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amid local reports of the PBOC’smove, led by banks and other fi-nancial firms.

The latest measures are signifi-cant but fall short of the 2008stimulus plan inwhich the Chinesecentral government spent $586 bil-lion to lessen the impact of the fi-nancial crisis.

China’s economy has been los-ing steam due to a number of fac-tors, including a slumping property

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2014—for the first time since the1998 Asian financial crisis.

Still, the central bank refrainedfrom making a broader easingmove for fear that such stepswould send themarket too stronga signal about easing monetarypolicy.

“It’s a big help for the banksand, at the same time, the centralbank canmaintain its neutralmon-etary stance,” said one of the bank-ing officials.

The shift provided a boost to lo-cal stocks. Shanghai’s benchmarkstock index rose 3.4% on Thursday

additional room to lend, accordingto banking officials familiar withthe matter.

Analysts estimate the move isroughly equivalent to injecting 1.5trillion yuan, or about $242 billion,into the banking system. PBOC of-ficials didn’t respond to requestsfor comment.

Themove comes as the Chineseeconomy continues to struggle, de-spite a series of stimulusmeasurestaken in previous months. Econo-mists warn that the Chinese gov-ernment may miss its annualgrowth target—set at 7.5% for

BEIJING—China is relaxing amajor restraint on banks’ ability touse deposits tomake loans, amoveaimed at kick-starting growth inthe world’s second-largest econ-omy.

At a closed-door meeting onWednesday, officials at the coun-try’s central bank, the People’sBank of China, told representativesfrom two dozen banks and other fi-nancial firms that it would allowthem to include more money intheir deposit bases, giving them

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TODAY IN MANSION

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CONTENTSArt...................................... D2Corporate News B2,3,5Global Finance............ C3Heard on the Street C8In the Markets........... C4Movies.................... D4,5,8

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What’sNews

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World-WidenThe Obama administrationis concerned about copycats af-ter the Sony cyberattack. About300 theaters screened the com-edy about the killing of NorthKorea’s leader that apparentlytriggered the hacking. A1, B1n Nearly two million fewerAmericans are receiving job-less benefits than a year ago,due in part to the end of an ex-tended-benefits program. A2nRussia’s finance ministerdeclared the currency crisisover as the ruble firmed to athree-week high Thursday. A6n Ukraine and rebels re-ported scant progress to-ward a cease-fire after thefirst high-level talks betweenthe two sides in months. A6n The NSA released heavilyredacted reports detailing itsemployees’ violations of indi-vidual Americans’ privacy. A4n Jordan launched an effort towin the release of a pilot heldby Islamic State in Syria andreaffirmed its support for thecoalition fighting the group. A6n The Saudi government un-veiled a budget that signaledcontinued high spending de-spite the drop in oil prices. A6nA lab technicianworking atthe CDC in Atlanta may havebeen exposed to the Ebola vi-rus, federal officials said. A2n Indonesia’s Aceh province,which marks the 10th anniver-sary of a devastating tsunami,has embraced Shariah law. A8nPope Francis delivered aChristmas speech tempered byanguish for children who suffermaltreatment or violence. A9

i i i

China is relaxing lendingrules for banks in a bid to

spur growth, a move estimatedto add the equivalent of $242billion to the banking system.A1nU.S. retailers expect to re-port the best holiday salesgrowth in three years, helpedby an expanding economyand falling gasoline prices. B1n S&P is nearing a settlementwith regulators over how itgraded real estate bonds thatcould involve a suspension. C1n The SEC faulted thecredit-rating industry for avariety of lapses in adheringto the agency’s rules. C2n Citigroup is selling its Jap-anese retail unit to SumitomoMitsui for between $250 mil-lion and $417 million. C1nThe CFTC finedMF Global’sparent $100 million as part ofa settlement stemming fromthe brokerage’s collapse. C2n The Dow edged up 6.04points Wednesday to a record18030.21, as a rally sparkedby the Fed continued. C4n Japanese government bondyields sank to their lowest-everlevel Thursday, showing theBOJ’s sway over the market. C4nAir-bag maker Takata,which has been at the centerof vehicle recalls, said its pres-ident is stepping down. B3n Chinese auto dealers aresitting on their highest in-ventories of unsold cars inalmost 2½ years. B3n South Korean prosecutorscharged Uber’s CEO and hisKorean partners with violatinga public-transport law. B4

Business&Finance

John and David Mkhitarianfound a soft spot in Medicare’sdefenses against fraud: Inspec-tors aren’t required to visit med-ical providers deemed to presenta lower risk of fraud and abuse.

So the cousins used exchangestudents to create some 70 bo-gus laboratories, clinics and phy-sician practices, then enrolledthe companies in the programwith the stolen identities of doc-tors, prosecutors assert. Medi-care paid out $3.3 million overabout two years.

Both Mkhitarians pleadedguilty to health-care fraud con-spiracy. David was sentenced inSeptember to seven months inprison, and John will be sen-tenced in February.

Their case illustrates a vulner-ability in the nearly $600 billiontaxpayer-funded program: Vet-ting of new providers often is in-adequate. An inspection of theMkhitarians’ companies mighthave stopped the scheme beforeit started.

Shortcomings in Medicare’sefforts to stop fraud, abuse andwaste have come into focus sinceApril, when the Centers forMedicare and Medicaid Services,the agency that runs the pro-gram, made public medical-pro-vider billing records for the firsttime since 1979. The disclosurefollowed a legal effort by TheWall Street Journal.

CMSmust strike a delicate bal-ance: reducing fraud and abuse asmuch as possible without restrict-ing access to medical care for the

Pleaseturntothenextpage

BY JOHN CARREYROUAND CHRISTOPHER S. STEWART

SprawlingMedicareStruggles toFight Fraud

The Obama administration isincreasingly concerned about awave of digital extortion copy-cats in the aftermath of the cy-berattack on Sony Pictures En-tertainment, as the governmentand companies try to navigateunfamiliar territory to fortify de-fenses against further breaches.

About 300 theaters on Thurs-day screened the movie that ap-parently triggered the hackingattack, a comedy about the as-sassination of North Koreanleader Kim Jong Un, after Sonyreversed its initial decision toacquiesce to hacker demandsthat the film be shelved.

Still, the threat to Sony—al-legedly by North Korea—marked“a real crossing of a threshold”in cybersecurity, given its un-usually destructive and coercivenature, said Michael Daniel, thecybersecurity coordinator forthe White House National Secu-rity Council.

The administration’s concernsare being driven by severalemerging trends: the linking tothe Internet of everything fromelectric grids to home thermo-stats, which creates a new arrayof areas vulnerable to attack; theincreased sophistication and ef-fectiveness of hackers; and anew willingness by adversarieswith little to lose in using cyber-space to achieve maximum de-struction.

Yet a number of issues compli-cate efforts to fortify and defendAmerican companies againsthackers. The government’s ap-proach is largely piecemeal, oftenconfounding intelligence sharingand making it difficult to coordi-nate a response. Businesses,

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BY CAROL E. LEEAND DANNY YADRON

U.S. PutsNewFocusOn CyberDefenses

PHILADELPHIA—Lois Jonessat dejected outside Courtroom504 of the Juanita Kidd StoutCenter for Criminal Justice.

A judge had just scrubbed herrecord of several decades-oldcharges that didn’t lead to con-victions, and she thanked peoplein the courtroom. But then the64-year-old’s lawyer told her thecourt had left standing assaultconvictions from 1985 stemmingfrom a fistfight with a relative,for which she got a year’s pro-bation.

The convictions recently ledan adoption-services agency torescind a job offer, Ms. Jonessaid, leaving her to take oddjobs such as writing obituariesto bring in cash. Her attorney

told her the matter likelywouldn’t come off her record foryears, if ever.

It “has turned into a 30-yearsentence,” Ms. Jones said tear-fully. “I’m embarrassed. I’m acriminal and I can’t get a job.”

It’s far easier to get a crimi-nal record than to eradicate one.Nearly 80 million Americanshave entries in a criminal-re-cords file maintained by theFederal Bureau of Investigation,a product of beefed-up policingand tough-on-crime laws.Through online databases, therecords are available to employ-ers, landlords, college admis-sions personnel and loan offic-ers. They thus can impose aburden long after any sentencehas been served, and affect thelives of people who were ar-

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BY GARY FIELDSAND JOHN R. EMSHWILLER

FIGHTING TO FORGET

Long After Arrests,Records Live On

BY LINGLING WEI

China Tries to Spur LendingRelaxedLoanRulesEstimated toAdd$242Billion toBankingSystem inBid forGrowth

As Tempestuous 2014 Wanes, a Bold Plunge Toward the New Year

Getty

Images

With a $1.1 million RM 039, apilot can calculate fuel burn,flight times and ground speed.The titanium-encased assemblyof gears and springs can convertgallons to liters and pounds tokilograms, and even measure al-titude.

It also tells the time.With nearly 1,000 parts, the

engineering marvel marks a highpoint in one of chronography’smost demanding domains: avia-tor watches. The timepiece, lessthan a centimeter thick and offi-cially called the Tourbillon RM

039 Aviation E6-B Flyback, han-dles almost all the calculationsdone by hand for decades usingan aviator’s slide rule.

“It is the perfect instrumentfor facing the challenges thatconfront pilots during flights,”says a brochure from producerRichard Mille SA.

Just don’t expect to see a pi-lot wearing one.

“The market isn’t specificallypilots,” says company spokes-woman Caroline Samson.

Price isn’t the issue. A privatejet isn’t cheap, either. The thingis, few aviators need an aviatorwatch.

“In all my years, I’venever, ever seen anyoneuse a watch to do a cal-culation,” says retiredBritish pilot NigelChampness, who flew inthe Royal Air Force andcommercially for 47years. “The closest Icame to a pilot’s watchwas a steam-driven RAFone.”

To the mysteriouswonders of flight, addthis: Just as the needaviators have forwatches took a nose dive, theambition of aviator watches

soared.Ever since jeweler

Louis Cartier in 1904helped his aviator friendAlberto Santos-Dumontby creating one of thefirst men’s wristwatchesof any kind, pilots haveworn chronographs. To-day, though, strato-spherically expensiveaviator wristwatches areusually on the arms ofarmchair pilots and inthe dreams of aspiringaviators.

“When I was in high schoolPleaseturntopageA10

BY DANIEL MICHAELS

Flights of Fancy: Aviator Buffs Yearn for Watches, but Few Pilots Use Themi i i

Jet Setters Covet Costly Timepieces for Air of High-Tech Machismo; the ‘Top Gun’ Watch

Cartier Santos

YULE TIDE: As people around the world celebrated Christmas through a multitude of hallowed traditions, a Santa did his chilly part by leaping intothe sea on Thursday to swim the harbor in the Barcelona Traditional Christmas Swimming Cup, an event launched in 1908.

Faces of the Health-Care Law

IMPACT: The Wall Street Journal chronicled how the health-care lawaffected the lives of 10 people over the past year, from doctor toworking mother to insurance broker. See how the Affordable Care Acthas helped, and what it has cost. A5 and WSJ.com/healthlaw

Antigraft drive stirs ripples.... A9 Unsold autos pile up in China.. B3 Crowds cheer film’s release.... B1

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