Europe

The euro declined for a third day against the dollar amid speculation that a plan for Greece to obtain European Union and International Monetary Fund help in cutting its budget deficit may falter, Bloomberg reported. Europe’s common currency also slid versus the yen as Market News International reported that Greece wants to bypass IMF involvement should it require assistance because the conditions would be too stringent.
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Allied Irish Banks (AIB) and Bank of Ireland (BoI) were asked during crisis talks on the night the Government bank guarantee was introduced in late September 2008 how much they could provide in liquidity to Anglo Irish Bank, according to well-placed sources, The Irish Times reported. During emergency discussions with the Government and senior regulatory officials, both banks consulted their treasury departments shortly after talks began late on Monday, September 29th.
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Wilbur Ross, the billionaire US turnaround specialist, has bought a 21 per cent stake in Sir Richard Branson's Virgin Money for £100 million as the group prepares to make a major assault on the UK banking market, The Scotsman reported. Ross, nicknamed the "King of Bankruptcy", is also prepared to pump in "hundreds of millions" more to fund acquisitions, including Virgin's £2 billion bid for 318 Royal Bank of Scotland branches. Virgin will join Clydesdale Bank owner National Australia Bank and Santander in submitting a bid for the RBS assets ahead of tomorrow's deadline.
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Greece has run out of cash and it is fast running out of the ability to borrow at anything but the most punitive rates. Yet borrow it must, thus putting itself in an ever more precarious position, The Wall Street Journal reported. It is the originator of its difficulties, but, far from helping, those fellow euro-landers it turned to for salvation have merely exacerbated its problems. This became painfully apparent this week as the country's attempts to refinance its maturing debt managed only a grudging response, despite an interest coupon struck at an excruciatingly high 6%.
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Germany and France on Wednesday called for an international bank levy as Wolfgang Schäuble, German finance minister, outlined plans to force his country’s banks to pay €1.2 billion into an insurance fund to cover bail-outs in a future crisis, the Financial Times reported. After a German cabinet meeting attended by Christine Lagarde, French finance minister, Mr Schäuble and his French counterpart called the initiative “a very useful contribution to the international debate” about financial regulation.
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German public-sector bank BayernLB says it lost nearly €2.62 billion ($3.5 billion) last year - a performance blamed largely on losses and expenses related to former Austrian unit Hypo Group Alpe Adria, The Associated Press reported. The 2009 performance was still an improvement on its huge loss of euro5.08 billion the previous year at the height of the financial crisis. BayernLB said Wednesday that it aims for a "positive result" in 2010. The bank said losses, writedowns and other expenses related to HGAA weighed down its results by a total €3.3 billion last year.
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Greek sovereign bonds suffered a sharp sell-off on Tuesday as investor concerns over the country’s financial health flared up again, the Financial Times reported. In spite of mooted support from the European Union and the International Monetary Fund, investors remain concerned that Germany could refuse to provide financial aid if the Greeks fail to meet their deficit reduction targets later in the year. Greece must raise €35 billion ($47 billion) of debt this year to avoid a bail-out. It has sold €18 billion so far.
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Germany's tough conditions for any aid for Greece, which other euro-zone countries were forced to swallow at a European Union leaders' summit last week, signal a broader division that threatens to hamper Europe's ambitions as a global power: Germany has cooled to unity, except on its terms, The Wall Street Journal reported. In the past two years Germany effectively vetoed joint European action to rescue banks and stimulate growth, and rejected euro-zone calls for more teamwork on economic policy.
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The euro zone's decision to include the International Monetary Fund in any Greek rescue plan extends the Fund's influence to a large swath of the world economy—and gives a political boost to its managing director, The Wall Street Journal reported. Over the past two years, the IMF has worked with the European Union to bail out EU members, including Latvia and Hungary. Now it is clear that the IMF mandate reaches also to Portugal, Spain and other troubled members of the 16-nation euro zone, said Domenico Lombardi, a Brookings Institution expert on the IMF.
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Barclays Bank last week appointed a receiver over assets of Marumba Properties, a Dublin company that was behind plans to revamp the Finglas Shopping Centre in north Dublin, The Post reported. Acting on foot of a 2007 charge registered against the company’s assets, the bank installed David Carson, an accountant with Deloitte, as receiver to the company. Marumba Properties was planning to develop Finglas Village, a proposed development that was to include 160 apartments and a retail development. However, construction work has yet to begin on the site.
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