a new TV show about three beautiful women fighting crime in fabulous clothes; maybe not such a good idea to call it ‘Charlie’s Angels.’ ”

Mr. Littlefield said that the woeful track record of previous remakes should not discourage network programmers from continuing to buy projects based on old hits. “But there has to be a series there,” he said. “It can’t be like a movie. You can’t trick them.”

Mr. Littlefield suggested a formula that could work: “At the risk of being oversimplistic: it also has to be good.”

Why Studios Keep Cranking Out TV Remakes, Despite the Flops

LONDON (Reuters) – Bailed-out U.S. insurer American International Group (AIG.N) plans to file a prospectus for a multibillion-dollar IPO of its Asian life insurance unit before Christmas, the Financial Times reported on Thursday.

The Hong Kong IPO of American International Assurance is expected to raise $10 billion to $20 billion, the paper said.

"AIA and its advisers are working round the clock to submit the filing before Christmas," the paper quoted a person familiar with the matter as saying. "Nobody involved wants this to hang around for much longer."

Filing a draft prospectus with stock exchange authorities before Christmas would trigger a formal three-month process that would set a path for a listing in the second quarter of 2010, the paper said inferred heaters.

AIG has appointed Deutsche Bank (DBKGn.DE) and Morgan Stanley (MS.N) as its joint global coordinators of the IPO, which will generate huge fees for the banks involved.

Goldman Sachs (GS.N) and Citigroup (C.N), which both advised on an aborted sale of AIA earlier this year, have emerged as front runners for more junior book-runner positions, along with Credit Suisse (CSGN.VX)(CS.N), the Financial Times said, citing people familiar with the situation.

(Reporting by Kylie MacLellan; Editing by Gary Hill)

AIG to file prospectus for AIA IPO: report

The government would strengthen financial support to sectors including farming, science and technology, education, health care, social security, affordable homes, energy saving and environmental protection in 2010, according to participants of the conference. The country would tightly control loans targeted at high energy-consuming, high polluting industries and those with excessive production capacity in a bid to improve loans quality and efficiency, according to the meeting. The Central Economic Work Conference comprises policy-making officials from central and provincial-level governments.
China vows to promote transformation of development pattern in 2010 BEIJING, Dec. 7 (Xinhua) — The Chinese government pledged Monday to push forward the transformation of economic development pattern next year while maintaining a stable and comparatively fast economic growth. The three-day annual Central Economic Work Conference, agreed that the global financial crisis highlighted the urgency to transform China’s economic development pattern instant payday loans completely online.Full story China opens key economic work meeting, policies expected to continue Delegates attend the Central Economic Work Conference in Beijing, capital of China, Dec. 5, 2009. (Xinhua/Ju Peng)
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BEIJING, Dec. 5 (Xinhua) — China’s decision makers gathered here Saturday to determine economic policies for 2010, aiming to better deal with the impact of the international financial crisis and consolidate the foundation for economic recovery.

The Central Economic Work Conference, an annual event initiated more than a decade ago, started days after China said it would continue the proactive fiscal policy and moderately easy monetary policy next year. Full story Special Report: Global Financial Crisis

China to continue fiscal and monetary policies next year

NEW YORK (Reuters) – U.S. stock index futures rose on Thursday after Bank of America Corp said it would repay $45 billion in taxpayer bailout funds.

Bank of America (BAC.N) shares rose 4.5 percent to $16.35 in premarket trade after the surprise announcement on Wednesday, which marks a victory for outgoing Chief Executive Kenneth Lewis and could free the top U.S. lender from pay curbs as it looks to hire a new CEO. For details, see [ID:nN0250856]

The Select Sector SPDR Financial ETF (XLF.P) rose 1.2 percent to $14.66.

"The news out of Bank of America and most likely the economic data continuing to show the economy is in a growth mode means we are looking at a market that will move higher," said Peter Cardillo, chief market economist at Avalon Partners in New York.

"The risk factor continues to grow, which is supporting higher equity prices."

Investors awaited data on productivity, weekly jobless claims and ISM non-manufacturing index as well as November same-store sales from major retail chains. Early data from Thanksgiving weekend shopping from Thursday through Sunday showed only a slight increase in sales, pressuring retailer shares.

Comcast Corp (CMCSA.O) struck a deal to buy a majority stake in NBC Universal from General Electric Co (GE.N), creating a media superpower that would control production as well as delivery to the home.

S&P 500 futures rose 4 freecreditreport.5 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures gained 37 points, while Nasdaq 100 futures added 4 points.

Costco Wholesale Corp (COST.O) posted a 6 percent rise in November same-store sales, aided by an increase in gas prices and a weaker U.S. dollar, but fell short of estimates.

Luxury homebuilder Toll Brothers Inc (TOL.N) recorded a wider-than-expected quarterly loss, but said it was seeing signs of recovery from a declining cancellation rate and an improved pace of contract signings.

Federal Reserve Chairman Ben Bernanke will go before lawmakers considering his nomination to a second term at the central bank's helm.

European shares edged higher for a third consecutive session Thursday as Bank of America boosted financials. [ID:nGEE5B20SR] Asian stocks also advanced, led by a nearly 4 percent jump in the Nikkei index.

The Nasdaq rose Wednesday as strong online holiday sales boosted retailers, while the Dow edged lower as falling oil prices prompted a sell-off in energy shares, and the Standard & Poor's 500 finished flat.

(Reporting by Chuck Mikolajczak; editing by Jeffrey Benkoe)

Bank of America repayment plan lifts futures

DUBAI/LONDON (Reuters) – Banks outside the Gulf played down their exposure to Dubai debt on Friday after fears of default shook global markets, and European leaders said the world economy was now strong enough to cope with the setback.

Stocks from Tokyo to London were haunted by concerns that banks were exposed to state companies in Dubai, whose rise from a desert backwater into the business hub of the world's top oil exporting area lured expatriate cash and executives.

The crisis began on Wednesday when Dubai, part of the United Arab Emirates federation, asked to delay payment on billions of dollars of debt issued by conglomerate Dubai World and its main property subsidiary Nakheel, developer of three palm shaped islands that once attracted celebrities and the super-rich.

"While it is a setback, I think we will find it is not on the scale of previous problems we have dealt with," British Prime Minister Brown told reporters in Port of Spain, where he will attend a summit of leaders from Commonwealth countries.

"The world financial system is stronger now and able to deal with the problems that arise," he said.

French Prime Minister Francois Fillon said there were enough resources in the region to make sure there would not be a second round of the financial crisis although at a joint news conference, Russian premier Vladimir Putin said the saga showed it would be tough for the world to shake off the financial crisis which has gripped it for two years.

Dubai World had $59 billion of liabilities as of August, most of Dubai's total debt of $80 billion. International banks exposure related to Dubai World reach $12 billion in syndicated and bilateral loans, banking sources told Thomson Reuters LPC.

But the numbers pale in comparison to the $2.8 trillion in writedowns the International Monetary Fund estimates U.S. and European lenders will have made between 2007 and 2010 as a result of the global credit crisis.

"The events in Dubai in recent days are one of the hiccups if you like, one of the difficulties, which affirms that we were right to highlight the uncertainty ahead of us and that the road ahead could be a bumpy one," European Central Bank Governing Council member Athanasios Orphanides said.

French banks said their exposure to the Dubai crisis was limited and Italy's central bank said Italian banks should face no problems linked to the Gulf trade and tourism hub. The sentiments were echoed by Chinese banks.

Those statements helped push European stocks into the black although U.S. stock futures pointed lower after markets were shut for the U.S. Thanksgiving holiday.

"We have seen a classic risk aversion reaction in the markets over the past 24 hours. The dollar has slumped, the yen is stronger," a Societe Generale note said. "At this stage, this setback looks to be one that is very much country specific."

ABU DHABI EXPOSURE

While European and Asian banks scrambled to distance themselves, lenders in Abu Dhabi, a fellow member of the UAE federation and home to most of the country's oil, appeared to have major positions.

Abu Dhabi Commercial Bank has at least 8-9 billion dirhams ($2.18-$2.45 billion) exposure to Dubai World and related entities, forcing the bank to book more provisions, a senior executive of the bank said immediate payday loans online. First Gulf Bank has at least 5 billion dirhams ($1.36 billion).

JP Morgan said it was less concerned about global banks' direct exposure to Dubai World and was not worried about Abu Dhabi, which is sitting on hundreds of billions of dollars.

"We are more concerned about the spillover effect within the UAE with CDS spreads in Abu Dhabi increasing," it said in a note. "It remains unclear if the Dubai government will support the liabilities of government related entities and how … neighbors will weather the storm."

The price of insuring Gulf debt surged again on Friday.

Credit default swaps (CDS) for Dubai rose more than 100 basis points but were well below previous peaks in the global crisis late last year and earlier this.

For related graphic, see:

http://graphics.thomsonreuters.com/119/ME_DBCDS21109.gif

Nakheel's Islamic bond prices extended losses, falling 30 points to a record low of 40, according to Reuters data.

The $3.52 billion bond at the center of the crisis, which was originally due to mature on Dec 14, 2009, had traded as high as 110 on Wednesday before the Dubai government said it would ask creditors to agree on a standstill of debt held by Nakheel and Dubai World until May 2010.

The debt crisis in Dubai also pushed up debt insurance costs for other sovereigns in the Gulf, a wealthy region Western firms had turned to for help at the height of the credit crunch.

TRANSPARENCY, CREDIBILITY

Analysts expect Dubai to receive financial support from Abu Dhabi, though it may have to abandon an economic model focused on developing swathes of desert with foreign money and labor.

But the prospect of a bailout did little to allay concerns among investors, already worried the global economy may not be recovering quickly enough to justify a near doubling of prices for emerging market stocks and many commodities since March.

International fund managers said they were considering rotating dedicated money out of Dubai and into Abu Dhabi, Qatar and Egypt after local markets begin to open on Monday after the Muslim Eid al-Adha holiday.

Analysts also said the timing of the announcement on the eve of the holiday, the lack of prior communication with bondholders, and the scant details given on how a debt rescheduling would work had dented Dubai's credibility.

"The way the announcement was made, including its timing has caused damage to Dubai's credibility," Ghanem Nuseibah, senior analyst at Political Capital Policy Research & Consulting Institute. "This will take a very long time to repair."

UAE media either ignored the crisis or put a positive spin on the news on Friday. Abu Dhabi-based financial daily Alrroya Aleqtissadiya carried the headline "European markets overreact to Dubai's bond news."

(For graphic of a simplified breakdown of the various holdings of Dubai World, Dubai Holding and Investment Corporation of Dubai click:

http://graphics.thomsonreuters.com/119/ME_DBSTR1109.gif)

(Writing by Lin Noueihed, reporting by Raissa Kasolowsky, Martina Fuchs and Enji Kiwan in Dubai, Ulf Laessing in Saudi Arabia, Adrian Croft, Sujata Rao, Atul Prakash, Caroline Cohn in London and Michele Kambas, Editing by Mike Peacock)

Banks, world leaders play down Dubai debt threat