THE NEWS WRAP: Queensland Government could face claims from flood-ravaged businesses

The US could still lose its AAA credit rating, even if, as expected, Congress passes a deal struck between party leaders to avoid a debt default.

Analysts have predicted that the US may need to cut more than the $2.4 trillion planned over the next 10 years to maintain its rating. A downgrade could cost it an extra $100 billion a year in interest payments.

Queensland Government could face flood claims

The Queensland Government could face compensation claims from businesses damaged by the state’s widespread floods earlier this year.

An inquiry into the floods found that the operator of the Wivenhoe Dam “breached” the official manual on the release of water into the river system.

The finding opens up the possibility of legal action against the State Government, which owns the dam. More than 17,000 homes and businesses were inundated in the January floods, costing around $5 billion in damage.

Banking regulator warns over mortgages

Australia’s banking regulator has warned bank boards over mortgage lending standards, stressing the need for appropriate pricing and other risk criteria.

In a letter to chairmen, the Australian Prudential Regulation Authority said it was concerned that lower overall growth in mortgage lending has led to overly-aggressive competition among lenders.

Overnight

The Dow Jones Industrial Average was down 10.75 points to 12,132.49. The Australian dollar rallied to 110.55 US cents.