NEW YORK — Under pressure from investors to contain burgeoning costs, Citigroup Inc., the nation's largest financial institution, announced that it will eliminate about 17,000 jobs, shift 9,500 positions to "lower cost locations" and consolidate some corporate operations.

The steps — which are expected to shave more than $2 billion from the bank's operating costs this year alone — also should result in faster service for consumers and businesses, Citi's chief operating officer, Robert Druskin, said Wednesday.

The 17,000 job cuts amount to about 5 percent of the bank's 327,000-strong workforce.

Druskin led the structural expense review, which was aimed at reducing costs at the New York-headquartered bank and improving profit.

Citigroup executives have been under pressure from analysts and a number of investors, including Saudi Arabian Prince Alwaleed bin Talal, Citigroup's biggest individual shareholder, to improve performance.

SETTLEMENT REACHED WITH STUDENT LOAN PROVIDER

NEW YORK — The nation's largest student loan provider will stop offering perks to college employees as part of a settlement announced Wednesday in a widening probe of the student loan industry.

SLM Corp., commonly known as Sallie Mae, also agreed to pay $2 million into a fund to educate students and parents about the financial aid industry, and it will adopt a code of conduct created by New York Attorney General Andrew Cuomo, who is heading the probe.

Cuomo said the expanding investigation of the $85 billion student loan industry has found numerous arrangements that benefited schools and lenders at the expense of students. Investigators say lenders have provided all-expense-paid trips to exotic locations for college financial aid officers who then directed students to the lenders.

Sallie Mae CEO Tim Fitzpatrick said in a statement Wednesday, "We are pleased that Attorney General Cuomo has recognized Sallie Mae's leadership in the student loan industry and our ethical market practices with students and schools."

Investigators found that many colleges have established "preferred lender" lists and entered into revenue sharing and other financial arrangements with those lenders.

FED MINUTES REVEAL INFLATION WORRIES

WASHINGTON — Federal Reserve policymakers were unanimous in the view last month that inflation, not economic weakness, was their major worry.

Minutes released Wednesday of their private discussions showed that Fed Chairman Ben Bernanke and his colleagues even discussed the possibility that future increases in interest rates might be needed to combat higher inflation.

Release of the minutes pushed stocks lower Wednesday as investors grew more pessimistic about the chances of any quick rate cuts to rescue the sluggish economy.

The Dow Jones industrial average finished the day down 89.23 points at 12,484.23, based on preliminary calculations.

The Fed had kept interest rates unchanged at the conclusion of their discussions on March 21. But policymakers changed the wording of their statement in such as way that financial markets believed the Fed might lower rates in the future if the economy weakened further.

That view led to a sharp rally on March 21. But Bernanke later told Congress the Fed had not changed its view, which is tilted toward greater worries about inflation.

FED CHIEF BACKS CURRENT SYSTEM OF HEDGE FUND

WASHINGTON — The current market-based system is the best way to regulate the trillion-dollar hedge fund industry although improvements can be made, Federal Reserve Chairman Ben Bernanke said Wednesday.

Bernanke, speaking to a conference on global economics in New York City, said that the current system is superior to increased government regulation. That view is at odds with critics who say large failures in recent years highlight the need for greater supervision.

Bernanke noted that the collapse of a Connecticut hedge fund, Long-Term Capital Management, came during a period of severe financial stress in 1998.

He said Congress correctly rejected suggestions after that failure to impose greater government regulations. He said in the last 10 years the ways investors have to manage risks "have become considerably more sophisticated."

Bernanke did not mention in his speech last fall's collapse of another hedge fund, Amaranth Advisors, which critics contend shows the need for greater government oversight.

GAS AND OIL PRICES JUMP

NEW YORK — Gasoline and oil prices rose Wednesday after the U.S. government reported a steeper-than-expected decline in gasoline inventories.

Total U.S. gasoline stockpiles sank by 5.5 million barrels last week to 199.7 million barrels, according to the U.S. Energy Information Administration. Analysts had been expecting just a 1.3 million barrel decline, according to a Dow Jones Newswire survey.

Energy Information said gasoline demand has been strong recently, averaging nearly 9.4 million barrels per day over the past four weeks, or 2.5 percent higher than the year-ago period.

Several gasoline-making units were offline for routine seasonal work, putting a crimp in production, said Citigroup Global Markets energy analyst Tim Evans. Production dropped 242,000 barrels per day from the prior week to 8.5 million barrels daily.

Looking ahead, drivers can take some reassurance that better operating rates at refineries and expected increases in production should help gasoline supplies.

WORLD ECONOMY PROJECTED TO GROW 4.9%

WASHINGTON — The global economy should turn in an energetic performance this year, even though its biggest player, the United States, is expected to experience its weakest growth in five years, according to a new International Monetary Fund forecast.

In its latest World Economic Outlook released Wednesday, the IMF is projecting the world economy to grow by 4.9 percent this year and next. While that would be a moderation from last year's 5.4 percent advance, it would still represent a remarkably healthy showing, analysts say.

The U.S. economy is expected to grow by 2.2 percent this year, which would be the slowest since 2002, when it was recovering from a recession. Last year, the U.S. economy managed to expand by 3.3 percent, a two-year high even as it coped with a painful housing slump.

In its fresh forecast, the IMF downgraded its projection for U.S. growth this year to the current 2.2 percent gain, from a 2.9 percent increase that had been forecast in September.

The United States has been dealing with strain from a housing market that started to crumble last year after a five-year boom.

BLACKBERRY SEES SALES, PROFIT JUMP

TORONTO — BlackBerry maker Research In Motion Ltd. said Wednesday its fiscal fourth-quarter profit soared as sales jumped 66 percent, according to preliminary results pending a restatement of past finances.

The Waterloo, Ontario-based company also said it is now under a formal Securities and Exchange Commission investigation over its stock option granting practices. The company's shares plunged nearly 7 percent in after-hours electronic trading.

For the quarter ended March 3, the company earned $187.9 million, or 99 cents per share, up from $18.4 million, or 10 cents per share, during the same period in the previous year.