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Federal Judge S. Arthur Spiegel this morning sentenced the last of 11 Berkeley Premium Neutraceutical executives who either pleaded guilty or were convicted for their part in a multi-million fraud scheme.

Paul Kellogg, 41, of West Chester, was Berkeley’s in-house counsel. He received a prison sentence of one year and one day for his February conviction on six conspiracy counts.

Investigators from four federal agencies and the U.S. Attorneys office spent years pursuing the case, alleging Berkeley made millions of dollars over five years by sending customers dietary supplements they didn’t order, charging credit cards without authorization, misrepresenting their business activities to clients and lenders and laundering money.

Berkeley owner Steven Warshak received the most severe punishment, including 25 years in prison and a $93,000 fine no qualifying payday advance paydayloans. His mother, Harriet Warshak, drew a 24-month sentence. The Warshaks and their company were ordered to forfeit more than $500 million to the government.

Other Berkeley executives received sentences of 12 to 13 months. Among those sentenced this week were Greg and Susan Cossman of Maineville, Shelly Kinmon of Union, Ky.; James Teegarden of Florence, Ky.; and Steven Pugh of West Chester. Former Berkeley accountant William Bertemes drew the lightest sentence – one month in prison and a $10,000 fine. Bertemes pleaded guilty to one count of obstruction of justice in May, 2006.

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Bank of Japan Governor Masaaki Shirakawa, after four months on the job, is making one of the world's most opaque major central banks more transparent.

When policy makers kept the benchmark rate at 0.5 percent yesterday, they listed the reasons for the decision. Until July, they said nothing when they held rates steady. The bank is increasing the number of forecasts it publishes, and instead of just signaling the direction of borrowing costs during his press conferences, Shirakawa tries to explain his thinking about the economy.

The changes by the University of Chicago-educated Shirakawa, 58, bring the Bank of Japan into line with moves worldwide to help outsiders better understand how decisions are reached. Clear communication helps to anchor inflationary expectations and makes it easier for investors to predict rate changes, said Nariman Behravesh, chief economist at Global Insight Inc. in Lexington, Massachusetts.

“There is a sense of mystery about what the BOJ does, more so than with other central banks, so this is Japan's attempt to follow'' its counterparts, said Behravesh.

Shirakawa is tackling tradition even though he came to the job by default in April. Prime Minister Yasuo Fukuda's first and second picks were rejected by the opposition parties that control Japan's upper house of parliament. That left Shirakawa, who became deputy governor only weeks earlier.

Building on Fukui

Japan's central bank has been independent from the government for only 10 years, and Shirakawa's predecessor, Toshihiko Fukui, 72, made some moves toward transparency. In July 2005 the bank started publishing the number of votes for and against a move at the time it announced a decision. In February 2007, it began to identify, on the day of the decision, how each member voted.

Shirakawa has already established a style that some economists welcome for its clarity.

He “provides detailed explanations and solid logic, though his language is more boring than Fukui's,'' said Mari Iwashita, chief market economist at Daiwa Securities SMBC in Tokyo. “He also tries to avoid comments'' that may mislead markets, she said.

Iwashita cites the June 13 press conference as an example. Asked about the risks of rising commodity prices on inflation, Shirakawa said the bank was more focused on their effect on growth.

His answer damped speculation that he might raise borrowing costs after a report two days earlier showed producer prices climbed at the fastest pace in 27 years.

Treading Carefully

“Shirakawa carefully avoided commenting on inflation risks and instead underlined that Japan's economic situation is different from those of the U.S. and Europe,'' Iwashita said. “If it had been Fukui, he would have made more hawkish remarks.''

Benchmark 10-year bond yields retreated after he spoke, falling to 1.74 percent in the following week from 1.88 percent before the briefing pay day loans fast cash online.

The steps toward more openness follow greater disclosure at other central banks. In May 2007, Sweden's Riksbank started holding press conferences after all meetings. In November, Ben S. Bernanke increased the number of forecasts the Federal Reserve issues each year to four from two.

Giving Up Secrecy

“At last, major central banks have given up secrecy,'' said Allan Meltzer, a Carnegie Mellon University professor who was an honorary adviser to the BOJ between 1986 and 2002.

For all the efforts at transparency, Shirakawa said he doesn't plan to flag rate decisions, in contrast with ECB President Jean-Claude Trichet, who has used the phrase “strong vigilance'' to indicate increases.

“De facto announcement of the future level of the policy interest rate means disregarding the changes in economic conditions after such an announcement,'' the governor said in a July 18 speech.

Central banks' efforts to be more open have sometimes backfired.

In April 2006, Bernanke said the Fed might suspend rate increases even if risks between inflation and growth weren't “entirely balanced.'' Some people said this meant he was less worried about inflation, only to find in August that the Fed still identified prices as its chief concern.

Nakagawa Request

An increase in transparency may help to insulate the BOJ from political interference. Three days before the policy board met in January 2007, Hidenao Nakagawa, then the ruling Liberal Democratic Party's secretary general, said the government might ask the bank to postpone a rate increase in comments interpreted at the time as an attempt to meddle in the board's decision.

At the meeting, the bank held the benchmark rate at 0.25 percent, waiting until the following month to double it.

“With a clearer picture of the BOJ's intentions, investors can be more confident about their own forecasts, which makes it harder for politicians' comments to sway markets,'' said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management in Tokyo.

Of 26 economists surveyed by Bloomberg News this month, 21 said there will be no increase in borrowing costs by June 2009, four projected higher rates and one forecast a cut.

“Shirakawa's true test will be whether he can properly manage investors' expectations when the bank starts to prepare for a rate-policy change,'' said Seiji Adachi, a senior economist at Deutsche Securities in Tokyo. “That we have yet to see.''

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German producer-price inflation accelerated to the fastest pace since October 1981 last month, bolstering the European Central Bank's case to keep interest rates at a seven-year high even as the economy cools.

Prices for goods from newsprint to plastics increased 8.9 percent from a year earlier after rising 6.7 percent in June, the Federal Statistics Office in Wiesbaden said today. Economists expected a 7.5 percent gain, the median of 30 estimates in a Bloomberg News survey shows. In the month, prices rose 2 percent.

Higher energy prices make production more expensive, putting companies under pressure to pass on rising costs to customers. Even though the price of oil has retreated 21 percent from a July 11 record, the ECB kept its benchmark rate at 4.25 percent this month, saying it is worried that past commodity-price increases will push up wage demands and lead to entrenched inflation.

“This should be the peak in producer-price inflation, but it's too early for the ECB to sound the all clear,'' said Nick Matthews, an economist at Barclays Capital in London. “The bank is still concerned about the pass-through of previous price increases and will stay on hold for the foreseeable future.''

Oil has risen more than 60 percent over the past year and reached a record of $147.27 a barrel on July 11. Inflation in Germany accelerated to 3.5 percent in July, the fastest pace in 12 years, and consumer prices in Europe gained an annual 4 percent, the most since 1992.

Energy Jump

German energy prices gained 25 percent from a year earlier and prices for electricity increased 23 percent, today's report showed. The cost of diesel fuel rose 30 percent from July 2007 payday advance $500 payday loan. Excluding energy, producer prices rose 3.6 percent in the year.

BASF SE, the world's biggest chemical producer, on July 31 reported profit that beat analyst estimates for a sixth straight quarter after passing on higher costs. The company has raised prices by as much as 20 percent.

ECB President Jean-Claude Trichet said on Aug. 3 that “a pipeline effect'' from commodity-price increases “is something which is ongoing and undoubtedly creates more risks.'' There is an “absolute necessity to avoid the materialization of such risks.''

Rising prices are leading to higher wage demands and the pushing up the outlook for prices. Inflation expectations, as measured by the so-called breakeven on 5-year French indexed bonds, were at 2.2 percent yesterday, up from 2.1 percent in March. They fell from a record 2.83 percent after the ECB raised rates on July 3.

Higher prices are eroding purchasing power and curbing growth in an economy already burdened by a stronger euro and the U.S. slowdown. Germany, which accounts for about one third of the euro- area economy, contracted 0.5 percent in the second quarter, while gross domestic product in the 15 euro nations fell 0.2 percent.

The Bundesbank said yesterday economic activity may remain muted for “some time yet,'' with the economy likely to experience a “dry spell'' in the second half of the year. Still, it said it doesn't expect a further deterioration in growth and noted that inflation expectations remain above the ECB's 2 percent price- stability limit.

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Digital music seller Rhapsody is launching a $50 million marketing assault on Apple’s iTunes, offering songs online and via partners including Yahoo Inc and Verizon Wireless, Rhapsody said on Monday.

The songs will be sold in MP3 format, which means users of the Rhapsody service will be able to play them on iPods.

Before now Rhapsody, jointly owned by Real Networks Inc and Viacom Inc’s MTV Networks, had focused on a subscription service, allowing unlimited song streaming for $13 to $15 a month, rather than selling downloads.

But Rhapsody Vice President Neil Smith said the fact the service has not been compatible with Apple Inc’s top-selling iPod digital player has limited Rhapsody’s reach.

“We’re no longer competing with the iPod,” Smith said. “We’re embracing it.”

Rhapsody also will be the music store back-end to MTV’s music Web sites and iLike, one of the most widely used music applications on social networking site Facebook.

Rhapsody will be available on mobile phones via the Verizon Wireless VCAST Music service quick payday payday advance low fees. Buyers of a song over-the-air directly from phones also will be able to download that song to their computer. Verizon Wireless is a joint venture of Verizon Communications Inc and Vodafone Group Plc.

Rhapsody executives describe the strategy as “Music Without Limits.” They said it would be backed by a marketing blitz worth up to $50 million in media space over the next year in part by leveraging co-parent MTV’s TV networks and Web sites. 

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The Louisville Regional Airport Authority on Wednesday approved a $96.6 million operating budget for fiscal 2009.

The budget, which goes into effect July 1, presumes that 1.9 million people will board planes at Louisville International Airport next year. That figure would be down from the anticipated 2 million expected in the current fiscal year, which ends June 30, airport authority executive director Skip Miller told the authority's board.

The budget provides for continuation of one noise-abatement program — the Minor Lane Heights relocation program, which began in 1988 — and the start of another one, the soundproofing of between 350 and 1,100 homes to the north of the airport that are affected by air traffic noise.

Taking a conservative approach

In his budget address to the board, Miller said the airport authority needs to continue to be conservative in its spending as airlines face unprecedented fuel costs and capacity contractions.

Miller said the International Air Transport Association, which in March predicted the industry would turn a combined profit of $4.5 billion in 2008, said this month that it expects the industry to suffer a combined loss of $2.3 billion for the year.

In the meantime, Miller said, the budget allows for an increase in marketing and air service development dollars to more aggressively recruit new air service and passengers.

"This is not the time to retrench," Miller told the board.

He added that Louisville International continues to fare well against regional competitors such as Lexington, Cincinnati, Nashville and Evansville, all of which experienced year-to-date decreases in passenger growth through April.

Louisville International's passenger growth was up 6.3 percent during the same period, Miller said.

Other highlights of the fiscal 2009 budget are:

• Funding capital projects at Louisville International and Bowman Field without incurring additional debt;
• Continued construction of Taxiway A and the relocation of the FedEx apron at Louisville International;
• Completion of an emergency operations center at Louisville International;
• Continuation of airport vehicle fleet modernization and purchase of new fire-fighting equipment for Louisville International;
• Repair of T-hangar roofs at Bowman Field.

About 64 percent of the budget will come from operating revenue generated at Louisville International. Another 26 percent will come from Federal Aviation Administration grants faxless payday advance pay day advance. Charges to passengers assessed on airline tickets will account for 5.8 percent, and 2.5 percent will come from interest income. The remaining 1.6 percent will come from the operation of Bowman Field.

The largest chunk of expenses — 35.3 percent — will come from debt service. Capital improvements and major maintenance at Louisville International will account for 32.3 percent of expenditures, and 25.9 percent will come from the operation of Louisville International.

The authority plans to put 2.8 percent of the $96.9 million budget into reserves. It will spend 2.1 percent on capital improvements and major maintenance at Bowman Field, and 1.7 percent will be spent to operate that airport.

Board meeting becomes contentious

An increase in the rent charged for hangars at Bowman Field, approved as a part of the 2009 budget, caused turbulence before the meeting ever got off the ground.

The budget included an approximately $40 per month increase in Bowman Field hangar rents, an increase that board members contend is necessary to fund replacement of the aging hangars at the general aviation airport.

The increase will raise rates to $300 from $260 per month for a standard hangar. Rates for oversized hangars will range from $382 to $555 per month.

The rate increase takes effect Feb. 1. It drew the ire of about 25 Bowman tenants who packed the authority's board room, hoping for a chance to voice their opinion.

Prior to the meeting, when board member Norm Risen learned that Bowman tenant representatives had only five minutes to plead their case to the board, he gave a passionate speech about his objection to the rate increase.

Risen told the board that the 24 percent increase in hangar rates was "criminal," considering the state of the hangars in question.

He also took Louisville Metro Mayor Jerry Abramson to task for not attending the board meeting, as he said Abramson had told him he would.

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Wall Street investment firms shouldn't become dependent on the Federal Reserve's emergency loans as a permanent source of funding, Assistant U.S. Treasury Secretary Anthony Ryan said.

“When they put these lending facilities in place back in March, they said they were going to be temporary,'' Ryan said today in a Bloomberg Television interview in London. “We don't want to encourage the dependence upon the Federal Reserve as a backstop.'' He added later in a speech that financial institutions should be “allowed to fail.''

The Treasury, Fed and other agencies are discussing ways to overhaul regulation of the U.S. financial system to improve risk management and disclosure. Ryan said it is up to the Fed to decide when to change the availability of the credit lending facility made available three months ago to the primary dealers of government bonds.

“What we really want to do is to strengthen market discipline and ensure that our financial institutions remain well capitalized,'' he said.

U.S. regulators are working out how to let investment banks retain access to the so-called Primary Dealer Credit Facility once the program is shut down in September, a government official said last week on condition of anonymity. The Treasury and the Securities and Exchange Commission are seeking to ensure the emergency measures are temporary.

Bear Stearns Rescue

The Fed introduced the facility March 16, the same day it agreed to lend against $30 billion of collateral from Bear Stearns Cos. to secure its takeover by JPMorgan Chase & Co. Firms can borrow at the same rate as commercial banks, which are already subject to capital rules and direct Fed oversight.

Fed officials have examiners inside investment banks to help assess the credit risk they are taking on loans. The SEC and the Fed are working on a memorandum of understanding that should formalize agreements on information sharing.

Regulators are seeking to alleviate the impact from the collapse of the subprime mortgage market and prevent a recurrence of a disruption that has led to global writedowns of $400 billion bad credit payday loans no fax payday loans. Ryan said that while “we've made a lot of progress,'' improvement wouldn't come “in a straight line.''

In a speech after the interview, Ryan said that as regulators seek to improve market discipline, they must also allow for the possibility that some institutions will go bankrupt.

`Allowed to Fail'

“As we resolve the challenges of today, federal regulators must balance the need for market stability with concerns about the likelihood of increased moral hazard,'' he said to Euromoney's Global Borrowers Investors Forum, according to a text. “While firm failures are painful, as a policy matter, we must be in a place where firms are allowed to fail.''

The Treasury official said a breakdown in risk management from financial firms, credit agencies and investors all contributed to the turmoil that is now easing.

“As the fog enveloping our markets continues to dissipate, we must all recognize that the erosion of market discipline contributed greatly to the challenges we are addressing today,'' he said. “These breakdowns in the system will continue to occupy policy makers and market participants for years to come.''

There must be changes in credit-rating companies' practices, as well as in the way corporations use those ratings, he said

“The users of their services must rely less on, and appreciate more, the limitations of ratings products,'' he said.

Ryan, a former portfolio manager who took his current post in December 2006, declined to comment in the interview on whether he is a candidate to replace departing Fed Governor Frederic Mishkin.

Two officials familiar with the matter said last month the White House is considering nominating Ryan.

“Replacements to the Federal Reserve Board are up to the president and the Federal Reserve,'' he said. “I'm very busy with my responsibilities.''

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Bank of England policy makers defeated David Blanchflower's call for an interest-rate cut this month as the threat of inflation intensified, prompting some of them to consider an increase.

The Monetary Policy Committee, led by Governor Mervyn King, voted 8-1 to keep the benchmark rate at 5 percent, minutes of the June 5 decision showed. Blanchflower voted for a quarter-point reduction, arguing that there was a small, but growing risk of a “very negative outcome.''

Inflation reached 3.3 percent in May, prompting King to write a letter of explanation to the government this week for only the second time in more than a decade. He said policy makers are “concerned'' about increases in consumer prices, inflation may exceed 4 percent this year, and the future path of interest rates is “uncertain.''

“Most members concluded that developments this month had meant that the risks to inflation in the medium term had moved further to the upside,'' the minutes said. “For some members the news had been sufficient to consider whether an immediate rise in bank rate was warranted.''

At 5 percent, the Bank of England's benchmark rate is still the highest rate in the Group of Seven industrialized nations. The U.K. central bank last lowered the main rate in April, bringing the total number of rate cuts to three since December.

The pound stayed lower against the dollar and the euro after the report. The U.K. currency traded at $1.9522 at 10:22 a.m. in London, from $1.9568 yesterday. It was at 79.37 pence per euro.

`On Hold'

“There's a sense that rates are more likely to be on hold over coming months than anything else,'' said Matthew Sharratt, an economist at Bank of America Corp. in London. “If the Bank of England is forced to move before the end of the year, that move is going to be a hike.''

The policy makers who considered a rate increase decided against one, because it wasn't required “urgently'' to keep inflation expectations in check and may appear to exaggerate the panel's concerns about prices cash advance loan no fax instant payday loan.

Britons anticipate inflation will reach 4.3 percent in the next year, the highest reading since at least 1999, the central bank said last week, citing a May survey by GfK NOP.

Crude oil prices surged to a record above $139 a barrel On June 16 and corn climbed to a record near $8 a bushel. Higher commodity prices pose a “serious challenge'' to the world economy, officials from the Group of Eight nations said June 15. U.K. food prices increased 8.7 percent from a year earlier, the statistics office said yesterday.

Governor's Letter

King wrote his letter to Chancellor of the Exchequer Alistair Darling because inflation strayed above 3 percent to the highest since at least 1997. It is only the second a governor has written since the central bank took control of monetary policy 11 years ago. The bank published the letter yesterday.

British law requires the central bank governor to write a letter of explanation if inflation strays more than 1 percentage point from the 2 percent target. King wrote the first letter in April 2007 after inflation quickened to 3.1 percent.

Falling house prices and higher credit costs are curbing consumer spending, and denting Britons' confidence in the economy. King said it's “quite possible we will get an odd quarter or two of negative growth'' as he presented the bank's forecasts last month.

Blanchflower argued that evidence of slowing growth “more than outweighed'' the news about short-term inflation. He repeated his call for an interest-rate cut, saying that the impact of declining house prices on consumer spending was likely to be more than the bank predicted.

“There's a very real risk that the U.K. economy could fall into a recession, and that would paralyze the financial markets in the middle of a G-7 credit crunch that is not going away,'' Lena Komileva, an economist at Tullett Prebon in London, said in an interview on Bloomberg Television.

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China's inflation rate slowed more than economists estimated to 7.7 percent in May from close to a 12-year high in April, according to two government officials.

Consumer prices rose less than the 8 percent median estimate in a Bloomberg News survey of 19 economists. The officials, who said they saw statistics bureau data, wouldn't be identified ahead of the official release on June 12.

Inflation slowed after food-price gains eased, the government ordered banks to set aside more money to cool lending growth and the yuan gained 5.2 cent percent versus the dollar this year. Soaring commodity prices may keep inflation above the central bank's 4.8 percent target for 2008.

“It is much, much too soon to break open the champagne,'' said Stephen Green, head of China research at Standard Chartered Bank Plc in Shanghai. “There are lots of other inflationary pressure points in the economy such as rising prices of fuel and raw materials.''

Market News International reported the 7.7 percent figure earlier today, citing unidentified sources. The rate was 8.5 percent in April.

The yuan traded at 6.9243 per dollar as of 4:07 p.m. in Shanghai, close to the highest since a peg was scrapped in 2005. It gained 7 percent last year, helping to reduce the cost of imports.

Bucking Inflation Trend

Central banks around the world are grappling with higher prices and slower growth. Federal Reserve Chairman Ben S. Bernanke said yesterday that policy makers in the U.S. will “strongly resist'' any surge in inflation expectations.

China may be “bucking the trend'' of rising inflation in Asia because the central bank tightened monetary policy earlier than its peers, restricting bank lending last year, said Liang Hong, an economist with Goldman Sachs Group Inc. in Hong Kong.

India's wholesale prices, that nation's main inflation measure, rose 8.24 percent in the week through May 24, the fastest pace since 2004. Vietnam is battling inflation of more than 25 percent.

The People's Bank of China has kept ratcheting lending curbs tighter and said June 7 that it would push banks' reserve requirements to a record 17.5 percent, the fifth increase this year payday loan paydayloans.

China's key CSI 300 Index of stocks fell 8.1 percent today, the most since February 2007, on concern that the extra lending curbs will dent company earnings. The market wasn't open yesterday because of a holiday.

`Tough' Task

Rising energy, labor and grain prices will make it “tough'' to control inflation, the central bank said in a report published on June 3.

Producer-price inflation, which shows price pressures in industry and often presages higher consumer inflation, may rise to 8.3 percent in May, the highest in almost four years, according to a Bloomberg News survey of economists. That figure is due tomorrow.

Reconstruction work after the May 12 earthquake that devastated parts of Sichuan province will increase demand for cement, steel, copper, aluminum and other materials, the central bank said.

This year's surge in inflation has largely been driven by food, which makes up about one-third of the consumer-price index. Vegetable and pork supplies are recovering from blizzards and a hog disease outbreak, according to Paul Cavey, an economist at Macquarie Securities Ltd. in Hong Kong.

Retail Food Prices

Retail food prices rose 14 percent in the four weeks to May 25 from a year earlier, down from an 18 percent gain in April, according to the Ministry of Commerce.

China's economic growth slowed to 10.6 percent in the first quarter from 11.9 percent for the whole of last year. Year-on- year export gains probably cooled for a third month in May, according to a Bloomberg News survey of economists.

The central bank hasn't raised interest rates this year after six increases in 2007 on concern that increases would attract speculative capital from abroad to an economy already flooded with cash from foreign direct investment and trade.

China's benchmark one-year lending rate is 7.47 percent, and the equivalent for deposits is 4.14 percent.

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Federal officials unsealed two indictments Thursday charging Broadcom co-founder Henry T. Nicholas III with conspiracy and securities fraud relating to stock options backdating, as well as numerous drug charges.

The indictments allege a total of 25 counts against Nicholas, including conspiracy, securities fraud, false certification of financial reports, filing false statements with the U.S. Securities and Exchange Commission, wire fraud and conspiracy to distribute and acquire controlled substances.

The indictment regarding stock options also names Broadcom’s former chief financial officer, William J. Ruehle, who faces charges including conspiracy and securities fraud. He is not charged with drug violations.

Last month, securities regulators charged Nicholas and Henry Samueli, who co-founded the chip maker with Nicholas, in a civil suit with falsifying the company’s reported income, leading to what is believed to be the largest accounting restatement yet because of backdating stock options.

Nicholas spokesman Mark Saylor referred calls to another spokesman, who said lawyers for Nicholas had no comment.

Nicholas, 48, served as CEO and president since Broadcom’s (BRCM) inception until he resigned in 2003 payday loan online online cash advance. Last month, his attorney Bill Hake said Nicholas had entered an alcohol rehabilitation program.

Ruehle, 65, joined the company in 1997 as vice president and chief financial officer and retired in 2006.

Samueli stepped down as chairman of the company’s board of directors and planned to take a leave of absence as chief technology officer, according to a May statement from the Irvine, Calif., company.

The SEC’s civil complaint also charges former chief financial officer William J. Ruehle and general counsel David Dull.

The SEC said that as a result of the scheme to backdate options without properly accounting for the move, Broadcom had to restate its financial results in January 2007 and report more than $2 billion in compensation expenses it hadn’t accounted for.

In April, an attorney for Nicholas said he had entered an alcohol rehabilitation program. 

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U.S. Treasury Secretary Henry Paulson reiterated support for a strong dollar and said changes in today's statement by Group of Seven policy makers about currencies reflects recent market movements.

“I reiterated in very strong terms our commitment to a strong dollar,'' Paulson said at a press conference after G-7 talks in Washington.

Finance ministers and central bankers signaled concern over the slump in the dollar, citing “sharp fluctuations in major currencies.'' The U.S. currency has fallen about 8 percent against the euro and 6 percent versus the yen since the last G-7 meeting in Tokyo on Feb. 9, and reached a record low of $1.5913 per euro this week.

“All I'm going to say is that if you never changed the communiqué language no matter what happened around the world, it would be pretty meaningless,'' Paulson said. “This communiqué reflects market developments and changes in the markets.''

Policy makers from the U.S., U.K., France, Canada, Italy, Germany and Japan made the first significant change to their language on currencies since February 2004 in Boca Raton, Florida.

“Since our last meeting, there have been at times sharp fluctuations in major currencies, and we are concerned about their possible implications for economic and financial stability,'' the communiqué said. “We continue to monitor exchange markets closely, and cooperate as appropriate.''

$245 Billion in Losses

The officials met to address a credit crisis sparked by losses on U.S. mortgage securities that have caused financial institutions to write down $245 billion in assets. The International Monetary Fund said two days ago that there is a 25 percent chance of a global contraction.

Paulson said he explained to his colleagues the housing downturn in the U.S. that has sent foreclosures soaring and made credit harder to get for consumers and companies alike, noting that the economy has “sharply slowed down and the risks are to the downside.''

Concern that the impact from the U.S. economic slowdown would spread to the rest of the world was shared by his counterparts, he said. “There isn't anyone in that room that believes in decoupling,'' he said cashadvance payday advance.

He reiterated that he hasn't seen any plan in Congress that calls for the use of public funds to alleviate the housing crisis that wouldn't do “more harm than good.'' Congressional proposals to use government money aren't “gaining traction,'' he said.

Market Oversight

In a statement issued after the talks, Paulson said the policy makers agreed to cooperate to address the financial market turmoil that threatens to slow growth worldwide.

“We have worked, and will continue to work, closely to address global challenges and take concrete actions,'' he said. “Most of our discussion focused on the ongoing challenges in the global economy and the international financial system, and the policy responses to these challenges.''

The ministers' joint statement after the meetings said the global economic slowdown may worsen amid an “entrenched'' credit squeeze.

Paulson said he “welcomed'' the report by the Financial Stability Forum, chaired by Bank of Italy Governor Mario Draghi, that urged regulators to strengthen accounting rules, tighten bank oversight and require more corporate disclosure.

The FSF also said central banks should consider taking collateral in currencies other than their own to boost liquidity in times of crisis.

`Rapid' Implementation

“We discussed the importance of rapid and effective implementation of the FSF findings,'' Paulson said.

The Treasury chief said the ministers discussed efforts by the International Monetary Fund to streamline its operations and cut expenses while improving its monitoring of financial markets.

“I underscored the need for firm implementation of the IMF's new framework for exchange rate surveillance,'' he said.

Paulson reiterated that the financial market turmoil, the fall in housing prices and rising energy costs, were weighing on the U.S. economy.

“I have the greatest confidence in the resiliency, flexibility and strength of our economy and our capital markets,'' he said.

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