OVERSEAS

JAPAN LAWMAKERS OKAY POSTAL REFORM; WOULD CREATE WORLD’S NO. 1 BANK

TOKYO – Japan’s lower house of Parliament narrowly approved legislation to create the world’s largest bank – surpassing both America’s Citigroup and a Japanese contender expected to briefly hold the title after a merger.

The source of this great wealth? The country’s post offices.

The bank will emerge from the privatization of Japan’s sprawling postal service, which offers savings accounts popular with a population that loves to save. State run Japan Post controls $3 trillion in savings and insurance deposits. Under the legislation, it would be privatized by 2017, after a series of intermittent reforms.

Excluding its insurance accounts, Japan Post boasts savings deposits alone of $1.9 trillion – some three times those of Mitsubishi Tokyo Financial Group, which at $600 billion is Japan’s biggest private holder of deposits.

– Associated Press

NEW YORK

MORGAN STANLEY ALIGNS JOHN MACK’S PAY WITH RIVAL CEOS

Morgan Stanley signed its newly appointed chairman and chief executive, John Mack, to a five-year contract that promises he’ll make about as much as his Wall Street counterparts and pays him a one-time bonus of $27 million.

Mr. Mack, 60, will get a minimum salary of $775,000. His total compensation for the next two years will be no less than the average pay received by the CEOs at Goldman Sachs Group, Merrill Lynch & Company, Lehman Brothers Holdings, and Bear Stearns Companies, Morgan Stanley said in a regulatory filing yesterday. If the average is greater than $25 million, Mr. Mack will make at least that much.

– Bloomberg News

DHL AGREES TO END CIGARETTE DELIVERIES TO INDIVIDUALS

ALBANY – One of the world’s largest package delivery companies will stop delivering cigarettes to individual consumers nationwide under an agreement with New York Attorney General Eliot Spitzer.

Mr. Spitzer said DHL is the first major shipping company to agree to the ban. The agreement with Mr. Spitzer and the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives is aimed at ending a common method for youths to obtain cigarettes, which can’t legally be sold to people under 18. In yesterday’s agreement, DHL cuts off another route for the Internet cigarette sales.

-Associated Press

AIG NAMES FORMER SEC CHAIRMAN LEVITT AS BOARD ADVISER

AIG named a former SEC chairman, Arthur Levitt, as a special adviser to its board, seeking to restore investor confidence eroded by investigations of improper accounting.

Mr. Levitt, 74, will help AIG choose new directors and advise on structure and governance issues, the New York-based company said yesterday in a statement. Mr. Levitt left his SEC post in 2001 after making financial fraud the agency’s chief enforcement priority for the last two years of his more than seven-year tenure.

– Bloomberg News