The Financial Crisis Inquiry

Barack Obama proposed a new levy on large banks and financial companies to recoup

Barack Obama proposed a new levy on large banks and financial companies to recoup the cost of the Troubled Asset Relief Programme. The fee will be structured to take account of abank's liabilities and will hit investment banks with few deposits harder than retail banks with larger such holdings. Some in Congress are mooting separate and more punitive measures for banks.

The Financial Crisis Inquiry Commission in Washington held its first hearing, at whi ch the bosses of Bank of America, Goldman Sachs,JPMorgan Chase and Morgan Stanley provided testimony. The commission's ten members were appointed by Congress to investigate the causes of the crisis and publish recommendations by December. The bosses were quizzed about Wall Street's pay structure, which they broadly defended. Bank bonuses will figure prominently in the quarterly earnings season.

Societe Generale spooked investors by issuing a profit warning for the fourth quarter because it had to write down a further €1.4 billion ($2 billion) in assets related to American property debt. The French bank still expects to make a small profit.

The People's Bank of China increased the share of deposits that banks must set aside as reserves by half a percentage point. This decision, which came earlier than had been expected, is an initial, small step towards tightening monetary policy after a large government stimulus package.

China's exports in December rose by 17.7% compared with December 2008, the first monthly increase for more than a year. Imports grew by 56%. German data, which estimate that Germany's economy shrank by 5% last year, suggest that China has passed Germany to become the world's biggest exporter.

America's trade deficit jumped by almost 10% in November compared with the previous month, mostly because of the higher price of oil imports. But its trade deficit with China narrowed slightly as American exports to that country rose to a record $7.3 billion.