Business briefs

Wednesday, Jan. 26, 2000 | 12:26 p.m.

Some states balk at breakup

WASHINGTON -- Signaling a potential division within ranks that could complicate settlement talks and the next important phase of the Microsoft trial, some states active in the case believe the Justice Department's plan to break up one of the world's most successful companies may not be the best solution.

Although debate continues in secret among the 19 state attorneys general deciding what to recommend about Microsoft Corp., there is a risk the government might fail to bring a unified proposal on sanctions to U.S. District Judge Thomas Penfield Jackson.

The next round of courtroom arguments will be Feb. 22. Unless the case is settled, which appears unlikely, the judge will probably rule by April on which antitrust laws Microsoft violated.

Funding requirements may jump for banks

WASHINGTON -- The Federal Deposit Insurance Corp., concerned about its biggest losses from bank failures since the early 1990s, is proposing doubling the minimum required funding for banks that specialize in risky loans to people with inferior credit histories.

Regulators have warned that the higher-interest loans, called subprime loans, can increase the risk of defaults for the deposit insurance fund. They played a role in some of the eight U.S. bank failures last year. The eight failures and another one in late 1998 cost the FDIC about $1 billion last year -- its biggest annual hit since the regional banking crises of the early 1990s.

The failures, coming amid a booming economy, have worried regulators and lawmakers.