INTERNATIONAL

BLACK AND RADLER RESIGN FROM RAVELSTON CORPORATION, COURT TOLD

Tycoon Conrad Black and longtime business partner David Radler have resigned as officers and directors of Ravelston Corporation, the private holding company behind the troubled Hollinger media empire.

A lawyer for Ravelston told Ontario Superior Court about the resignations yesterday as the firm sought bankruptcy-court protection from creditors.

According to an affidavit filed by Mr. Black’s longtime deputy, Peter White, Ravelston Corporation and subsidiary Ravelston Management are seeking bankruptcy protection because they are insolvent and faced with “an immediate financial crisis.”

Mr. White said Ravelston has been drained of cash because it no longer receives multimillion-dollar management fees from its subsidiaries Hollinger Incorporated and Chicago-based newspaper operator Hollinger International Incorporated.

Most of the fees were halted in 2003 after a special committee of Hollinger International directors alleged that Mr. Black and a team of executives had improperly received more than $32 million in payments.

Since then, the executives have faced additional allegations of securities fraud by American regulators, and they are also under criminal investigation by the Justice Department. Hollinger International is a minority investor in The New York Sun.

– Associated Press

ECONOMY

CONSUMER PRICES FAN INFLATION WORRIES

American consumer prices jumped last month, suggesting Federal Reserve policy-makers still have work to do to keep inflation from flaring. Costs excluding fuel and food showed the biggest increase in more than two years.

The consumer price index increased a larger-than-expected 0.6% in March after a 0.4% rise, the Labor Department said yesterday in Washington. The gauge excluding energy and food rose 0.4%, twice the median forecast in a Bloomberg News survey and the biggest increase since August 2002.

Yesterday’s data, which followed a report Tuesday showing tame core producer prices, suggest that airlines, hotels, and clothing retailers are passing along higher costs of energy and other commodities. “Many” of the Fed’s 12 districts reported increasing price pressures and “most” said companies had some success raising consumer prices, the central bank said today.

“It’s clear that inflation risks have risen,” said the chief American fixed-income economist at Morgan Stanley in New York, David Greenlaw, who correctly forecast the rise in consumer prices. “The Fed must weigh this against the recent signs of some moderation in economic activity.”

– Bloomberg News

GEITHNER: FINANCIAL CONSOLIDATION THREATENS DIRE CONSEQUENCES

Though America’s financial system is stronger and more stable than it has been in recent years, consolidation has resulted in the likelihood that the failure of one of its financial institutions would have a far more devastating impact on the economy, said the chief executive of the Federal Reserve Bank of New York, Timothy Geithner, in remarks to the Bond Market Association yesterday.

“Consolidation has produced a system in which a smaller number of financial institutions, banks and non-banks, account for a substantially larger share of financial intermediation,” he said. “Therefore, while the probability of a major crisis induced by the financial failure of a major institution may be lower, the damage associated with such an event could be higher.”

The increased role of hedge funds in America’s financial system also “complicates the challenge of risk management,” he said.

“Although hedge funds help improve the efficiency of our system and may also contribute to greater stability over time by absorbing risks that other institutions would not absorb, they may also introduce some uncertainty into market dynamics in conditions of stress,” he said.

– Staff Reporter of The Sun