NEW YORK – A hotel has opened on the edge of ground zero, and executives say the view it offers on the World Trade Center site rebuilding is a selling point.

The World Center Hotel is still under construction on some floors but began taking reservations last month. Its Web site features photographs of a memorial and the construction.

The hotel offers some rooms with floor-to-ceiling windows that open directly onto the work site. Guests and members will have access to the restaurant patio with views of giant cranes, jackhammers and metal scaffolding auto loan rates.

Australian tourist Josh Rowlands says he would like to stay at a hotel with a view of the rebuilding, especially because it’s so hard to see into the pit from the street.

But German tourist Michael Meindorfer says he thinks staying there would be too sad.

Ground zero hotel wants to attract WTC tourists

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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

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PORT WASHINGTON, N.Y. (MarketWatch) — Beware of the law of unintended consequences.

Judging by the testimony that Federal Reserve Chairman Ben Bernanke is expected to give later this week to the House Financial Services Committee, it won’t be long before the central bank starts to drain some of the excess liquidity now sloshing around in the financial system, thus raising interest rates. (See WSJ story on outline of Fed’s ‘exit strategy.’)

It can’t come a moment too soon for the silent majority — the nation’s savers.

In its efforts to shore up the banking system, the Fed has neglected the needs of those who save. And in case you did not know it, savers make up the bulk of the population.

Business and governments are net borrowers; consumers are net savers. Foremost among those who save are those who are trying to build a nest egg for their retirement — not to mention those who are actually retired.

Lately, these folks and others who live on a fixed income have fallen behind the eight-ball. Besides losing some $13 trillion in wealth because of the drop in prices of homes and stocks several years ago, they have to deal with below-radar inflation, which is eroding the purchasing power of their savings. ( See March 24, 2009 column.)

To make matters even worse, many retirees are finding that their monthly Social Security payment has shrunk, compared with the amount they received last year, while those who are veterans on disability did not receive their annual cost-of-living increase in their pensions this year.

Since the end of 2008, those who keep their savings in a regular savings account at their neighborhood bank have earned virtually nothing on their savings because of the Fed’s ultra-low interest rate policy paydayloans.

The key overnight federal funds rate on which these interest rates are based has hovered in a range of 0%-0.25% for over 15 months.

In order for savers to earn a decent rate of return on their funds, their banks require them to lock up their money in a certificate of deposit for a number of years. Beyond that, savers have to turn to longer-dated Treasurys or take a chance with junk bonds or the stock market.

Borrowers, naturally, like low interest rates, especially the biggest borrower of them all — the federal government. The same goes for the banks.

Speaking of which, bedsides receiving less than a penny per dollar in their savings accounts, savers many times have to pay their banks a fee for maintaining these accounts as well as their checking accounts.

To add insult to injury, the banks have drastically reduced their lending to individuals and to most businesses. Instead, they prefer to take advantage of the big difference between their cost of funds and yields available on longer-dated securities and buy Treasurys.

Playing the yield curve, as this is called, has enabled the banks to earn hefty profits, thus hastening their return to a pink-cheeked state of health.

Since the banks are apparently in good financial shape, it’s time for the Fed to consider the needs of the silent majority — the nation’s savers — and raise rates so that they can become healthy, too.

Irwin Kellner: It’s time for the Fed to help savers

ATHENS, Greece – Greece is greeting European outrage over its dubious economic data with repentance, defensiveness and fear that no one will believe them again — even if they do clean up the statistics and accounting agencies slammed by an EU report for faking growth and deficit figures.

“Right now, even if everything they say is correct, they are not going to believe it,” Manolis Kontopirakis, who headed Greece’s statistics agency between 2004 and 2009, told the AP.

Kontopirakis quit shortly after Prime Minister George Papandreou’s Socialists took over from the conservative New Democracy government in October. He angrily refuted claims his agency had knowingly forwarded the faulty data, which he said had hurt Greece’s standing abroad.

“Credibility will return gradually,” he said. “It will come, but in due time. I don’t think that will happen in a few months or even a year.”

The 30-page European report suggests why. It accuses the two Greek statistical agencies, Kontopirakis’ National Statistical Service of Greece, or NSSG, and the General Accounting Office, of a string of offbeat practices and occurrences.

Page 18 of the report indicates that an unnamed general secretary of the NSSG — the post Kontopirakis held — “repeatedly contacted Eurostat claiming political interference over the provision of figures” between Oct. 12 and 21, just as the agency was preparing a revision of Greece’s numbers. Kontopirakis, however, denied being the official who made the calls.

“I was working totally independently and I had absolutely no pressure. And there was not an attempt made to ever, to ever change any data,” Kontopirakis said.

The government announced his resignation Oct. 22. Kontopirakis complained the government failed to defend his agency against allegations it was involved in producing the false data.

The government denies opposition claims that it overestimated the revised deficit figure to make its own fiscal recovery effort look more impressive.

Such recriminations are not new. In 2004, a new conservative government ushered in what it called “a new era of transparency” and revised the deficit upward by a factor of four. It accused the ousted Socialists of misreporting data, while the Socialists claimed it was a cynical attempt to blacken their record in office.

Fast-forward five years, and the situation is reversed. In a year of heavy borrowing and budget overruns across the EU, Greece is forecast to overtake Italy this year with Europe’s highest national debt at 125 percent of gross domestic product.

Government officials under new Finance Minister George Papaconstantinou are eager to show they are reforming the system. The new Socialist government says its has no illusions about the country’s debt crisis and has accused the previous conservative administration of issuing “tampered” figures cash advances pay day loan.

It has called for an urgent inquiry that could result in parliamentary hearings and even prosecution, after the deficit estimate for 2009 increased from 3.7 percent of gross domestic product to a shocking 12.7 percent.

Another problem identified by the report was an ongoing failure to accurately report debts run up by state hospitals, underreporting that by euro1 billion ($1.4 billion) in deficit calculations, despite separate NSSG figures showing the actual extent of the debt.

“This is to be considered as a case of deliberate misreporting of figures,” Eurostat said.

Shoddy accounting practices also include relaying data over the telephone without a corresponding written record, the EU agency said. Confidential deliveries to the military went unrecorded as expenditure.

Adding to EU anxiety, Eurostat said further revisions were possible for the 2008 and 2009 deficits.

The government has promised to revamp Greece’s statistics agency by March into an independent body tasked to verify government data instead of simply processing it.

The trouble for Athens is that the EU has heard many of the same promises before.

Since adopting the euro in 2002, Greece has only once complied with fiscal rules and kept its budget deficit below 3 percent of gross domestic product.

Greece’s economy makes up less than 3 percent of the 16-nation eurozone output. But its debt crisis has given Europe jitters about the high cost of a potential bailout, and raised fears that borrowing costs could soar for other vulnerable countries like Spain and Ireland.

That potential fallout has many Greeks worried they could be punished to set an example to other over-borrowing eurozone members. Some officials even say EU officials share some blame.

Manolis Drettakis, a former finance minister and economics professor, said Eurostat also carried some of the responsibility for signing off on past Greek budget figures despite successive inspections.

“What I find strange is that the people who today accuse the agency are the ones who approved the (data) from the statistics agency two and three years ago,” he said in an interview. “But the (EU) cannot push us into a corner as if we were not a member of the European Union. There must be some solidarity.”

“We are in a very difficult position,” said Stella Savva-Balfoussia, of Athens-based Center for Planning and Economic Research, an independent group that also carries out research for the government.

“No one has perfect figures … In our case, there were two very large revisions so the spotlight is on us. And now we have to be whiter than white — that’s difficult.”

Greeks fret about faulty data

WASHINGTON — Top Republicans on Wednesday were hostile toward President Obama’s plan to create a bipartisan commission on cutting projected deficits, raising doubts about the prospects of a main piece of his budget strategy.

Senator Mitch McConnell of Kentucky, the Republican leader in the Senate, was evasive when pressed by reporters at the Capitol. “I’m not going to decide today what we’re going to do in the future,” he said. But the House Republican leader, Representative John A. Boehner of Ohio, seemed to suggest that Republicans might not take their allotted seats on a commission.

“This sounds like political cover for Washington Democrats who are starting to realize that their out-of-control spending is scaring the hell out of the American people,” Mr. Boehner said of the tentative deal between the White House and Congressional Democratic leaders on Tuesday night.

Under that plan, Mr. Obama would establish by executive order an 18-member bipartisan panel to propose how to balance future tax revenue and entitlement program benefits. The group’s recommendations would be due by Dec. 1 — after the November elections. Then Congressional leaders would put the package to a vote.

Democrats expected that Mr. McConnell and Mr. Boehner would not be supportive given their party’s general opposition to raising taxes and to compromising with Mr. Obama. But Democrats figured that ultimately Republicans would be hard pressed to reject the president’s overture to help reduce the debt, since most of it results from tax and spending policies enacted in recent years, when Republicans controlled the White House and Congress.

The Democrats’ calculations on that and more were upended on Tuesday, when Republicans were emboldened after capturing a Massachusetts Senate seat.

Even two Republicans who have sponsored legislation with Democrats for a bipartisan budget commission — Senator Judd Gregg of New Hampshire, the senior Republican on the Senate Budget Committee, and Representative Frank R. Wolf of Virginia — were quick to oppose a presidential commission.

Mr. Gregg called the idea “a nothing-burger,” and Mr no fax cash advance. Wolf criticized it as “a back-room deal.” They objected that an executive order, unlike a law, could not mandate that Congress vote on the recommendations quickly and without amendments.

Democratic leaders in the House and Senate have pledged to hold a vote. On Wednesday, however, some moderate Senate Democrats were still awaiting “written assurances” from the speaker of the House, Representative Nancy Pelosi, according to Senator Kent Conrad, a Democrat from North Dakota who is chairman of the Senate Budget Committee and was Mr. Gregg’s co-sponsor of a bill to establish a budget commission.

Under the Democrats’ plan, the Senate would vote first on any recommendations from a commission. The House would vote only if senators approved the package.

Though details were in flux, Mr. Obama’s executive order would designate a panel with 10 Democratic members and eight Republicans. Twelve of them would be chosen by the House and Senate leaders of both parties, with each naming three lawmakers. The president would name six people, four Democrats and two Republicans.

The deal on a commission is intended to clear the way for Congress to vote, perhaps on Thursday in the Senate, to raise the $12.4 trillion debt limit enough to allow the government to continue borrowing to pay for its operations through this year.

Also as part of the agreement, Democratic senators are to drop their opposition to a House-passed bill for a so-called pay-go law, which would require that most new spending and tax cuts would have to be offset by tax increases or spending cuts, to avoid adding to the debt.

“We’ve got to get back to fiscal responsibility,” said Representative Steny H. Hoyer of Maryland, the House Democratic leader.

“Of course,” he added, “the key is going to be whether or not Republicans — both in terms of their appointment of people to the commission and cooperation with the statutory pay-go effort — will cooperate.”

Republicans Oppose Obama Deficit Panel

NEW YORK, Jan. 7 (Xinhua) — The U.S. stocks finished mixed on Thursday as investors await the employment report due on Friday.

Wall Street opened lower in the morning after the Labor Department said that initial claims for jobless benefits rose 1,000 to 434,000 in the week ended Jan. 2.

Stocks rebounded from earlier lows as upbeat December retail sales reports were released and increased forecasts lifted some retailers.

U.S. retailers overall posted a 2.9-percent increase, exceedingthe 2-percent rise analysts were expecting and marking the best performance since a 3.4-percent gain in April 2008, according to Thomson Reuters Data.

Retailers from Macy’s Inc and Nordstrom Inc to Aeropostale Inc and Limited Brands Inc raised their earnings outlooks.

However, traders were still cautious, awaiting the government’s December nonfarm payrolls report which is expected to shed more light on economic recovery and set the tone for the market in following weeks payday loan no faxing.

After losing just 11,000 nonfarm payrolls in November, some analysts expect payrolls to have declined by another 10,000 last month, lifting the unemployment rate to 10.1 percent, while others believe the report may show some job creation.

Shares of Sears Holding Corp rose 11.6 percent to 99.18 U.S. dollars after forecasting strong fourth-quarter profit.

GE shares rose 5.2 percent to 16.25 dollars after J.P. Morgan raised its price target, saying investors underappreciate potential earnings recovery at the GE Capital finance unit.

The Dow Jones added 33.18, or 0.31 percent, to 10,606.86. The Standard & Poor’s 500 index was up 4.54, or 0.40 percent, to 1,141.68 and the Nasdaq was down 1.04, or 0.05 percent, to 2,300.05.

Wall Street trades mixed as investors await key employment data

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TOKYO, Dec 30 (Reuters) - Shares of Japan Airlines Corp tumbled 32 percent to a record low on Wednesday on growing investor worries the struggling carrier will be restructured in bankruptcy court as part of a state bailout.

Sources have told Reuters that a state-backed turnaround fund now weighing whether to support JAL is considering using a bankruptcy procedure similar to Chapter 11 in the United States as part of its restructuring plan.

“Today’s slide reflects mounting expectations that JAL is headed for a court-led reorganisation,” said Takahiko Kishi, an airline analyst at Mizuho Investors Securities.

Shares of JAL were down 32 percent at 60 yen as of 0047 GMT, a record low for the carrier. The benchmark Nikkei average was virtually flat.

Japan Airlines applied for a bailout in late October from the Enterprise Turnaround Initiative Corp of Japan (ETIC), an organisation of turnaround specialists that can draw on state-guaranteed funding to offer financial aid to ailing firms.

The ETIC is expected to make a decision on whether to support JAL next month easy payday loans. The ETIC can draw on 1.6 trillion yen in state-guaranteed funding in the current fiscal year to March for loans and investments into struggling but viable firms.

The ETIC has told JAL’s creditors that it was considering a plan under which the airline would apply for court protection under the Corporate Rehabilitation Law, but it has not ruled out a private, out-of-court restructuring, sources have said.

Bankruptcy proceedings usually lead to a sharp cut in the payment of sales receivables and other creditor claims. There is a risk JAL would not be able to make payments for fuel, parts and other transactions needed to keep flying.

The ETIC plans to keep paying for such transactions if JAL files for bankruptcy, the Nikkei newspaper reported earlier on Wednesday, adding that airport usage fees and insurance policy premiums would also be guaranteed.

Shares of Japan Airlines Drop to Record Low

MILAN (Reuters) – Italian chocolate giant Ferrero said it is still examining its options on a possible bid for Britain's Cadbury PLC (CBRY.L), daily La Stampa reported on Sunday.

Cadbury has rejected a $16.2 billion offer from U.S. food group Kraft (KFT.N). U.S.-based Hershey Co (HSY.N) and the unlisted family-owned Ferrero have said they were contemplating bids.

Ferrero is "still evaluating the possibility of acquiring the British sweets group," the newspaper said, quoting from a company statement cash advance america. Without citing sources, it however added that Ferrero's interest had cooled.

Ferrero, known for its Nutella spread and Tic-Tac sweets, could not immediately be reached for comment.

In November, Ferrero said it was in the preliminary stages of evaluating options in respect of Cadbury.

(Writing by Nigel Tutt; editing by John Stonestreet)

Ferrero says still mulling Cadbury bid: report

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HONG KONG (Reuters) – Gold surged to an all-time high above $1,200 an ounce on Wednesday, hitting a record for a second straight day, and Asian stocks advanced as investors chased riskier assets offering higher returns.

Spot gold rose 1 percent to $1,208.70 amid a broad rally in commodities on expectations of rising global demand, fueled by upbeat U.S. home sales and analysts' forecasts that China's economy could grow by 10 percent or more this quarter.

Copper touched its highest level in 15 months.

Gold was also supported by weakness in the U.S. dollar, which was again on the defensive while the euro and high-yielding currencies extended gains as investor risk appetite showed little sign of waning as it usually does heading into the year end.

The dollar was flat against a basket of major currencies (.DXY), while the yen came off earlier lows amid disappointment that emergency steps announced the Bank of Japan on Tuesday, primarily short-term funding for banks, did not go further to tackle deflation or help alleviate upward pressure on the yen.

The yen was trading at 86.91 to the dollar, up from Tuesday's low of 87.54. It has gained more than 4 percent this year, raising worries that exports are growing less competitive, threatening to tip Japan back into recession.

Some analysts had expected the BOJ to signal a return to a narrow form of quantative easing seen in 2001-06, when it slashed interest rates to zero and flooded markets with cash in a bid to spur growth.

"The BOJ squandered any possible 'announcement effect' that would have bolstered the attempts to weaken the yen," said Glenn Maguire, chief economist at Societe Generale in Hong Kong. "The entire episode seems to have the notion of 'rushed' all over it."

SHARES ADVANCE, OIL RETREATS

Investors pumped money back into equities across most of Asia as fears eased about potential global contagion from Dubai's debt repayment problems and after data showed pending U.S. home sales reached a three-and-a-half year high in October.

In addition, a survey by the Institute for Supply Management showed the U.S. manufacturing sector expanded last month for a fourth month, although by less than expected quick pay day loan. The reports helped push the Dow Jones (.DJI) up 1.2 percent to a 14-month closing high. (.N)

The MSCI index of Asia Pacific stocks traded outside Japan (.MIAPJ0000PUS) was 1.3 percent higher while the Thomson Reuters index of regional shares was up 0.6 percent.

Japan's Nikkei share index (.N225) bucked the rest of Asia, dipping 0.2 percent on disappointment over the BOJ actions and the country's shaky economic outlook.

A Reuters Tankan survey showed Japanese manufacturers' confidence was at a one-year high but still negative and the pace of economic recovery is expected to slow.

Japanese government bond futures also fell after the central back action fell short of market expectations.

The commodities rally lifted shares in Australia where the benchmark index (.AXJ0) was up 1 percent as copper miner Kagara Ltd (KZL.AX) rallied 7 percent and gold miner Newcrest Mining (NCM.AX) jumped 5 percent.

Shares of Asian car makers also got a lift after data showed U.S. car sales rose in November, which analysts said was a further sign that the world's biggest economy is recovering.

Shares of South Korea's Hyundai Motor Co (005380.KS) climbed 1 percent after its U.S. sales rose 46 percent last month, putting it on course to boost its U.S. market share by a third this year.

Japan's Nissan Motor (7201.T) reported a 31 percent jump in U.S. sales last month, boosting its share price by 2 percent.

Oil prices eased 0.4 percent to around $78 a barrel after American Petroleum Institute data showed U.S. crude stocks rose much more than expected last week.

"Inventories are still high while demand is relatively subdued, but the downside is limited … when prices decline it attracts new buying supported by the view on macro economic recovery," said David Moore, commodities strategist at Commonwealth Bank in Sydney.

(Additional reporting by Nick Trevethan in Singapore and Anirban Nag in Sydney; Editing by Kim Coghill)

Gold sets new record, risk appetite helps global stocks

GENEVA (Reuters) – Swiss bank UBS (UBSN.VX) is threatening to move its headquarters out of Switzerland if the authorities impose too many new regulations in the wake of the global financial crisis, Swiss weekly paper Sonntag CH said.

Oswald Gruebel, chief executive of Switzerland's biggest bank by assets, made the threat in a speech to businessmen last week, citing the possibility that the authorities would force major banks to reorganize as holding companies, the paper said on Sunday.

A UBS spokeswoman declined to comment on the report.

Gruebel spoke to the Zurich Business Club on Thursday at a closed-door event at which reporters were not present.

The idea of forcing banks in Switzerland to operate as holding companies is part of the discussion on supervising banks deemed "too big to fail."

Switzerland's relatively small economy is dominated by two mega-banks, UBS and Credit Suisse (CSGN.VX).

Swiss National Bank Vice-Chairman Philipp Hildebrand, noting total banking assets are more than seven times the size of Swiss gross domestic product, said earlier this month that the country urgently needed tougher regulatory standards than other countries given the relative size of its banks. [ID:nLI129832]

The Swiss government bailed out UBS in October 2008 by injecting 6 billion Swiss francs ($5 fast cash now.95 billion) in return for a stake of some 9 percent, subsequently sold at a profit.

UBS also originally planned to transfer some $60 billion in illiquid assets to the central bank, but this was later reduced to $39 billion.

Swiss regulators believe that forcing multinational banks to operate as national institutions in different countries, controlled by a central holding company, would allow the authorities in a crisis to rescue the Swiss company while letting foreign subsidies go under, the paper said.

But such a structure would oblige the bank to inject capital into the subsidiaries, which would be expensive.

In such circumstances it would be logical to move the holding company abroad, the paper quoted Gruebel as saying.

Gruebel is not the only banker to threaten a move.

Bankers and hedge funds in London often say they will move to Switzerland if UK regulation and taxation becomes too oppressive.

($1=1.009 Swiss Franc)

(Reporting by Jonathan Lynn; Editing by Mike Nesbit)

UBS threatens to move HQ from Switzerland: report

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