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Renovation work that could turn a century-old former Buffalo hotel into a market-rate apartment building is expected to start this spring.

The $1.8 million project, which is being shepherded by Kissling Interests, will see the conversion of the former Lake Hotel at 201 Huron St. renovated into eight apartments. The project cleared one of its final hurdles Monday morning when the Erie County Industrial Development Agency's directors unanimously approved a tax-abatement package. The hotel conversion qualifies under the IDA's adaptive re-use policy and could save Kissling $80,600 in sales and mortgage-recording taxes.

"This is a great example of an adaptive re-use project," said Buffalo Common Council President David Franczyk, an ECIDA director. "It's a building with a lot of character."

Constructed in 1896, the three-story, 11,000-square-foot building has alternated as an apartment building and a hotel. As a hotel, it was known as the Darrow Hotel, the Delmar Hotel and the Lake Hotel.

Located deep in Buffalo's West Side, the project is the latest in a series of new developments to take hold in one of the poorest sections of the city. Recently, Ellicott Development Co. opened a Family Dollar store further up Niagara Street.

Kissling paid $40,000 for the building, when it acquired it one year ago.

"Personally, I'm glad to see some interest there," Franczyk said. "Give Kissling credit for taking a chance on the neighborhood."

The renovation is being designed by Carmina Wood & Morris Architects.

The first tenants are expected to move in later this year or by early 2011.

The project is one of several historic and adaptive re-use efforts underway locally by Kissling Interests. The former National Casket Co. building on Virginia Street is in the process of being renovated into 10 live-work loft-style residences. Kissling is also restoring a century-old former Remington Rand warehouse in North Tonawanda into a mixed-use building, anchored by loft-style apartments.

Besides the Kissing Interests abatement package, the IDA directors also:

• Approved an abatement package for OMFS Properties LLC to build an oral and maxillofacial surgery center on Young Street in Tonawanda that will focus on providing service to low-income families and children.

The 3,200-square-foot center, to be run by Northtowns Oral and Maxillofacial Surgery in conjunction with the University at Buffalo's School of Dental Medicine, carries a $2.3 million price tag.

The center will create 10 jobs and is expected to see 800 patients annually, with one-quarter coming from outside the region.

OMFS Properties will receive $726,250 in a tax-abatement package.

• The agency will receive a $100,000 state grant that is being allocated to Buffalo Southern Railroad for repairs to a county-owned rail line in Hamburg that services trains bringing in equipment, exhibits and animals for the annual Erie County Fair.

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I was born in 1938 in Germany, but I was very fortunate. My father was the managing director of a Swiss machinery company, and during the war I spent time in Switzerland.

After the war I became active in efforts to bring French and German youth together. In 1969, after two Ph.D.s and a year at Harvard’s Kennedy School, I started writing a book about American management.

I said that in order to achieve long-term growth and prosperity, management must serve all stakeholders. The idea of the first Davos symposium was to create a platform that would allow stakeholders to exchange concerns and knowledge.

How I got started

Bet big. [In order to fund Davos] in 1970 I took a 50,000 Swiss franc ($11,434) loan from a German industrialist. The condition was either to pay him back or join his company, so I was nervous.

We sent out invitations with response cards. Every morning the mail came, and I didn’t want to spend time opening it so I put it under a very strong desk lamp where I could immediately see the response. Some 440 people came from 31 countries to the first meeting in 1971, including John Kenneth Galbraith.

The success of the conference let me repay the debt and gave me a surplus, which I used to create the European Management Forum (now the WEF) as a not-for-profit foundation.

Expand your vision but control the brand. In the beginning [Davos] was a two-week course focused on Europe and management. In the 1970s the oil crisis triggered a more global approach. There are now 2,500 participants.

Some years ago we invited Hollywood celebrities who were involved in the issues we were addressing, believing that they might contribute. The media focused on them. This provided the wrong impression. We have not invited them since; we are afraid the brand would be hijacked.

Secrets of my success

Break the rules. I wanted to spend only one year studying business, so I went to Harvard’s Kennedy School and cross-registered for courses in the business school.

One day I was invited by dean George Baker to have tea; he wanted to meet the person who circumvented the rules. We developed a close relationship, and I invited him to be the chairman of the first Davos meeting. This helped guarantee its success

Maintain exclusivity. We have a strict philosophy: If someone retires, he is no longer invited. We want to make sure everyone who comes is really an active decision-maker.

Keep it simple. You can manage today’s complex world best by keeping your life as simple as possible. I do sports every day and have been happily married for nearly 40 years. People feel I’m the biggest networker, but I don’t go unnecessarily to parties. If I have to, I go for five to 10 minutes to show respect.

Klaus Schwab’s guide to Davos

Schedule your days, but leave time for chance meetings. They’re the most interesting. Don’t miss the opening session, for overall context. And if you go to only one party, go to the one on the last night co-hosted by the Forum and a government. This is the one party I always attend; this year it’s with South Africa, in its international kickoff to the 2010 World Cup. 

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AXA Asia Pacific rejected a $10.3 billion bid from parent AXA SA and Australian rival AMP Ltd on Monday, an initial hurdle for the French insurer’s bold ambitions to expand in Asia.

AXA SA, Europe’s second-largest insurer it would raise $3 billion to buy out its Asian assets in a two-stage deal which would see AXA Asia Pacific sold to AMP, then divided on geographical lines with the Australian firm keeping the Australia and New Zealand assets and selling the Asian assets back to AXA SA.

But AXA Asia Pacific’s independent directors rejected the main plank of the deal saying the deal “significantly undervalued” the company.

AXA SA had tried to buy out the minorities in AXA Asia Pacific five years ago but was knocked back.

“They’ve obviously wanted to have at least some of the assets of AXA Asia Pacific for some time. They wanted to do it cheaply before and they’re probably wanting to do it cheaply again,” said Ross Barker, managing director of Australian Foundation Investment Co.

AXA Asia Pacific shares jumped 30 percent on news of the takeover bid, with the market punting on AMP and AXA improving the offer.

AXA SA holds its Asian operations through its stake in Australia-based AXA Asia Pacific Holdings but now wants to own these assets outright, doubling its exposure to Asian life insurance savings, including in China and India.

“The proposal has been received against the backdrop of recent weakness in global financial markets and before the growth of our Asian operations is fully reflected in our profitability,” AXA Asia Pacific Chairman Rick Allert said in a statement.

With the buyout, AMP would buy all of the shares in the Asia Pacific unit, including the parent’s 53 percent stake in a deal worth $10.3 billion, and then sell AXA Asia Pacific’s Asian assets back to the French parent.

“The Asian assets are attractive,” said Mark Daniels, head of Australian equities for Aberdeen Asset Management.

“That’s one of the reasons why you’d hold AXA (Asia Pacific). They’ve got a very good business in Hong Kong and other Asian businesses are coming on track,” Daniels added.

In a separate development, AXA’s 15.6 percent stake in China’s No.4 life insurer, Taikang, attracted foreign and domestic bidders, including Temasek and Blackstone, valuing the holding at more than $1 billion, sources told Reuters.

“A BIT LIGHT”

AMP’s cash-and-shares offer for all of AXA Asia Pacific, the first stage of the deal, implied a bid of A$5.43 per AXA Asia Pacific share, valuing the target firm at A$11.2 billion ($10.3 billion), based on AMP’s closing share price on Friday. AMP is offering a 26 percent premium to AXA’s close on Friday.

AXA’s shares surged 33 percent to close at A$5.70, their highest since the collapse of Lehman Brothers. 

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There’s no easy way to deal with the question of institutions whose failure might pose a threat to the financial system, said Oliver Williamson, co-winner of this year’s Nobel Economics Prize.

“There is no silver bullet,” Williamson, 77, said at a news conference yesterday at the University of California at Berkeley, where he is professor emeritus. “There is no instant answer that I or any of my students or any of my colleagues would be prepared to advance on that.”

Williamson is a founder of organizational economics — the study of how institutions are created and developed and how they affect growth. In research that may have applications to the financial crisis, he suggested that it is better to regulate large companies than to try to break them up or limit their size.

The administration of President Barack Obama has proposed giving the Federal Reserve responsibility for overseeing financial institutions deemed “too big to fail.”

Williamson shared this year’s Nobel prize with Elinor Ostrom, a political scientist at Indiana University in Bloomington and the first woman to receive the economics award no fax pay day loans.

“There’s a possibility we could foresee some of the hazards,” such as those in the current crisis, and “take advance action,” Williamson said. The Fed and Treasury Department face “important organizational issues” similar to those raised by his work. Still, he said, he doesn’t think the crisis influenced the Nobel committee’s decision to award him the prize.

Williamson called himself “a lucky guy.”

In his academic work, Williamson found that large corporations exist primarily because they are efficient and benefit owners, workers, suppliers and customers, the Royal Swedish Academy of Sciences said today in Stockholm.

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Germany’s recovery from recession came in time to give a boost to Chancellor Angela Merkel’s re- election yesterday. It may not last much longer.

Unemployment is set to jump and consumer spending to fall in 2010 as government stimulus runs out, according to the Halle- based IWH institute, an adviser to the government. Companies are warning of a credit crunch, and debt at a post-World War II high leaves policy makers with few options to counter a double dip.

“The chancellor is not to be envied,” Ulrich Kater, chief economist at Dekabank in Frankfurt, said in an interview. “Having rescued the economy through large government aid programs will soon be forgotten and what’s left is cleaning up the mess.”

Exceptional measures of 85 billion euros ($124 billion) lifted spending and subsidized jobs, helping keep unemployment below levels in the U.S. and France, even as the economy suffered its worst post-World War II recession.

“We’re through the worst,” Laurenz Meyer, economic spokesman in parliament for the CDU, said in an interview. “But the second wave of this crisis has yet to hit us.”

Spurred by extra spending equal to 1.6 percent of gross domestic product in 2009, the economy grew 0.3 percent in the second quarter, confounding economists’ forecasts. It may expand another 0.8 percent in this quarter. Growth may reach 0.9 percent in 2010, the IWH institute says.

Germany, the world’s biggest exporter, was hammered by the global contraction as sales of Wolfsburg-based Volkswagen AG cars and Munich-based Siemens AG equipment slumped. The government has forecast a 2009 contraction of 6 percent.

Tax Cuts

Merkel’s Christian Democrats pledged across-the-board tax cuts worth about 15 billion euros and looser labor-market rules making it easier to fire employees. The Free Democrats, her likely coalition partners, want to go even further, creating just three tax brackets with the highest rate at 35 percent, down from the current ceiling of 45 percent.

Even with the 5 billion-euro “cash-for-clunkers” program, the world’s largest, which ended this month, there are no signs consumer spending overall has stabilized, the Kiel-based IfW economic institute said in a Sept. 9 report.

The unemployment rate will jump to 10.3 percent in 2010 from 8.1 percent this year, the IWH institute forecast on Sept. 15. Consumer spending will drop 0.7 percent in 2010 after growing 0.5 percent this year, it said.

Tighter Credit

Adding to the burden, the BGA association of wholesalers and exporters said Sept. 15 that 42 percent of its members expect credit to tighten. Small and mid-sized companies, which provide 70 percent of jobs, will face tougher loan conditions in the first half of 2010, Deputy Economy Minister Hartmut Schauerte said last month.

Faced with such gloom, Merkel will have few tools to deploy. Net new borrowing will almost double next year to 86.1 billion euros, according to the government budget.

“There’s quite a bit of bad news left to digest,” Elga Bartsch, chief European economist at Morgan Stanley in London, said in an interview. “The challenge for the next government is that its fortunes hinge on economic indicators that trail the business cycle.”

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British bank HSBC has made a bid of about 1 billion pounds ($1.63 billion) for Dutch financial group ING’s private banking businesses, according to a report in The Sunday Times.

The report said DBS, a Singaporean investment fund, and Julius Baer, the Swiss wealth manager, would also likely bid for the unit and that a preferred bidder would be named in the next 10 days.

ING, which has put its private banking operations in Switzerland and Asia up for sale to pay down bailout funds it received from the Dutch government, is also considering plans to split its insurance arm from its banking business, said the report fast cash without a hassle.

The Sunday Times said DBS was interested only in the Asian unit but that Julius Baer was keen on both assets.

Neither HSBS nor ING was immediately available for comment.

($1=.6123 Pound)

(Reporting by Rhys Jones; editing by Karen Foster)

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The European manufacturing industry’s contraction eased more than initially estimated in August, adding to evidence the region is emerging from the worst recession in six decades.

An index of euro-area manufacturing rose to 48.2 from 46.3 in July, Markit Economics said today. That was the highest in 14 months and exceeded the initial estimate of 47.9 on Aug. 21. The index is based on a survey of purchasing managers by London- based Markit and a reading below 50 indicates a contraction.

The 16-nation economy barely contracted in the second quarter after the European Central Bank injected billions of euros into markets and governments offered sales incentives to bolster consumer spending. European economic confidence increased more than economists projected in August. In China, the world’s third-largest economy, manufacturing expanded at the fastest pace in 16 months in August, data showed today.

Today’s report “reinforces mounting hopes and expectations that the euro zone will see an overall return to growth in the third quarter,” said Howard Archer, chief euro-area economist at IHS Global Insight in London. “For sustained, significant manufacturing growth to occur, there needs to be an extended growth in orders from both domestic and foreign markets and this currently remains far from certain.”

European stocks fell as the data showed euro-area manufacturing continued to contract, while an index of U.K. factory activity unexpectedly declined. The Dow Jones Stoxx 600 Index was down 1.3 percent at 232.92 at 10:35 a.m. in London.

‘Modest Recovery’

The services index rose to 49.5 in August from 45.7 in the previous month and the composite index increased to 50 from 47, initial estimates showed. Markit will release final figures for the services and composite indexes on Sept. 3.

The euro region will experience a “modest recovery” next year, the International Monetary Fund said in a report on July 30. The Washington-based lender with 185 member nations forecasts Europe’s economy will shrink 0.3 percent in 2010 after a 4.8 percent contraction this year.

Adding to signs of recovery, European industrial output rose more than economists forecast in June and investor confidence increased to a 12-month high last month. In Germany, Europe’s largest economy, business confidence increased for a fifth month in August to the highest level in almost a year.

In the U.S., the world’s biggest economy, manufacturing probably expanded in August for the first time in 19 months, according to the median of 74 forecasts in a Bloomberg News survey. The Institute for Supply Management’s factory gauge for last month will be published later today best payday loan. Other U.S. reports may show housing is rebounding.

National Elections

German Chancellor Angela Merkel, who faces national elections this month, is spending about 85 billion euros ($121 billion) in an effort to rekindle economic growth, including a 2,500-euro payment for consumers who scrap an old car and buy a new one. The government program was one of the reasons why the German economy returned to growth in the second quarter.

Volkswagen AG, Europe’s largest carmaker, on Aug. 7 raised its full-year sales forecast after government subsidies helped spur demand for Golf and Polo compact models. Renault SA, France’s second-largest carmaker, said on July 30 that it’s beating targets for costs and inventory cuts. Still, Bayerische Motoren Werke AG Chief Executive Officer Norbert Reithofer said last month that a “lasting” recovery is “not yet in sight” in the luxury-car market.

Unlimited Cash

“The freefall is over, but we must remember the level of economic activity is still below what it was a year ago,” ECB council member Erkki Liikanen said in an interview on Aug. 22. “Everyone remains cautious,” he said.

The Frankfurt-based ECB will probably keep its benchmark rate at 1 percent when council members meet in Frankfurt on Sept. 3. The bank is offering banks unlimited cash for 12 months and in July started buying covered bonds, securities backed by mortgages and public-sector loans, to boost lending.

ECB President Jean-Claude Trichet has said that rising unemployment may hurt a recovery and curb consumer spending. The euro-area jobless rate rose to 9.5 percent in July, the highest in more than 10 years, the European Union’s statistics office in Luxembourg said today.

Fighting unemployment must be “a priority,” ECB council member Ewald Nowotny said yesterday in Alpbach, Austria. While downplaying worries of a “W-shaped recession,” Nowotny said: “What I see is the danger that we’ll have very low rates of positive growth for some time.”

Even with a “slightly more positive” business forecast for the second half, Munich-based BMW faces a “harshly competitive” market, Chief Financial Officer Friedrich Eichiner said on Aug. 4. The largest maker of luxury cars is “bracing for a continuously difficult and volatile environment” for the rest of 2009, he said.

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The U.S. needs a “First Amendment for the economy” to check excesses in financial markets, said Columbia University President Lee Bollinger.

Bollinger, a constitutional scholar and one of three Federal Reserve Bank of New York directors representing the public, said in an interview yesterday that an independent regulator modeled on the judicial system should issue written rulings and “if it’s wrong, go back and change the precedent.”

Bollinger, 63, who has led New York-based Columbia since 2002 and served on the New York Fed’s board since 2006, called the economic crisis a “huge failure of public regulation.” He cautioned against relying on Congress or “the people who are engaged in the economic act to say, ‘Stop, we’re taking too much risk.’”

The Federal Reserve might be the right body to “stand outside the system” as an independent regulator, said Bollinger in the interview, in New York. In the same way the U.S. Constitution’s First Amendment protects free speech against censorship during wartime, a “First Amendment for the economy” could rein in financial excesses, he said.

President Barack Obama, as part of the overhaul of U.S. financial rules, last month proposed giving the Fed power to supervise all financial firms “whose failure could threaten the stability of the system.”

The credit system freeze that followed last year’s Lehman Brothers Holdings Inc.’s bankruptcy and Bear Stearns Cos. collapse ushered in the biggest financial crisis since the 1930s. The government since September has spent billions of dollars bailing out Citigroup Inc., Bank of America Corp., American International Group Inc., General Motors Corp. and housing finance companies Fannie Mae and Freddie Mac.

Lax Regulation

Global financial firms reported more than $1.47 trillion of writedowns and credit losses since 2007. Obama, elected in November, said during his campaign that lax government regulation helped lead to the crisis.

Bollinger criticized former Federal Reserve Chairman Alan Greenspan’s “mystique” and “lack of disclosure.” He praised the more open approach of current chairman Ben Bernanke, citing Bernanke’s July 27 speech at a public meeting in Kansas City, Missouri that was taped for broadcast on PBS television easy payday loan.

Bollinger was dean of the University of Michigan Law School in Ann Arbor from 1987 to 1994 and is on the Columbia Law School faculty in addition to being the university’s president.

Columbia’s endowment declined about 20 percent for the year ended June 30, less than Harvard University and Yale University, and the school will press ahead with a $6.2 billion campus expansion, Bollinger said.

Less Leverage

Columbia, with an endowment of $7.1 billion as of June 30, 2008, “used less leverage” than its peer universities, Bollinger said. Columbia relied less on its endowment for operating costs than Harvard, in Cambridge, Massachusetts, or Yale, in New Haven, Connecticut.

Columbia plans to break ground on its 17-acre Manhattanville campus before the end of the year, Bollinger said. Investment declines of about 25 percent at Yale and about 30 percent at Harvard have forced those schools to curb construction and slash spending. Columbia used its endowment for 13 percent of its operating budget in the fiscal year that ended June 30, while Harvard relied on its endowment for about 35 percent of its annual budget and Yale for about 44 percent, the schools have said.

The Manhattanville project “is unbelievably important to Columbia,” Bollinger said. While Harvard can wait for the economy to improve before resuming its expansion, “We can’t,” he said.

The project, in west Harlem adjacent to Columbia’s campus in the Morningside Heights section of Manhattan, will take more than two decades to complete and will include business, science and arts buildings, said Victoria Benitez, a school spokeswoman.

Columbia, founded in 1754, had 25,459 students including 4,247 undergraduates at Columbia College, during the last academic year, according to the university. Alumni include President Obama, Supreme Court Justice Ruth Bader Ginsburg, and the actress Maggie Gyllenhaal.

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China is likely to raise interest rates in 2010 as a recovery strengthens in the world’s third- biggest economy, a Bloomberg News survey shows.

The key one-year lending rate will climb 54 basis points next year to 5.85 percent, according to the median forecast of nine economists. The deposit rate will rise by the same margin to 2.79 percent.

Record new loans of more than $1 trillion in the first half of this year drove a rebound in China’s economic growth to 7.9 percent in the second quarter from a year earlier, government figures showed yesterday. The central bank will keep interest rates unchanged at a four-year low for the rest of this year to cement the recovery, the survey showed.

“Interest-rate hikes can be ruled out for the rest of this year because the global economic situation still isn’t clear and Chinese policy makers need to stay in a cautious mode,” said Sherman Chan, an economist with Moody’s Economy.com in Sydney.

The survey was compiled after the government released second-quarter gross domestic product figures in Beijing yesterday. The first-half economic expansion laid the foundation for meeting the government’s 8 percent growth target for the year, the statistics bureau said.

The central bank is using bill sales to drain cash from the financial system and push up money-market rates, countering record growth in money supply that threatens to create bubbles in stocks and property payday loan online. The Shanghai Composite Index has climbed 75 percent this year.

Failed Debt Sales

The finance ministry didn’t meet its target in a debt sale today, the third failure in two weeks. Demand for debt is cooling after new share sales resumed this month and as investors favor assets that benefit most from the recovery.

Most economists said reserve requirements, which specify the proportion of deposits that lenders must park with the central bank, will increase in 2010 after staying unchanged this year. The ratio is 15.5 percent for big banks and 13.5 percent for small lenders.

A previous Bloomberg News survey this month showed economists were split on whether interest rates would rise in 2010 or stay unchanged. They were also divided then on the outlook for reserve requirements.

While money supply is surging, consumer prices are continuing to fall in China, declining in June for a fifth straight month. “Monetary factors” have yet to add pressure for prices to rise, the statistics bureau said in a commentary published today.

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Federal Reserve Chairman Ben S. Bernanke will defend his unprecedented actions to prevent a financial collapse as debate on whether he should be reappointed begins.

Bernanke, whose term expires Jan. 31, faces lawmakers at a hearing this week on steps to aid Bank of America Corp.’s takeover of Merrill Lynch & Co. as Congress increasingly questions the Fed’s interventions. The session comes after a two-day meeting on monetary policy that starts today.

President Barack Obama has said the Fed chief has done an “extraordinary job” without committing to reappoint him. Treasury Secretary Timothy Geithner, in reference to a possible candidacy for Obama economic official Lawrence Summers, told a lawmaker last week it wasn’t “appropriate” to pledge that top advisers weren’t in the running for the job.

“The vultures are circling,” said David M. Jones, a former Fed economist who is president of DMJ Advisors LLC in Denver. Bernanke is “going to be on the defensive,” even after “turning confidence around” since the depths of the crisis, he predicted.

At stake is whether Bernanke, 55, pilots the Fed into an expanded financial-supervision role after overseeing the most aggressive use of the Fed’s powers since the Great Depression.

Odds for Bernanke

Through doubling the central bank’s balance sheet to $2.1 trillion, Bernanke has helped thaw credit markets and put the economy on a path toward recovery. Odds favor the former Princeton University economist, a Republican: Reappointment may be less disruptive to investors, and no first-term president has replaced a sitting chairman in 30 years. Many on Wall Street and in Washington view it as likely Bernanke will be reappointed.

“There’s a very strong case for reappointment,” said Douglas Lee, who runs Economics from Washington in Potomac, Maryland, and worked on Capitol Hill in the 1970s. “Removing a Fed chairman who is generally perceived to have done an outstanding job would be an enormous problem.”

Traders on online exchange Intrade place 65 percent odds on Bernanke’s renomination.

Still, any Obama decision may be half a year away, and the economy and financial markets could shift again. The jobless rate is still rising, and economists anticipate it will reach a quarter-century high of 10 percent at year-end. The Fed is mandated by Congress to achieve maximum employment as well as stable prices.

Summers, Yellen

Besides keeping Bernanke, Obama’s options include appointing Summers or Janet Yellen, both among the most prominent Democratic economists and veterans of the Clinton administration, Jones said. Bill Burton, a White House spokesman, declined to comment.

Summers, 54, a former Treasury secretary who heads Obama’s National Economic Council, is considered the front-runner should the president want a change. San Francisco Fed President Yellen, 62, was previously a Fed governor and chairman of the Council of Economic Advisers and would be the first female Fed chief.

Summers wants the job, Senator Robert Bennett of Utah, the No. 2 Republican on the Banking Committee, said in an interview. Asked if he would support Summers for Fed chairman, Bennett said: “I am told that Larry would very much like me to cashadvance. I would have no objection to Larry.”

Bernanke has “done a good job under very difficult conditions,” Bennett also said. “Whether the president feels that way or not is another question.”

Frank Won’t Commit

House Financial Services Committee Chairman Barney Frank said he’s “very pleased” with Bernanke. “Beyond that I wouldn’t say” anything about a renomination, the Massachusetts Democrat said in an interview.

Bernanke took office in February 2006 with an agenda to make the Fed more transparent in setting monetary policy and to depersonalize the institution from its chairman, conferring weight to the views of other top officials. In 2007, his term became engulfed by the biggest financial crisis since the 1930s.

His record includes preventing the collapse of Bear Stearns Cos., extending emergency loans to investment banks, financing purchases of corporate debt, bailing out American International Group Inc. and shoring up consumer-credit markets.

Some signs have emerged that the crisis is waning. U.S. companies have sold at least $698 billion of debt this year, 24 percent more than the same period of 2008, Bloomberg data show. The Libor-OIS spread, which measures banks’ willingness to lend, has narrowed to 0.37 percentage point, from a record 3.64 points in October.

FOMC Meeting

The policy-setting Federal Open Market Committee gathers today in Washington to consider any change to its pledges to purchase as much as $300 billion of Treasuries and $1.45 trillion of housing debt and keep its benchmark interest rate near zero. The FOMC statement is expected about 2:15 p.m. tomorrow.

Among Bernanke’s most controversial steps have been allowing Lehman Brothers Holdings Inc. to fail and his discussions regarding Bank of America’s acquisition of Merrill Lynch.

His role in that takeover will be examined in a House Oversight Committee hearing June 25, when lawmakers plan to question whether he applied inappropriate pressure to Bank of America to complete the purchase of Merrill Lynch after the company discovered mounting losses.

At a June 11 hearing with Bank of America Chief Executive Officer Kenneth Lewis, the committee released internal Fed e- mails, some from Bernanke, obtained by subpoena. One missive from the Fed chairman indicated he saw Lewis’s threat to scuttle the deal as a “bargaining chip.”

House Subpoena

Republicans on the committee used the e-mails to argue the government overstepped its authority. Last week, the panel issued another subpoena for more Fed documents.

Bernanke has recent history on his side: Presidents Ronald Reagan, George H.W. Bush, Clinton and George W. Bush all reappointed Fed chairmen in their first terms. “He’s still got at least a decent chance,” said Jones, putting the odds at about 60-40 in Bernanke’s favor.

“His record has not been perfect, but it’s been pretty good,” said Senator Sherrod Brown, an Ohio Democrat on the Banking Committee, which will vet the nomination. On whether to keep Bernanke, “I leave that to the president,” he said.

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