EU countries broke a deadlock in talks to crack down on the derivatives market, as France and Britain resolved a turf war over how much say a pan-European watchdog can have over national markets, diplomatic sources said.

The breakthrough which came at the meeting of EU finance ministers yesterday (24 January) means member states can move ahead to negotiate with the European Parliament on a final joint text as early as next week in a bid to comply with a globally agreed December deadline for the new rules.

EU regulators have tried to forge rules to drive derivatives on to exchanges since September 2010, but talks have been hampered by a British and French impasse over which regulator has ultimate say - the European Securities and Markets Authority (ESMA) or the national authority.

Finance ministers agreed that the EU's 27 national regulators can overturn the decision to allow a clearing house to operate in a national market by a two-thirds majority.

(Reuters) - The Federal Reserve took the historic step on Wednesday of setting an inflation target, of 2 percent, a victory for Chairman Ben Bernanke that brings the Fed in line with many of the world's other major central banks.

The U.S. central bank, in its first ever "longer-run goals and policy strategy" statement, said it was not appropriate to adopt a fixed goal for employment, however, because the labor market is not largely determined by monetary factors.

The Fed said the 2 percent target - measured by the annual change in the price index for personal consumption expenditures - is the most consistent over the long run with its mandate.

"Communicating this inflation goal clearly to the public helps keep longer-term inflation expectations firmly anchored, thereby fostering price stability and moderate long-term interest rates and enhancing the committee's ability to promote maximum employment in the face of significant economic disturbances," the Fed said.

"It's an uncomfortable feeling to realize that everything is going up except your income," said the 74-year-old from Galloway, New Jersey.

Rising home and car insurance costs have forced her to dip into savings which have been earning less than 1.0 percent.

That isn't likely to change for some years.

The Federal Reserve said on Wednesday that it is likely to keep its key interest rate near zero until late 2014. That would make more than five years of rock-bottom rates.

For Smith and other pensioners struggling to cope with inflation higher than the rate of interest they earn on their savings, all of this amounts to, as she puts it, "being punished" for being prudent.

She is a casualty of the Fed's strategy to keep rates low in an attempt to generate the economic growth needed to lower the nation's jobless rate. Low borrowing costs also prevent the U.S. federal government's debt burden from getting even further out of control.

The same could be said for the policies of central banks in other developed nations, including the European Union.

(Reuters) - Japan's first annual trade deficit in more than 30 years calls into question how much longer the country can rely on exports to help finance a huge public debt without having to turn to fickle foreign investors.

The aftermath of the March earthquake raised fuel import costs while slowing global growth and the yen's strength hit exports, data released on Wednesday showed, swinging the 2011 trade balance into deficit.

Few analysts expect Japan to immediately run a deficit in the current account, which includes trade and returns on the country's huge portfolio of investments abroad. A steady inflow of profits and capital gains from overseas still outweighs the trade deficit.

MADRID - Mexican state oil monopoly Petroleos Mexicanos and Repsol-YPF agreed Wednesday to negotiate an alliance that would require the former's stake in the Spanish oil major to fall within a range of between 5 percent and 10 percent, the companies said.

MercoPress: Brazil posted a record-high current account deficit in 2011 on rising profit remittances by multinational companies and massive spending abroad by Brazilian tourists, but the deficit was more than covered by another record, this time for foreign direct investment, the central bank said Tuesday.

Bloomberg: Ecuador received a loan commitment from China last month for at least $1 billion, helping finance a budget deficit that's projected to reach $4.23 billion this year, central bank President Pedro Delgado said.

MercoPress: Germany's BMW Ag., the world's largest luxury carmaker plans to build cars in the Brazilian state of Santa Catarina from 2014 reports Automobilewoche.

When the New York City banker James Brown tallied his wealth in 1842, he had to look far below Wall Street to trace its origins. His investments in the American South exceeded $1.5 million, a quarter of which was directly bound up in the ownership of slave plantations.

Brown was among the world's most powerful dealers in raw cotton, and his family's firm, Brown Brothers & Co., served as one of the most important sources of capital and foreign exchange to the U.S. economy. Still, no small amount of his time was devoted to managing slaves from the study of his Leonard Street brownstone in Lower Manhattan.

Brown was hardly unusual among the capitalists of the North. Nicholas Biddle's United States Bank of Philadelphia funded banks in Mississippi to promote the expansion of plantation lands. Biddle recognized that slave-grown cotton was the only thing made in the U.S. that had the capacity to bring gold and silver into the vaults of the nation's banks. Likewise, the architects of New England's industrial revolution watched the price of cotton with rapt attention, for their textile mills would have been silent without the labor of slaves on distant plantations.