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The Federal Deposit Insurance Corp. may revise a $1.4 trillion debt-insurance program to address complaints that it would spur an exodus from the $250 billion market for overnight loans between banks.

The FDIC is considering charging different fees depending on the maturity of the debt, instead of its previous plan for a flat fee. Companies including JPMorgan Chase & Co. and Bank of America Corp. said the original proposal threatened to make the overnight federal funds market too costly compared with alternatives such as direct loans from the Federal Reserve.

“We are definitely thinking through how to respond to some of the concerns that have been raised,'' Art Murton, director of the FDIC's insurance and research division, said in an interview. “Complexity is somewhat inevitable. We're doing our best to take away unnecessary confusion.''

The deliberations show how officials are trying to avoid some of the unintended consequences that have plagued other government programs. Banks in September protested a Treasury plan to insure money-market funds, saying it could spur a rush out of bank deposits. Some companies claim the Fed's purchases of top-ranked commercial paper penalize second-tier firms.

The FDIC had proposed charging a standard fee to insure all eligible senior unsecured debt. Banks argued that the federal funds market should be treated differently. If that market costs too much, banks might switch to government lending programs like the Fed's discount window or Federal Home Loan Bank advance programs, they said.

Banks Complain

“Such an outcome would not achieve the FDIC's goal of improving shorter-term unsecured inter-bank funding markets,'' law firm Sullivan and Cromwell wrote in a letter to the agency on behalf of nine large banks, including Goldman Sachs Group Inc., JPMorgan and Bank of America.

High premiums on federal funds lending “could effectively shut down the overnight funds market,'' said Louis Crandall, chief economist of Wrightson ICAP in Jersey City, New Jersey. “Most current activity in the overnight funds market would either not take place or be diverted to other instruments such as Eurodollars that are not subject to the FDIC's new fees.''

Banks have until Dec. 5 to decide whether to participate in the FDIC's program. Premiums started accruing on Nov. 13 for all banks, and those that don't want to take part must notify the agency. The FDIC plans to release final regulations for the program as soon as this week.

“We have certainly heard a lot on the fed-funds issue,'' Murton said.

Backstop for Lending

The program is separate from Treasury Secretary Henry Paulson's $700 billion bank bailout freecreditscore. It is designed to provide a broad backstop for interbank lending. The FDIC rolled out the plan on Oct. 14, in response to debt guarantees announced by European governments.

The FDIC is offering the debt insurance through its Temporary Liquidity Guarantee Program, which also includes expanded deposit insurance for business checking accounts. As laid out in the interim regulation, the FDIC will guarantee all new senior unsecured debt issued between Oct. 14 and June 30, 2009, up to a cap that will be set for each institution when it signs up.

Critics say the program is too complicated and won't be as effective as intended. FDIC Chairman Bill Isaac, now chairman of Secura Group LLC, said the idea is “convoluted'' and has drawn fire from smaller banks.

“The small banks are just livid about what's going on,'' Isaac said. “The small banks feel like they didn't have anything to do with creating these problems, yet they're being asked to pay for them.''

`Competitive Disadvantage'

Chip MacDonald, a banking lawyer at Jones Day, said banks may choose to participate so they don't lose an edge against rivals. Bankers who opt out “may be at a competitive disadvantage,'' he said.

Banks are automatically enrolled unless they opt out. If a bank holding company joins, all of its banking subsidiaries must also join, and the program terms apply to all commercial paper, promissory notes and other eligible debt like federal funds loans. That was a change in the FDIC's thinking, Murton said.

“We may have signaled an openness'' to partial participation, he said. “As we thought more about it in the next few days, we decided that it made more sense to have all in or all out for the instruments and the entities.''

Nonbank affiliates are excluded from the program. A finance unit, such as General Electric Co.'s, can apply to join, the FDIC said. GE said last week it had been accepted, which will provide a backstop for up to $139 billion in the company's debt.

That puts the company on a more even footing with banks, according to Crandall.

“Once the terms of the FDIC guarantee program are set, we're likely to see a wave of issuance of guaranteed medium-term notes by participants,'' Crandall said.

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Belmont University broke ground Tuesday on a permanent home for the Belmont School of Pharmacy.

The $30 million building will provide a consolidation of all the university’s health science studies: pharmacy, nursing, social work, occupational therapy and physical therapy.

“Establishing a permanent, state-of-the-art facility for our school of pharmacy represents another significant step for Belmont University in addressing a serious health care provider shortage in this country, especially as it relates to pharmacists and nurses,” Belmont President Bob Fisher says in a statement one hour cash loan.

The 90,000-square-foot building will contain laboratories for student and faculty research and a licensed, state-of-the-art pharmacy. The building will also include a four-level underground parking garage to provide additional spaces for Belmont’s growing student body.

The architect for the project is Nashville-based Earl Swensson Associates. R.C. Mathews, another Nashville-based firm, is the contractor.

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The International Monetary Fund reached agreement with Ukraine on a $16.5 billion loan to help support the nation's financial system as turmoil in global credit markets and recession concerns sweep eastern Europe.

The 24-month loan is conditional on parliamentary approval of legislation to support the country's banks, the Washington- based lender said today in a statement. Ukraine also will need to balance its budget by reining in social spending and narrow the current-account deficit, the Kiev-based central bank said in a separate statement.

Eastern Europe is being buffeted by the global credit crunch as investors stung by losses in developed nations sell riskier emerging-markets stocks, bonds and currencies. Ukraine is the first nation in the region to receive IMF help during the crisis. Belarus this past week joined Iceland, Pakistan, Hungary and Ukraine in requesting at least $20 billion of emergency loans from the IMF to help repay debt.

“The money is only half of the issue, conditionality is key,'' Timothy Ash, head of emerging-market research at Royal Bank of Scotland Group Plc in London, said in a telephone interview. “We hope the Fund is maintaining its push for a more flexible exchange rate, far-reaching reforms in the banking sector and more privatization.''

Banks

President Viktor Yushchenko faces an economic meltdown as prices for the nation's main exports, including steel, drop and a weakening currency makes goods purchased abroad more costly. He has urged the cabinet to raise custom duties to curb imports and help domestic producers boost exports to counter the widening trade gap.

Ukraine agreed to set up a fund that will buy stakes in the nation's banks and pass legislation that forces lenders to halt dividend payments to retain capital, central bank official Serhiy Kruhlik said in a telephone interview in Kiev today.

The central bank took control of closely held Prominvestbank on Oct. 7 and promised an injection of 5 billion hryvnia ($830 million) to bail out Ukraine's sixth-biggest bank by assets after a run by depositors.

The government also plans to raise the state guarantee on bank deposits to 100,000 hryvnia from 50,000 now and will use proceeds from privatizations and bond sales for the bank bailout fund, according to Kruhlik. The parliament is scheduled to vote on the amended legislation on Oct no teletrack payday loans. 28.

`No Consensus'

“As of now, there is no consensus between Ukrainian political forces about a stabilization program,'' said Svitlana Maslova, an analyst at Barclays Capital in London. Investors “will closely look at the details of the policy package to assess the impact of the program.''

Industrial production contracted 4.5 percent from a year earlier in September and the trade gap widened to a record $12.5 billion in the eight months through August.

Ukraine's current-account deficit may widen to $15 billion this year, central bank governor Volodymyr Stelmakh said earlier this month. The current-account gap was $7.5 billion, or about 6 percent of gross domestic product, in the first eight months of the year.

The former Soviet republic's currency tumbled 13 percent last week and touched a record 6.0812 per dollar on Oct. 24. the lowest since the hryvnia was introduced in 1996. Ukraine's annual inflation rate almost tripled to a record 31.1 percent in May before easing back to 24.6 percent in September.

Elections

Ukraine is the least creditworthy of Europe's transition economies measured by the cost of credit-default swaps, conceived to protect bondholders against default. Its economic predicament is complicated by a political crisis that led to collapse of the government and calling of early elections.

Yushchenko dissolved the parliament on Oct. 8 and a new one will be chosen on Dec. 14, the second national elections in as many years. His party, which seeks closer ties with the European Union and the North Atlantic Treaty Organization, quit the coalition on Sept. 3 after former ally, Prime Minister Yulia Timoshenko, joined with the pro-Russian opposition to strip the president of some powers.

Yushchenko and Timoshenko joined forces to win the 2004 election after the bloodless Orange Revolution on promises to move the country toward the West. After a split in 2005, the two reunited before last year's elections.

Since then, Yushchenko and Timoshenko have been locked in a battle over how to tackle Europe's fastest inflation rate, sell state assets and how to spend budget funds.

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Nouriel Roubini, the professor who two years ago predicted the financial crisis, said world financial officials should orchestrate interest-rate cuts of at least 1.5 percentage points to help avert a depression.

A temporary guarantee of all bank deposits, unlimited liquidity for solvent financial institutions and fiscal-stimulus measures are also needed, the New York University professor of economics said in a commentary e-mailed today to Roubini Global Economics subscribers.

“It will take a significant change in leadership of economic policy and very radical, coordinated policy actions among all advanced and emerging-market economies to avoid this economic and financial disaster,'' said Roubini, 50. From late 2006, he highlighted the dangers flowing from a likely U.S. housing crisis.

The economist urged immediate action as officials from the International Monetary Fund, World Bank and Group of Seven nations meet in Washington this weekend. Stocks tumbled around the world today as the yearlong credit crisis deepened, sending Japan's Nikkei 225 Stock Average to its worst weekly drop in history. The MSCI World Index was set for its biggest weekly decline since records began in 1970.

In the U.S., the Dow Jones Industrial Average fell below 9,000 for the first time since 2003 yesterday. More than $4 trillion has been erased from global equities this week.

Investor Panic

“At this stage the risk of an imminent stock-market crash — like the one-day collapse of 20 percent plus in U.S. stock prices in 1987 cannot be ruled out,'' said Roubini. “The financial system is breaking down, panic and lack of confidence in any counterparty is sharply rising and investors have totally lost faith in the ability of policy authorities to control the meltdown.''

In a coordinated emergency move on Oct. 8, the Federal Reserve, European Central Bank, Bank of England, Bank of Canada and Sweden's Riksbank cut their benchmark rates by half a percentage point. Switzerland also took part and China announced a cut at the same time.

Roubini proposed “another rapid round of policy rate cuts of the order of at least 150 basis points on average globally.''

Officials are trying a range of approaches. U.S. Treasury Secretary Henry Paulson plans to buy stakes in banks, U.K. Chancellor Alistair Darling wants guarantees for their lending and German Finance Minister Peer Steinbrueck is pushing for greater regulation.

Bursting Bubbles

One of Roubini's proposals is an agreement between countries with current-account deficits and those with surpluses to maintain orderly financing of deficits and “avoid a disorderly adjustment of such imbalances.''

The world is experiencing the simultaneous bursting of housing, equity, bond, credit, commodity, hedge-fund and private-equity bubbles, the economist said, and even better- performing economies such as Brazil, Russia, India and China are at risk of “a hard landing.''

The threat of a global financial meltdown means a decade- long “L-shaped'' recession — like Japan's after its real estate and equity bubbles burst — cannot be ruled out, Roubini said.

As demand falls, the next challenge may be deflation as the world faces a glut of excess capacity and goods, he said.

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Zvue Corp. made Ulysses Curry, who joined its board six weeks ago, chairman and interim CEO, replacing former CEO Jeff Oscodar.

Oscodar has been CEO for four years at Zvue, which was formerly named Handheld Entertainment.

Curry, once the chief financial officer of Accuray Inc. (NASDAQ: ARAY), took a seat on the San Francisco company’s board on Aug. 4. There’s been a lot of turbulence on the board this summer, with several directors quitting their seats. Robert Austrian left the board Sept. 9.

Zvue (NASDAQ: ZVUE) lost two directors in July, when Allan Grafman and Mitchell Koulouris quit, leaving the company with a shortage of independent directors no fax payday loans. Koulouris and Grafman were added to the board as independent directors effective March 4, after David Hadley and Geoff Mulligan quit. Both Koulouris, 47, and Grafman, 54, worked on the nominating, compensation and audit committees.

CFO Tom Hillman quit Aug. 15.

The company runs web sites like holylemon.com, dorks.com and funmansion.com. It also sells MP3 players and makes content through royalty deals with content providers for the device.

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South Korea plans to build 5 million homes over the next 10 years to bolster an economy that is facing a decline in consumer spending and a slowdown in export demand.

The project is estimated to cost about 12 trillion won ($10.6 billion) a year, the Ministry of Land, Transport and Maritime Affairs said on its Web site yesterday. The government will build an average 500,000 homes a year through 2018, including 300,000 annually in metropolitan Seoul.

Increased construction may buoy an industry that accounts for 18 percent of the economy and has been losing jobs since the fourth quarter of 2007. President Lee Myung Bak's six-month-old government, which has experienced a slump in popularity, announced plans this month to cut income taxes, build roads and ports and provide aid to small businesses.

“The government wants to protect the property market from seeing a drastic slump like the U.S.,'' said Ryu Seung Sun, an economist at HMC Investment Securities Co. in Seoul. “The measures are likely to help stabilize the housing market, but there's a risk this may result in an oversupply of homes.''

The $970 billion economy grew 4.8 percent last quarter, the slowest annual pace in more than a year, as consumers cut back on discretionary spending as living costs soared cheap payday loans. Construction investment shrank in the first two quarters of the year, according to a central bank report.

Popularity Decline

Voter support for the government halved to 24 percent from a 52 percent approval rating at the start of the Lee administration in March, according to a Chosun Ilbo newspaper poll on Aug. 25.

The government announced plans last week to spend 50 trillion won building roads, free economic zones and ports over the next five years. The administration on Sept. 1 said it will lower income taxes, provide aid to small business and remove some property taxes to spur economic growth.

“We need to continue supplying homes to meet an estimated annual demand for 500,000 homes and to stabilize the housing market,'' the ministry said in the statement. “There's also a need to help homeless people to own homes.''

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Stirling Sotheby’s International Realty plans to host a global auction of selected luxury homes and properties at Reunion, Bella Collina and Hammock Beach on Oct. 25.

Ginn Reunion Resort is a luxury golf community that features three signature golf courses designed by Arnold Palmer, Jack Nicklaus and Tom Watson.

Hammock Beach is a luxury beachside resort on Florida’s east coast, featuring two championship golf courses designed by Jack Nicklaus and Tom Watson.

Bella Collina is a luxury lakeside community in Lake County that features a golf course designed by Nick Faldo.

More than 20 homes are expected to be auctioned.

“We believe this will be one of the most exciting auctions of the year,” said Roger Soderstrom, owner and founder of Stirling Sotheby’s International Realty, in a written release us fast cash. “We are expecting a great deal of interest from buyers across the globe, especially in the United Kingdom.”

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The Glendale Police Department is looking for suspects who assaulted and robbed a woman in the Fry's Food Store parking lot at 43rd and Northern avenues.

The suspects, who were seen driving a small red pickup truck, allegedly grabbed the woman's purse Aug. 31 while she was unloading groceries faxless payday advance. The woman was dragged by the truck briefly causing some minor injuries after trying to grab her purse, police officials said.

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Dillard’s will close its store at the Palm Beach Mall. The retailer said on Friday it will be laying off 109 employees by Oct. 31.

It’s one of 14 locations nationwide that Dillard’s (NYSE: DDS) plans to close. The Little Rock, Ark.-based company operates in 29 states.

Dillard’s also said Friday it will close its travel agency business as part of the company’s strategy of reducing its underperforming units.

Dillard’s is working to relocate the 160 associates who work in the agencies, which are in 43 of the company’s 318 stores paydayloan. The agencies are no longer booking new travel arrangements, but will honor pending travel bookings.

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Treasury Secretary Henry Paulson's response to the sinking fortunes of Fannie Mae and Freddie Mac might boil down to picking which investors get hurt and by how much.

At stake if Paulson does intervene: the fate of worldwide bondholders of $5.2 trillion of agency and mortgage-backed debt and scores of large banks, insurers and pension funds that own the firms' common and preferred shares.

Paulson's choices probably include buying Fannie's and Freddie's bonds, a special class of preferred shares or preferred shares convertible into common stock, analysts and investors said. The terms and conditions of any purchases would put the government ahead of other creditors and stockholders, while ensuring that bondholders are protected, they said.

“He's had zero clarity on this whole issue, and until the market knows where Hank's going to be in the capitalization structure, then it gets worse not better,'' said Paul McCulley, a fund manager at Pacific Investment Management Co., which has the world's largest bond fund.

“The presumption'' is that holders of the government- chartered companies' subordinated bonds “will be covered,'' McCulley said in an interview on Bloomberg Television from Jackson Hole, Wyoming. Common shareholders would be wiped out, he predicted.

Emergency Power

Paulson got the power to make purchases of the two companies' debt or equity in legislation enacted July 30 that was aimed at shoring up confidence in the beleaguered mortgage- finance companies.

The Treasury chief could also forego using that authority, and wait until Fannie Mae's and Freddie Mac's capital is so eroded that regulators can put them into receivership.

“I don't think they'll do half-measures if it means using taxpayer funds,'' said Andrew Laperriere, managing director at International Strategy & Investment Group, a money management and research firm in Washington.

“That requires steps including complete control,'' said Laperriere, who used to work as chief economic adviser to former Republican House Majority Leader Richard Armey.

Paulson telephoned Senate Banking Committee members this week to tell them the Treasury is closely monitoring the situation and, for now, doesn't plan to inject taxpayer funds, according to a Senate aide who spoke on condition of anonymity.

Assuring Lawmakers

“We are staying on top of the situation and communicating with the companies and their regulators,'' Treasury spokeswoman Jennifer Zuccarelli said.

Meanwhile, “top executives'' at Freddie Mac “have been talking with many potential investors this week,'' said Sharon McHale, a spokeswoman for the McLean, Virginia-based company.

Shares in Washington-based Fannie have dropped 60 percent and those of Freddie have lost 64 percent since July 30 quick payday loan.

“Private shareholders should be concerned,'' said Edwin Truman, a senior fellow at the Peterson Institute for International Economics in Washington and a former official at the Treasury and the Federal Reserve. Traders “will drive the price of the stocks down to nickels and dimes,'' at which point Paulson will step in, he predicted.

Truman forecast the Treasury would end Fannie and Freddie dividend payments, with officials taking over management.

Fannie, the largest mortgage-finance provider, was created in the 1930s and became a publicly owned company in 1968. Freddie was started in 1970. Designed to boost homeownership, the companies issued debt to finance purchases of mortgages and package home loans into bonds sold on to investors.

Banks at Risk

Their debt is held by companies including MetLife Inc., the largest U.S. life insurer, American Equity Investment Life Holding Co., and GE Asset Management Inc. Preferred shares are held by banks from Philadelphia-based Sovereign Bancorp to Frontier Financial Corp. of Everett, Washington.

As mortgage defaults climbed, concern mounted Fannie and Freddie lacked sufficient capital. Paulson asked Congress for emergency powers to shore up support for the firms.

If either company has trouble selling bonds to finance maturing debt, Paulson's hand may be pressed. They have about $20 billion of unsecured debt due on average every week, with more than $220 billion maturing by the end of next month.

A takeover could also be triggered if either company fails to meet its regulatory capital standards, to be released by the Federal Housing Finance Agency next month.

`Act Soon'

“Treasury might be forced to act soon to fight a market- psychology problem instead of being able to act on its own time,'' said Joshua Rosner, an analyst with independent research firm Graham Fisher & Co. in New York.

There's no consensus about how widespread the losses would be in an intervention. Pete Davis, president of Davis Capital Investment, an independent advisory firm in Washington, argued that both equity and subordinated bondholders wouldn't be protected, with owners of mortgage-backed securities and senior debt kept secure.

Davis wrote in a note yesterday that Paulson will probably aim to put off using taxpayer funds as long as Fannie and Freddie are still able to fund the U.S. mortgage market.

“Paulson does not want his legacy to be that he committed $50 billion or more of taxpayer money to bailing out the'' firms, Davis wrote.

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