Business this week

American International Group became the latest big financial outfit to ditch its chief executive. Martin Sullivan had been in the job for three years, as the insurer became mired in regulatory probes and racked up some $30 billion in mortgage-related writedowns, by far the largest amount for an American financial company, excluding the banks. Mr Sullivan's replacement is Bob Willumstad, AIG's chairman (a position he retains), and a former high-flyer at Citigroup. See article

There was praise for Goldman Sachs's plan to buy the assets of a $7 billion structured investment vehicle that collapsed last August. The SIV had been managed by Cheyne Capital, a hedge fund based in London; investors viewed the restructuring of its portfolio and sale to Goldman as a sign that the credit crisis may be bottoming out. Meanwhile, the investment bank continued to fare better than its rivals, reporting that net profit for the second quarter had fallen by just 11% compared with a year earlier. See article

The Bank of England announced that Sir John Gieve would step down early from his job as deputy governor, in which he is responsible for financial stability. Sir John came under pressure from some City bankers and opposition politicians during the Northern Rock fiasco.

Family fortunes

The proposal by India's Reliance Communications to combine with South Africa's MTN suffered a setback, with the eruption of a simmering feud between Anil and Mukesh Ambani, two of India's richest men. The brothers fell out after their father's death, eventually splitting his Reliance group of companies. Anil heads Reliance Communications and crafted the terms of a deal with MTN, which includes swapping a majority stake in his company. But Mukesh is claiming first refusal in any transfer of his brother's interest.

The congressional agency that investigates government spending in America criticised the air force's procedures for awarding a controversial $40 billion contract for new flying tankers. The contract was eventually given to the KC-30, a joint effort from Northrop Grumman and Europe's EADS, upsetting Boeing, which had been tipped to win the deal. The issue is likely to become politicised. John McCain supports the air force's decision as commercially sound; Barack Obama thinks the contracting process should be reopened. See article

An old enemy

With inflation picking up sharply in the euro area and Britain, and resuming its ascent in America, policymakers debated what to do about rising prices. A meeting of G8 finance ministers acknowledged the threat to growth from soaring energy and food prices, but did not offer any proposals. With housing markets also slowing down in America and Britain, all eyes now turn to the decisions central bankers in both countries will take on interest rates.

Retail sales in Britain jumped by 3.5% in May fed by shoppers buying clothing in a spell of unseasonably warm weather. This may indicate that consumers are more resilient than economists assume.

Food manufacturers in Mexico acceded to government requests to freeze prices on more than 150 staple products until the end of the year in an effort to curb inflation.

The price of corn touched record highs after flooding in America's Midwest. Wheat prices also climbed, amid speculation that farmers would now have to replace lost corn by buying more wheat for animal feed.

After reporting its first quarterly loss in 11 years, FedEx gave a gloomy outlook for its business for the rest of year. The high oil price and a cooling American economy will affect the high end of its shipping business.

InBev tried to press its $46 billion offer for Anheuser-Busch by urging it to start negotiations. The Belgian brewer also responded to speculation that Anheuser was engineering a merger with a Mexican counterpart, by giving warning that its unsolicited bid was for the present business. Meanwhile, politicians from Missouri, Anheuser's home state, came out against the deal, with one Democratic senator calling opposition to InBev's offer “patriotic”. See article

The same old tune

Global music sales took another tumble last year according to the IFPI, which represents the recording industry. A 34% increase in music sold online did little to compensate for the 13% drop in sales of CDs and music DVDs, which account for the bulk of the market. A report from PricewaterhouseCoopers forecast that spending on all forms of recorded music will continue to decline as youngsters turn to other outlets.