G-20’s finance ministers meet in face of instability

Top world finance ministers began the Group of 20 meeting in Paris on Friday amid fresh reminders of the instability gripping Europe’s economy: another credit downgrade for Spain, fear over the strength of European banks and a political battle over austerity measures in Italy.

French Finance Minister Francois Baroin said private investors will probably face greater-than-expected losses on their holdings of Greek bonds, beyond the roughly 21 percent included in the July rescue plan for Greece.

That program has collapsed amid a deepening recession in that country, and Baroin said on French radio that it is “more or less certain” that banks, pension funds and others will have to shoulder larger losses.

Baroin said the Greek plan and other details should be finished by the time European leaders meet next weekend in Brussels.

Officials including U.S. Treasury Secretary Timothy Geithner said European leaders were moving forward on Greece and other core issues.

That progress includes an effort to raise new capital for banks and a strategy for increasing the financial power of a $600 billion European rescue fund.

But Geithner told CNBC that the “hard part is still ahead” as officials try to nail down the details.

Four bank closures in U.S. boost total to 80 this year

Federal regulators Friday closed small banks in Georgia, North Carolina, New Jersey and Illinois, boosting to 80 the number of U.S. bank failures this year.

The number of closures has fallen sharply this year as banks have worked their way through the bad debt accumulated in the recession. By this time last year, regulators had shuttered 132 banks.

The Federal Deposit Insurance Corp. seized Piedmont Community Bank of Gray, Ga. It also shuttered Blue Ridge Savings Bank, based in Asheville, N.C.

Also closed was First State Bank in Cranford, N.J., and Country Bank in Aledo, Ill.

The failure of Piedmont Community Bank is expected to cost the deposit insurance fund $71.6 million.

That of Blue Ridge Savings Bank is expected to cost $38 million, First State Bank, $45.8 million, and Country Bank, $66.3 million.

British watchdog rejects drug to treat melanoma

An independent British medical watchdog says the first treatment proven to help people with the deadliest form of skin cancer is too expensive to be used by the U.K.’s health care system, a recommendation critics called a potential death sentence.

The drug, Bristol-Myers Squibb’s Yervoy, has offered some hope to people with advanced skin cancers, though a study of patients with advanced, inoperable melanoma showed it extended survival only four months on average.

The National Institute for Clinical Excellence advised Friday that at a cost of $126,600, Yervoy “could not be considered a cost-effective use” of health funds. A final decision is expected next month after a public consultation.

In the U.K., most medicines are paid for by the government, as long as they’re recommended by the cost-efficiency watchdog. The agency commonly rejects expensive drugs, recently advising against new treatments for prostate cancer, breast cancer and multiple sclerosis, though patients and doctors are increasingly protesting the decisions.

The government usually adopts NICE’s recommendations, meaning doctors in the government-funded health service cannot prescribe Yervoy without NICE’s approval.

Favorable economic news propels crude oil to $86.80

A series of encouraging economic reports sparked oil prices Friday, pushing the benchmark to the highest level in nearly a month.

Investors shrugged off declining oil demand forecasts that came out earlier this week and focused instead on growing U.S. consumer spending, a rise in bank lending in China and a meeting of world financial leaders to discuss Europe’s debt crisis.

“You’re seeing one big sigh of relief” across world financial markets, independent analyst Jim Ritterbusch said. “Three weeks ago, it looked like we were definitely headed for a recession.”

Benchmark crude rose $2.57, or 3.1 percent, to end at $86.80 per barrel in New York. That’s the highest level since Sept. 20.

Brent crude, which is used to price oil from foreign countries, rose $3.57, or 3.2 percent, to finish at $114.68 in London.
 

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