assistance with collection accounts

CERNOBBIO, Italy -(Dow Jones)- The European Commission will make a decision on a EUR25 billion restructuring plan for Anglo Irish Bank in the coming weeks, said European Union Competition Commissioner Joaquin Almunia Saturday.

Almunia confirmed he will see Irish Finance Minister Brian Lenihan this week to discuss the restructuring plan.

"I will be in a position to probably communicate a decision in the coming weeks," Almunia said at a press conference Saturday.

"We're not there yet."

The Irish government is opposed to shutting down the bank, which it says would cost taxpayers around EUR70 billion.

Copyright © 2010 Dow Jones Newswires

DUBLIN, Sept 4 (Reuters) - Nationalised Anglo Irish Bank[ANGIB.UL] will be "decommissioned", with a decision on its fateexpected within a few weeks, a junior government minister wasquoted on Saturday as saying.

The comments by Conor Lenihan, a minister of state in chargeof science, technology, innovation and natural resources, wasthe latest signal from the government that it was about to bow togrowing political pressure to shut down the lender.

"It has to be decommissioned, it will be decommissioned --fairly swiftly in terms of the actual decision being made in afew weeks with the permission of Europe," Conor Lenihan, who isthe brother and ruling party colleague of Finance Minister BrianLenihan, told the Irish Independent newspaper.

Investors see the escalating cost of rescuing Anglo Irish asa major threat to Ireland's creditworthiness and the nextpotential euro zone troublespot after Greece. [ID:nLDE67T1PA]

Anglo's new management has proposed carving out a smallfunctioning bank via a "good bank/bad bank" split but ministershave signalled a shift in policy towards an eventual wind-down.

The government -- with a wafer-thin parliamentary majority-- will be hard-pressed to ignore public opinion, already aghastat having to shell out 25 billion euros for the bank's recklessproperty lending while facing yet another round of tax hikes andspending cuts in this December's budget.

The final decision will be up to the European Commission.

Prime Minister Brian Cowen said on Friday that a swift windup could cost 70 billion euros or more and would not be in thetaxpayers' interest. [ID:nLDE68215P]

"There has to be an orderly wind-down," Conor Lenihan said."But it would be costly and dangerous to wind it down quickly."

(For an analysis on Anglo Irish's possible fate and theimpact on Ireland please see: [ID:nLDE682075]) (Reporting by Andras Gergely, editing by Mike Peacock)

* IMF representation issues also discussed (Updates with quotes, details)

By Yoo Choonsik and Rachel Armstrong

GWANGJU, South Korea, Sept 4 (Reuters) - G20 delegatesagreed on Saturday global economic recovery would endurealthough the speed of expansion may slow, a South Koreanofficial said.

Kim Jae-chun, deputy governor of South Korea's central bankwho co-chaired the meeting of G20 finance and central bankdeputies, also told reporters they thought market reaction toconcerns about economic slowdown was overblown.

"There was an agreement that the (global) recovery willcontinue even though the speed may slow from the level wethought of two to three months ago," Kim said after theirmeeting in the country's southwestern city of Gwangju.

Another official from a member country, who spoke oncondition of anonymity, said there was discussion about theissue of readjusting representation on the InternationalMonetary Fund's executive board but declined to elaborate.

John Lipsky, the IMF's first deputy managing director, declined to comment when asked if the issue would be resolvedsoon.

The G20 members have pledged to reach an agreement on theissue by the leaders' summit in Seoul in November but Europe hasbeen reluctant to accept the proposals as it would diminish itsvoting rights on the board.

"Everybody is working very hard on it," said Jean-PierreLandau, deputy governor of the Bank of France.

A European Union diplomat said on Friday that EU financeministers would hold substantive talks on a U.S. push to cutEurope's representation at the IMF at an informal meeting at theend of this month. [ID:nLDE68219R]

The United States, frustrated at Europe's refusal to sharemore IMF power with emerging economies, took unprecedentedaction last month to block plans that would have kept Europe'slong-running dominance over the 24-member board. [ID:nN19220411]

The officials from the Group of 20 developed and majoremerging economies and from international organisations willmeet again on Sunday to discuss issues including reform in theglobal financial regulatory framework. (Editing by Mike Peacock)

WASHINGTON (Reuters) - Hurricane Earl wasdowngraded to a tropical storm Friday, weakening as itswirled up the U.S. eastern seaboard, the U.S. NationalHurricane Center said.

The storm, which earlier had been a major hurricane, wasnow packing sustained winds of 70 mph (110 kph), theMiami-based hurricane center said.

(Reporting by Will Dunham, Editing by Chris Wilson)

* Mariner fire an "industrial accident"-Salazar (Recasts, adds government inspectors don't find leaking oil)

By Bruce Nichols

HOUSTON, Sept 3 (Reuters) - U.S. government inspectorsfound no leaking oil at Mariner Energy Inc's burned platform inthe Gulf of Mexico, officials said late on Friday, allayingfears about more environmental damage after BP's massive spill.

"Inspectors have reported no sign of pollution," theInterior Department said after government experts checked outthe platform for several hours on Friday.

The inspectors confirmed that the safety valves were shutgoing to the platform's oil and natural wells, pipelines wereclosed and the platform's tanks and pumps "are secure," thedepartment said.

On Thursday, Mariner's platform burst into flames. Theaccident follows BP Plc's disastrous Macondo well rupture onApril 20 which caused the death of 11 workers and unleashed theworld's worst offshore oil spill.

A light oil sheen had been spotted earlier near Mariner'soffshore facility, but was thought to be related to Thursday'sefforts to extinguish the fire, the U.S. Coast Guard said.

The cause of the fire, which forced the evacuation of theoil and gas production platform's 13-member crew, is not yetknown.

Interior Secretary Ken Salazar told reporters in Anchorageon Friday the Mariner fire appeared to be "another industrialaccident," and was not comparable to the BP spill.

Even so, the U.S. government promised a vigorous probe.

"We will use all available resources to ensure that we findout what happened, how it happened, and what enforcement actionshould be taken if any laws or regulations were violated," saidMichael Bromwich, director of the department's Bureau of OceanEnergy Management that oversees offshore drilling.

The platform is located about 100 miles (160 km) south ofVermilion, Louisiana, in shallow water. The facility is notaffected by the U.S. government's six-month deepwater drillingmoratorium, which only applies to rigs, not productionplatforms.

Automated shut-off equipment turned off the flow of oil andgas from the platform's seven producing wells, according to thecompany.

The fire was the fifth reported at offshore sites operatedby Mariner since October 2006, according to government data.

None of the earlier fires caused fatalities, althoughworkers were injured in two of the accidents. The company alsosuffered a blowout while drilling a well about 90 miles (145km) off the Louisiana coast in May 2008, but the situation wasbrought under control within a few hours.

The Vermilion platform was last inspected in January andwas found to have three minor compliance violations, governmentdata showed.

Shares of Mariner closed nearly 2 percent higher at $23.16on the New York Stock Exchange. (Additional reporting by Kristen Hays in Houston, Yereth Rosenin Anchorage and Tom Doggett in Washington, D.C.; Writing byAnna Driver; Editing by Sofina Mirza-Reid and Lincoln Feast)

SAN FRANCISCO -(Dow Jones)- A battle between a group of U.S. oil companies and California environmentalists is intensifying ahead of a November referendum on the state's landmark climate law.

A proposal launched by two Texas-based oil refiners calling for the suspension of California's 2006 plan to combat climate change gained two new big-name supporters this week, ratcheting up the contest.

Carly Fiorina, a California Republican and former head of Hewlett-Packard Co. (HPQ), who is running for a U.S. Senate seat, said Friday that she supports the proposal, called Proposition 23. Records released by the state late Thursday showed the pro-Proposition 23 campaign got a $1 million contribution from privately held Koch Industries, owned by brothers Charles and David Koch, who are well known backers of libertarian and conservative groups.

Proposition 23 would suspend California's climate rules until the state's unemployment rate--currently above 12%--drops to 5.5% for four consecutive quarters, a level seen just three times in the last 30 years. The initiative was initially launched by Tesoro Corp. (TSO) and Valero Corp. (VLO), both of San Antonio, which own refineries in California that will be required to cut their greenhouse-gas emissions under the climate law. But the proposal, which will be put before voters Nov. 2, is increasingly gaining support from outside the state.

A Missouri organization called the Adam Smith Foundation has contributed nearly $500,000 to the "Yes On 23" campaign.

Oil refiners and other opponents of California's climate regulations say the rules will be costly for their companies and for consumers, and that California and other states should defer to the federal government on important matters such as climate policy.

Supporters of the climate law, including Gov. Arnold Schwarzenegger, a Republican, say it is crucial for protecting the environment and driving the creation of thousands of green jobs, while attracting investment to California's growing renewable energy and clean-technology industries.

As both sides tout jobs and economic opportunity, the struggle in California reflects a widening gap in the U.S. between older polluting industries and younger clean-energy industries as the nation contemplates federal climate-change legislation.

"What Proposition 23 is trying to do is move our state backwards and cost us our clean energy jobs," said Tom Steyer, founder of San Francisco hedge fund Farallon Capital Management LLC and co-chair of the campaign to defeat Proposition 23. "What we're talking about is jobs in California, the future economic development of our state and continuing to attract the lion's share of investment in the U.S. in clean energy." He has contributed $5 million to defeat Proposition 23.

While California's pending cap-and-trade regulations are a source of concern for heavy industry, the state's low-carbon fuel standard, which aims to cut the carbon content of transportation fuels by 10% by 2020, is reviled by refiners, who view the regulations as a major threat to their business.

"We were outspoken on our opposition to federal cap-and-trade," said Bill Day, a spokesman for Valero, which has contributed more than $4 million to support Prop. 23. "This is a statewide effort that makes even less sense because a problem issue like global warming cannot be solved by one state taking measures."

The National Petrochemical & Refiners Association and the American Trucking Association are suing California in federal court to overturn the low-carbon fuel standard, saying the rule violates the interstate commerce clause of the U.S. Constitution.

"The concern that we have with a low-carbon fuel standards program, not just in California, is that our fuel is basically carbon and there is almost no way to reduce the carbon intensity of our fuel," NPRA Vice President Greg Scott said in an interview.

Oil majors Chevron Corp. (CVX), Royal Dutch Shell Plc (RDSB.LN) and BP Plc (BP.LN), which also own refineries in California, have remained neutral on the issue.

Neither the pro- nor anti-Proposition 23 campaigns would say when they plan to start issuing political advertisements, but both are raising money in what is likely to be a fierce and closely watched plebiscite on climate-change policy.

Copyright © 2010 Dow Jones Newswires

By Clare Baldwin, Soyoung Kim and Kevin Krolicki

NEW YORK/DETROIT, (Reuters) - The U.S. government islikely to take a loss on General Motors Co in the firstoffering of the automaker's stock, six people familiar withpreparations for the landmark IPO said.

Subsequent offerings of the government's holdings may beprofitable depending on how investors trade the newly listedstock, the sources said.

But the question of whether taxpayers are ultimately madewhole on GM's $50 billion bailout could be left open for years,the people said.

It could take more than three years for the Treasury tosell down its remaining stake in GM after the IPO, one personsaid. That would push a final accounting into the nextpresidential term.

A decision to price the initial GM shares below the cost totaxpayers would follow the usual Wall Street practice of givingthe first investors in a new stock a discount, but it couldalso help allay investor concern in the face of the slowrecovery of the U.S. economy and flat auto sales.

Preparations for GM's IP0 remain confidential. Both GM andthe U.S. Treasury have declined to comment, citing restrictionsby U.S. securities regulators.

The Obama administration has pledged to exit its investmentin GM as quickly as possible while holding out the prospectthat taxpayers could ultimately be paid back in full.

Treasury spokesman Mark Paustenbach declined to comment. GMspokesman Tom Wilkinson also declined to comment.

GM plans to begin a roadshow for its IPO immediately afterthe Nov. 2 U.S. midterm congressional elections, paving the wayfor a stock debut on Nov. 18, sources have said.

GM in August filed paperwork for an IPO that couldpotentially be worth as much as $20 billion, making it one ofthe biggest IPOs of all time.

The U.S. Securities and Exchange Commission is nowreviewing the automaker's S-1 filing.

Analysts and potential investors have projected a marketvalue for GM of between $50 billion to around $90 billion,based on projections for the automaker's cash flow, comparisonswith rival Ford Motor Co and trading in bonds in the oldGM which are convertible into shares in the new company.

A market value at the high end of that range would be abovethe roughly $70 billion in market capitalization that GM needsto achieve for the U.S. government to break even on its $43billion remaining investment in the automaker.

But IPOs typically price at a discount of 10 percent to 15percent to theoretical fair value to reward investors fortaking a risk on a new issue and pave the way for future stockfloats. In tough market conditions, that discount can be evenlarger.

"You have to sell people on the notion that there is anupside to what they are buying," one of the sources said.

Another of the sources said the discount could be as muchas 20 percent on the GM IPO compared with the U.S. Treasury'sbreak-even point.

Preparations for the GM stock offering remain in the earlystages. A number of the sources cautioned that the size andvalue of the deal and the size of the stake to be sold by theU.S. government have not been determined and will not be setfor weeks.

GOVERNMENT STAKE IN 'GOVERNMENT MOTORS'

The U.S. government pumped $49.5 billion worth of taxpayermoney into the automaker and took nearly 61 percent of itscommon stock.

GM has paid back $6.7 billion in debt to the Treasury andreturned another $700 million in interest and dividends. TheU.S. government also holds $2.1 billion in perpetual preferredshares in the automaker.

That leaves the government with a roughly $40 billioninvestment in the GM common stock that will debut in an IPOalong with a new class of preferred shares that will convertinto common shares under a mandatory provision.

In the days leading up to GM's August S-1 filing,Republican Senator Charles Grassley asked a special TreasuryDepartment watchdog for an analysis of the GM IPO and how muchmoney would be returned to taxpayers.

In its pitch to potential investors, GM will tout itsglobal reach, recent gains in quality and pricing in its homemarket, and its sharply lower cost of operations after its 2009bankruptcy, sources have said.

GM's $1.3 billion second-quarter profit was its biggestsince 2004, when industry-wide U.S. sales were near 17 millionvehicles compared with the 11.5 million sales rate of August.

But GM will have to address investor concern that growth inindustry car sales in the U.S. in the second half of 2010 andinto 2011 will likely be slower than analysts had expected justa few months ago.

At the same time, GM will have to confront a pensionshortfall that remains a liability from its pre-bankruptcyoperations.

GM eliminated about $40 billion in unsecured debt and otherobligations in bankruptcy, but the automaker still needs toaddress a pension shortfall estimated at about $26 billion.

A successful IPO would be a political victory for the Obamaadministration and would help GM distance itself from criticswho dubbed it "Government Motors" after its bailout. (Reporting by Clare Baldwin and Soyoung Kim in New York andKevin Krolicki in Detroit; editing by Carol Bishopric)

Foreign-exchange brokerage FXCM Inc. plans to sell up to an estimated $200 million in an initial public offering.

The online provider of foreign-exchange trading and related services has more than 165,000 retail and institutional customers worldwide. The company, which facilitates paired trades in which customers buy one currency while selling another, earns fees that are added to prices provided by the foreign-exchange market makers and it receives trading revenue based on the volume of transactions it handles.

The industry has boomed despite the turmoil in the financial system, partly because it meets many needs of investors with frayed nerves. It is useful for hedging macroeconomic risk when trading in markets such as credit and even government bonds has been unpredictable.

FXCM's shares are expected to be traded on the New York Stock Exchange under the symbol FXCM.

The company plans to use proceeds from the IPO to buy newly issued holdings units from its current owner, FXCM Holdings LLC. It expects FXCM Holdings to use the funds to increase its capital, fund acquisitions and for general corporate purposes.

In the six months ended June, FXCM reported its profit rose 2.8% to $51.8 million, while total revenue ticked up 1.1% to $173.6 million.

The U.S. IPO market has been rocky lately with many companies cutting their prices and some delaying their offerings.

Copyright © 2010 Dow Jones Newswires

CALGARY, Alberta (Reuters) - Imperial Oil Ltdsaid Friday it is shutting down its 82,000 barrel aday Dartmouth, Nova Scotia, refinery before the onslaught ofHurricane Earl, the first fuel plant on the continent's EastCoast to do so.

Imperial, Canada's second-largest integrated oil producerand refiner, will leave only essential personnel at therefinery during the storm, spokesman Pius Rolheiser said.

"We're currently in the process of a safe and systematicshutdown, Rolheiser said.

The company is taking the measure as a precaution, he said.Earl was downgraded to a Category 1 hurricane Friday as itheaded to New England and Atlantic Canada.

The Canadian Hurricane Centre warned residents in parts ofthe Maritime provinces to be on alert for tropical stormconditions, with winds gusting up to 70 mph (110 km/h). Thestorm was forecast to hit Nova Scotia early Saturday.

Dartmouth is directly across the harbor from Halifax onNova Scotia's southern coast.

Rolheiser said Imperial would begin resuming refineryoperations once it was safe to do so. The outage was notexpected to mean fuel shortages for the company's customers, hesaid.

Irving Oil, which runs Canada's largest refinery, the300,000 bpd plant in Saint John, New Brunswick, said earlierFriday that it was monitoring the storm and making preparationsfor rough weather.

But the company said it did not expect operations to beaffected. (Reporting by Jeffrey Jones; editing by Rob Wilson)

By Jennifer Kwan

TORONTO (Reuters) - Toronto's main stock indexnotched its eighth straight session in the black Friday as astronger than expected U.S. employment report eased fears abouta sputtering recovery.

Toronto followed U.S. equities higher after data showedU.S. nonfarm employment fell less than forecast in August,while private payrolls growth was higher than expected.

Financials, often a play on the health of the economy, ledeight of the TSX's 10 main groups higher with an 1.3 percentadvance. Toronto-Dominion Bank rose 1.7 percent toC$74.40, while Royal Bank of Canada climbed 1 percentto C$52.80. Insurer Manulife surged 2.9 percent toC$13.23.

"Jobs numbers in the United States were better thanexpected. Not great, but still better," said Aaron Fennell,senior market strategist at Lind-Waldock Canada. "I think thatimplies to the market that the recovery is a little bitstronger than otherwise thought."

The Toronto Stock Exchange's S&P/TSX composite index finished the session up 33.83 points, or 0.28percent, at 12,144.92. Earlier, the index hit 12,197.89, itshighest level since May 13.

The index rose 2 percent on the week, its strongest showingsince early July.

The blue chip S&P/TSX 60 index closed 1.99 points,or 0.28 percent, higher at 708.03.

Gold prices edged lower as the U.S. jobs data underminedgold's safe-haven attraction.

"When there's bad news that drives the price of goldhigher. That wasn't a piece of bad news today," said Fennell,referring to the jobs data.

The global gold subsector of the TSX dropped nearly 1percent, weighing on the broader resource-laden materialssector, which fell 0.7 percent. Barrick Gold was off1.1 percent at C$47.09.

Goldcorp fell 3.7 percent to C$44.49, also pressuredby news it intends to buy Argentina-focused gold miner AndeanResources Ltd for C$3.6 billion, trumping a competingoffer from Eldorado Gold Corp.

Andean Resources, the top net gainer on the market, soared45 percent to C$6.98, while Eldorado fell 3 percent toC$19.89.

Potash Corp , down 1.1 percent at C$154.55,remained in the spotlight after a report said Chinese officialshave ordered state companies to meet investment bankers toexplore ways to block BHP Billiton's$39 billion bidfor Potash.

The TSX is closed on Monday for the Labour Day holiday.

($1=$1.04 Canadian) (Reporting by Jennifer Kwan; editing by Peter Galloway)

* Blocking stake, rather than buyout, most likely strategy (Adds comments from IFFCO, legal shares)

By Euan Rocha and Joseph Chaney

TORONTO/HONG KONG (Reuters) - Chinese officials haveordered state companies to meet investment bankers to exploreways to block BHP Billiton's $39 billion bid forPotash Corp, a source with direct knowledge of thematter said.

In response to the directive, Sinochem is holding meetingswith several banks, the source said on Friday, includingCitigroup, HSBC and Morgan Stanley.

The order from Beijing underscores the seriousness withwhich China is taking the potential BHP-Potash tie up and itsimplications for the pricing and supply of the crop nutrient,despite obstacles to launching a successful counter-bid.

"They are being instructed," the source said, adding theorder was issued late last week. "The chairman of Sinochem hasbeen asked to speak to other banks."

A Wall Street Journal report on Thursday said Sinochem hadhired HSBC to advise on options pertaining to Potash Corp.

One option being discussed is the possibility of Sinochemlinking with China's $300 billion sovereign wealth fund CIC,according to a second banking source familiar with the matter.

The most likely scenario is that China will consider buyinga blocking stake, rather than attempt a complete takeover ofPotash Corp, said both sources who were not authorised to speakpublicly due to the sensitive nature of the discussions.

Assuming a consortium pays a 20 percent premium to Potash'smarket price, a 15 percent stake would cost about $8.3billion.

Sinochem and the banks declined to comment. CIC could notimmediately be reached.

BHP CEO Marius Kloppers has poured cold water on thepossibility of a rival bid but another source close to thesituation in Europe said the latest developments are evidenceof solid interest in Potash Corp by third parties.

"This shows there's credibility from Potash Corp, it's notjust hot air. It's not just a go-it-alone defence. There'squite a lot of activity in terms of discussions," said thesource.

Chinese firms have also approached at least one big Canadianpension manager about a rival bid. The disclosure on Thursdayby Alberta Investment Management Corp, which manages some C$70billion ($67 billion) in public sector pension funds, was oneof the first pieces of hard evidence to back rumors that Chinais looking for a way to derail a BHP takeover.

Potash shares in New York closed down 5 cents at $148.50,while BHP's London shares ended the day up 1.8 percent.

OTHER BUYERS WORRIED

BHP's bid for Potash Corp, coupled with consolidation movesin the Russian potash sector, have also raised concerns amongother potash importers.

U.S. Awasthi, the head of India's largest fertilizer makerIFFCO, also expressed concerns about the M&A activity in thepotash sector.

"Everybody forgets one thing," said Awasthi. "Everybodythinks about industrial profit, but everybody forgets about afarmer's profit."

India, one of the world's largest potash importers, has noproduction capabilities of its own and relies on imports. In2008, India imported roughly 6 million tonnes of the nutrient,with about a quarter of its needs being supplied by Canadianproducers.

Earlier this year, IFFCO acquired a 10 percent stake inCalgary-based Americas Petrogas and a 20 percent stakein its GrowMax unit, which owns a potash brine projectcurrently being developed in Peru. However, India is unlikelyto attempt a move to block BHP's takeover bid.

"In India we don't have enough capital in our hands to makea big move of this sort," he said.

CANADIAN CONCERNS

In addition to concerns about job losses and declines inroyalty revenues in the event of a foreign takeover of PotashCorp, Saskatchewan -- the western Canadian province that ishome to Potash Corp -- is especially concerned by a takeoverled by a Chinese state-owned entity.

"We want to be very circumspect about sovereign entitiesfrom customer countries and their involvement in all of this,"said Saskatchewan's Premier Brad Wall in a televisioninterview.

Aside from political concerns, a bid from a Chinesestate-owned entity could face an additional layer of scrutinyunder the Investment Canada Act, notes Steve Szentesi, aVancouver-based lawyer who focuses on competition law.

"The over-arching consideration under the Investment CanadaAct, is whether a transaction is likely to be of net benefit toCanada," said Szentesi. "But in the case of state-ownedenterprises there is an additional layer of scrutiny on top ofthe general net benefit to Canada test." (Additional reporting by Narayanan Somasundaram in Sydney, Michael Flaherty and Denny Thomas in Hong Kong, Tracy Zheng inBeijing and Eric Onstad in London)

Allegiance Bank of North America said Friday it improved second-quarter earnings and extended its stock sale for another month as it continues to turn around the business.

The Private Place Offering engagement, which has been active since May and calls for the bank to sell a minimum of two million shares and up to five people shares of common stock at a $1 a share, is being extended to September 30, from August 30.

Investors are expected to be accredited a price of $10 a share, resulting in gross proceeds of up to $50 million.

“The market for capital continues to be very competitive,” said Allegiance Bank CEO Gregg J. Wagner, who noted the companies will continue to meet with prospective investors during September.

The company has implemented several actions since November of last year to satisfy a consent order issued by the Federal Deposit Insurance Corporation and Commonwealth of Pennsylvania Department of Banking and Insurance designed to improve the bank’s overall performance.

Since then, Allegiance Bank has achieved a tier 1 capital ratio of 5.63%, up from 2.74% a year ago, and not far from the 8% required by the order.

The Pennsylvania-based bank posted Friday a second-quarter net loss of $1.5 million, or 31 cents a share, compared with a loss of $7 million, or $1.46 a share, in the same quarter last year.

The loss was primarily driven by an $800,000 addition to the provision for loan losses and a reduction in net interest income related to its planned reduction in earnings assets.

The bank has reduced its assets over the year by 27.1% to $116.1 million from $159.2 million last year to better align with a decrease in capital during the last year related to its earnings performance.

* Andean shares close up 45 pct on the TSX (Adds Goldcorp CEO comment, analyst comment, share close)

By Narayanan Somasundaram and Julie Gordon

SYDNEY/TORONTO (Reuters) - Goldcorp agreed tobuy Argentina-focused gold miner Andean Resources for C$3.6 billion ($3.4 billion), trumping a competingoffer from fellow Canadian miner Eldorado Gold Corp.

The takeover is the latest in a series of gold-mining dealsthis year, including Australia's Newcrest Mining's$8.4 billion purchase of rival Lihir Gold and Canada's Kinross $7.1 billion stock bid for Red Back Mining.

Near-record prices for the metal are boosting thehunt for reserves and pumping cash into the sector.

Goldcorp said its cash and share offer -- at C$6.50 pershare a 35 percent premium to Andean's last traded price inToronto -- has been approved unanimously by the boards ofdirectors of both companies.

Goldcorp's offer topped an all-share bid from Eldorado worthC$6.36 a share.

"Andean's plan to sell does not come as a surprise. It wasset up to be taken over at some stage. It was a question of howand what price," said Tim Barker, portfolio manager at BTFinancial Group. "The pricing and the premium looks prettyreasonable."

Andean's shares closed up over 45 percent at C$6.98 on theToronto Stock Exchange, while Goldcorp shares were down 3.7percent at C$44.49.

"This is a reasonably strong bid by Goldcorp, though withEldorado still in the picture, there does remain thepossibility that a bidding war may emerge," said ParadigmCapital analyst Don MacLean, in a note to clients.

Gold consumption rose by more than a third in the secondquarter of 2010 and is set to stay strong with India and Chinaproviding the main thrust.

Investment demand is also expected tp be firm asuncertainty about the global economic outlook boosts the appealof gold as a safe haven.

CERRO NEGRO

Goldcorp said Andean's principal asset is its 100-percentowned Cerro Negro Gold project in the southern province ofSanta Cruz in Argentina, which would add to its gold productionpipeline.

With an estimated reserve of 2.54 million ounces, CerroNegro's owner are getting top dollar for the operation.

"With this project you can add ounces year after year afteryear, and therefore, add value for your shareholders," saidGoldcorp Chief Executive Chuck Jeannes in an interview.

He said new drilling at Cerro Negro had indicatedsignificant additional resources.

"Goldcorp has been built on such tip-of-the-icebergacquisitions," Jeannes said. "We wouldn't be surprised to seethe indicated resource double in fairly short order."

Goldcorp has identified Argentina as a key region forinvestment. The company already holds a 37.5 percent stake inAlumbrera, a large gold and copper mine in the northwesternpart of the South American country.

While equity analysts put Andean's fair price at C$6.50 toC$6.60 a share, in line with the Goldcorp offer, they addedKinross, Yamana Gold and AngloGold Ashanti are well-positioned to consider a bid.

Neither Goldcorp nor Eldorado disclosed whether a deal wouldadd or cut earnings, but Goldcorp did say Cerro Negro wouldbegin producing by late 2012.

Maison Placements analyst John Ing expressed some doubt overthe production date, noting that a feasibility study,exploration and more drilling were needed before constructioncould begin.

"Goldcorp is stuck on a growth treadmill," he said. "Andthe reality is that it needs production in order to maintainits growth."

Andean is advised by BMO Capital Markets, Goldcorp by CIBCWorld Markets and Eldorado by GMP Securities.

The mining sector is leading the global M&A activity, whichrecorded $267 billion worth of deals in August, making it thebiggest month since June 2009, Thomson Reuters data showed.

The materials sector has seen a 30 percent rise in dealswith global miner BHP Billiton leading thecharge with a $39 billion offer for Canada's Potash Corp. ($1=$1.04 Canadian) (Additional reporting by Euan Rocha in Toronto, NicolasMisculin in Buenos Aires, Krishna N. Das in Bangalore and NickTrevethan in Singapore; Editing by Valerie Lee, Lincoln Feastand Peter Galloway)

* Dow up 1.2 pct, S&P 500 up 1.3 pct, Nasdaq up 1.5 pct (Updates to close)

By Rodrigo Campos

NEW YORK (Reuters) - Wall Street closed a stellarweek Friday after recent economic data, including astronger-than-expected labor market report, bolstered optimismthat the economy would not fall back into recession.

The S&P 500 gained 3.8 percent for the week, its best ineight, setting the stage for a more bullish mood when marketsre-open Tuesday after the long Labor Day weekend. U.S. Treasurydebt yields have risen from levels reflecting expectations ofanother recession.

Stock sectors sensitive to economic swings like technologyand banks led the week's gains. On Friday, the S&P financialsector index rose 2.2 percent, with Goldman Sachs up 5.4 percent at $147.29 and Janus Capitalup6.6 percent at $10.12.

"Equity markets had priced in the non-trivial probabilityof a double dip, and what you're seeing is that fear pricing iscoming out," said Mike Dueker, head of economics at RussellInvestments in Tacoma, Washington.

U.S. payrolls fell for a third straight month in August,the Labor Department said, but the loss of 54,000 non-farm jobswas far less than the 100,000 expected by economists polled byReuters, and private hiring surprised on the upside.

"Recovery will be slow, but at least reliable, and thatshould add some tailwinds (for stocks) the rest of the year,"Dueker said.

The Dow Jones industrial average shot up 127.83points, or 1.24 percent, to 10,447.93, marking a move back intothe black for the year. The Standard & Poor's 500 Indexgained 14.41 points, or 1.32 percent, to 1,104.51. The NasdaqComposite Index rose 33.74 points, or 1.53 percent, to2,233.75.

The S&P 500 closed above 1,100 for the first time sinceAug. 10. Momentum measures, including the moving averageconvergence-divergence, indicate the benchmark is poised formore gains.

But the upward move faces strong resistance, with the200-day moving average near 1,116. Chartists point to 1,130 askey resistance, tested in June and early August, with bothfailures opening the door to steep declines.

Stocks sold off sharply through August on concerns the U.S.economy could be headed for a double-dip recession. But areport that showed the manufacturing sector grew more thanexpected last month sparked a rally on Wednesday that liftedstocks to their best day in eight weeks.

In addition to the S&P 500's sharp weekly percentage gain,the Dow rose 2.9 percent for the week and the Nasdaq advanced3.7 percent.

Technology stocks outperformed the market this week. ThePHLX semiconductor index has gained 6.9 percent in thepast three days, its best such run since mid-June.

Video game maker Take-Two Interactive Inc jumped7.3 percent to $9.50 a day after its quarterly profit smashedWall Street's expectations of a loss, and it raised itsforecast.

On the downside, Campbell Soup Co dropped 3 percentto $36.21 after posting lower-than-expected quarterly sales andforecasting growth below its long-term target as it grappleswith a weak economy.

About 6.6 billion shares traded on the New York StockExchange, the American Stock Exchange and Nasdaq, far belowlast year's estimated daily average of 9.65 billion.

Advancing stocks outnumbered declining ones on the NYSE bya ratio of about 18 to 5, while on the Nasdaq, about 17 stocksrose for every five that fell. (Reporting by Rodrigo Campos; Additional reporting by EdwardKrudy; Editing by Jan Paschal)

ALPBACH, Austria -(Dow Jones)- The European Investment Bank expects to reduce its 2010 lending by 18% because of lower corporate lending demand, its president told Dow Jones Newswires Friday.

The European Investment Bank, or EIB, expects to extend total credits of EUR65 billion in 2010, down from EUR79 billion in 2009, EIB President Philippe Maystadt said.

Maystadt said that while public sector lending and credits to small and medium-sized enterprises, or SMEs, has been maintained at the 2009 level, corporate lending has decreased due to lower demand.

EIB is the European Union's long-term lending institution, owned by the union's member states, and the world's largest lender. Some 85% of the EIB's loans are extended to recipients within the European Union.

Copyright © 2010 Dow Jones Newswires

WASHINGTON -(Dow Jones)- U.S. banks' commercial and industrial loans increased $200 million to about $1.240 trillion in the week ended Aug. 25, the latest week for which data are available, the Federal Reserve said Friday.

That followed a $4.1 billion decrease the previous week.

Jumbo certificates of deposit rose $7.6 billion to about $1.783 trillion in the latest weekly data, after falling $6.4 billion the previous week. Revolving home equity loans rose $100 million to $594.8 billion after falling $100 million the previous week.

More weekly Fed statistics on the banks' assets and liabilities will be available on the Internet at: www.federalreserve.gov/releases/h8/Current

Copyright © 2010 Dow Jones Newswires

Investors pushed stocks up for the fourth day in a row, sailing into the long weekend on a high note as an encouraging jobs report sent stocks to their best pre-Labor Day week in two decades.

The Dow Jones Industrial Average (DJI) finished up 127.98 points, or 1.24%, to 10447.93, putting the Dow up 2.9% on the week -- its first positive weekly showing since the beginning of August. The Dow also edged back into positive territory for the year.

The market leaped after nonfarm payrolls data showed jobs slowing at half the rate predicted by economists. The Labor Department said the U.S. lost 54,000 jobs last month, about half of what economists had expected and matching the level of revised losses recorded the previous month.

The unemployment rate, calculated using a separate household survey, edged up to 9.6%, as expected, from 9.5% for the previous two months.

"In the last two weeks or so, things have been starting to firm up, and today's jobs numbers really put an exclamation mark on that," said Phil Orlando, equity strategist at Federated Investors. "We're feeling a lot more comfortable about our view, than those thinking about a double dip."

Orlando predicted that stocks would pick up after Labor Day, as vacationing money managers return to an economy whose outlook has improved.

"If you had a bearish bent in the middle of August when you went on vacation, the story seems different today -- it seems constructive," he said.

Not everyone was impressed. Bob Browne, chief investment officer at Northern Trust Global Investments, said the addition of new private-sector jobs is "not enough to absorb new entrants into the work force let alone put the unemployed from the past few years back to work," adding: "We have a long way to go."

But even slowing job losses was "enough to give us a catalyst on a light day going into a long weekend," he said.

The Nasdaq Composite (RIXF) rose 1.53% to 2233.75, up 3.7% on the week. The Standard & Poor's 500-stock index (SPX) tacked on 1.32% to 1104.47, putting its advance for the week at 3.7%.

Goldman Sachs Group (GS) rose 5.4% as financial stocks led the day's and week's gains. Morgan Stanley (MS) gained 3.8%, J.P. Morgan Chase (JPM) added 2.7% and Genworth Financial (GNW) advanced 6%.

Friday's jobs numbers followed recent reports on manufacturing and housing that also came in above expectations, extending a notable reversal from a long string of disappointing data that had driven the Dow's biggest August drop since 2001.

Volume was light, with about 3.6 billion shares changing hands in NYSE composite trading, short of 2010's daily average of about five billion shares.

"The fear is really building towards a sharp movement upwards rather than downwards," said Joe Greco, managing director for Meridian Equity Partners. "Most of the bullets have been used from the sell side, and any strong data is going to fuel the momentum trade and short covering."

The strong start to the month comes as investors have been encouraged that a double-dip recession may be avoided. But the economic recovery still looks weak; data released Friday by the Institute for Supply Management showed a slowing expansion in the U.S. nonmanufacturing sector last month.

The U.S. Dollar Index (DXY), reflecting the U.S. currency against a basket of six others, declined 0.5%. Treasurys slipped, pushing the yield on the 10-year note (UST10Y) up to 2.71%. Crude-oil futures dropped to $74.34 a barrel, while gold futures also slipped.

On the deals front, Goldcorp (GG) slipped 2.3% after the gold miner agreed to acquire all outstanding shares of Andean Resources for $3.4 billion. Andean's principal asset is the Cerro Negro gold project located in Argentina. .

Shares of Take-Two Interactive Software Inc. (TTWO) rallied 10% after the company reported an unexpected quarterly profit and said it expects a fiscal-year profit. .

Tax-preparation company H&R Block Inc. (HRB) climbed 5.8% after reporting a smaller-than-expected loss from continuing operations.

Campbell Soup Co. (CPB) slipped 2.4% after its fiscal fourth-quarter earnings jumped 64% on prior-year write-downs, but revenue at its soup business weakened.

Copyright © 2010 Dow Jones Newswires

LUANDA, Sept 3 (Reuters) - Angola's government will launch acomplete overhaul of its tax regime to improve collection andincrease revenues, Minister of State Carlos Feijo said onFriday.

Feijo said management consultants McKinsey & Co had beenhired to help advise on how to fix a tax regime that has notbeen updated since the end of a civil war in 2002.

Officials in the southern African oil-producing nation oftencomplain they lack the means to ensure taxes are properlycollected from companies operating there.

"We will work with McKinsey to revamp all our fiscal sector.Our goal is to increase our tax revenues," Feijo told a newsconference on Friday.

The move takes place after a slump in oil prices in the pastyear prompted Angola to delay billions in payments toconstruction firms rebuilding the nation after the civil war.Angola turned to the International Monetary Fund for a $1.3billion loan.

Angola vies with Nigeria as Africa's biggest oil producer.It depends on oil for 90 percent of its export revenue. Feijosaid a better tax regime would help lower the nation's externaldebt-to-GDP ratio, which he said stood at 38.7 percent.

Earlier this year, the government hired consulting firmErnst and Young to audit government accounts as well as those ofstate-owned oil firm Sonangol and state-run diamond firmEndiama.

Angola is ranked in the bottom 19 of 180 countries in aTransparency International corruption survey last year.

(Reporting by Henrique Almeida; Editing by Peter Graff)

CHICAGO (Dow Jones) -- Federal Reserve officials are on the lookout in case Wall Street banks move to devise more complex derivatives instruments aimed at circumventing new regulations for the market.

Regulators are concerned that derivatives dealer banks could structure more over-the-counter derivatives to fall outside the definition of "standardized" transactions, which carry new rules for clearing and trading under the Dodd-Frank Act, according to Theo Lubke, a senior vice president with the Federal Reserve Bank of New York.

"If it's viewed as more expensive to trade in that environment versus coming up with a contract that doesn't fit in that environment and is cheaper to trade, the incentive is to do that," Lubke said Friday at an event hosted by the Federal Reserve Bank of Chicago.

A sweeping package of new laws for U.S. markets passed in July requires dealer banks and major traders in off-exchange swap markets to route transactions in "standardized" products through clearinghouses, which hold collateral posted to back up trades and spread out the risk of any one member's failure.

Such standardized products will also be required to be traded on exchanges or new swap execution facilities.

While the measures are intended to reduce the risk to the broader financial system if a major participant goes down, they also are seen making pricing in the market more transparent, thereby reducing the profitability for the dealer banks that dominate activity in the market.

The clearing rules will also require collateral to be posted against the transactions, seen raising the costs for banks and other participants to do business.

That dynamic has regulators on watch that dealers don't create new contracts that do not meet a defined threshold for "standardization," said Lubke Friday.

"We have to make sure the incentives don't push toward using nonclearable transactions," he said.

While the Federal Reserve has yet to see any evidence the market is moving in this direction, the possibility means that regulators must be watchful, Lubke said.

James Hill, managing director of credit trading for Morgan Stanley (MS), downplayed that concern.

Speaking at the same event, Hill said that while actively creating a lack of standardization in derivatives is a "theoretical" risk, it's "not all that practical."

Banks' customers for swap dealers--like manufacturers, hedge funds and insurance companies--have driven the market toward more standardization over the past decade because they want the ability to initiate a trade with one dealer and close it with another, Hill said.

"The notion of de-standardizing is not what clients want," he said.

Copyright © 2010 Dow Jones Newswires

By Jonathan Stempel

NEW YORK (Reuters) - Investors in Gabriel CapitalLP, a so-called feeder fund that funneled money to imprisonedswindler Bernard Madoff, were awarded $12.74 million by a panelof three arbitrators, court records show.

The award to two New Jersey investment funds was disclosedin a filing Thursday with the New York State Supreme Court inManhattan.

The funds asked the court to confirm the award againstGabriel, which was overseen by hedge fund manager Ezra Merkin.

Andrew Levander, who represents Merkin, referred a requestfor comment on the award to another lawyer, Guy Petrillo, whodid not immediately return a call seeking comment.

The investors, Sandalwood Debt Fund A LP and SandalwoodDebt Fund B LP, are based in Roseland, New Jersey, andaccording to regulatory filings require minimum investments of$1 million. Their lawyer, Laurence Orloff, declined tocomment.

Like many Madoff victims, the Sandalwood funds invested infeeder funds such as Gabriel, which transferred money to Madoffto manage.

In April 2009, New York Attorney General Andrew Cuomo fileda civil fraud lawsuit accusing Merkin of steering $2.4 billionof investor money to Madoff without their knowledge.

Cuomo did not accuse Merkin of knowing about Madoff'sestimated $65 billion Ponzi scheme, but contended that Merkinignored red flags, while earning lucrative fees from clients.

The Sandalwood funds accused Gabriel of fraud, breach offiduciary duty and negligent misrepresentation for failing toreveal it was sending money to Madoff.

When Madoff's Ponzi scheme came to light, Gabriel'sinvestment was written down to zero, court papers show.

The arbitration panel did not explain its reasoning for theaward, which includes interest and $112,000 to cover fees.

Merkin also faces a class-action lawsuit by former clientswho also sued BDO USA LLP and affiliates, which audited hisfunds. Mort Zuckerman, the real estate investor, has suedMerkin over about $40 million of Madoff-related losses.

Madoff, 72, pleaded guilty to running his Ponzi scheme inMarch 2009. He is serving a 150-year sentence in a NorthCarolina federal prison.

The case is In re: Arbitration between Sandalwood Debt FundA LP and Sandalwood Debt Fund B LP v. Merkin, New York StateSupreme Court, New York County, No. 651441/2010. (Reporting by Jonathan Stempel in New York; Editing by RichardChang and Matthew Lewis)