Treasury Minister Danny Alexander will set out new rules on Monday to push ministries to tighten their grip on spending at a time of deep public cuts aimed at wiping out the country's huge budget deficit within five years, Reuters reported. Under the new rules, government departments will be asked to identify 5 percent of their annual budget to cover unexpected costs - in a bid to discourage them from asking for more money from central government when emergencies arise.

The housing market slump in the Netherlands is causing headaches for the country's banks, which were just on their way to recovering from the financial crisis in 2008 and could now face rising losses and tighter funding conditions, The Wall Street Journal reported. The Dutch government is expected to wrap up negotiations this week on more austerity measures to bring its budget deficit in line with European Union requirements in 2013. In addition to tax increases and spending cuts, it will likely take a first step in addressing the huge mortgage debt in the Netherlands.

Barclays said Chief Executive Bob Diamond will tie half of his long-term bonus awards to the U.K. bank's future profitability, as the lender looks to quell shareholder anger over pay ahead of its annual general meeting, The Wall Street Journal reported. Mr. Diamond and Finance Director Chris Lucas will forgo 50% of their deferred bonuses, which are paid out over three years, until the bank's return on equity exceeds its cost of equity, Barclays said.

The National Asset Management Agency (NAMA) postponed doling out billions in cash to the banks in March so the money could be used for an obtuse scheme to avoid making a €3.1bn payment to the former Anglo Irish Bank, it emerged last night, The Independent reported. Details of the "intended" Nama payments were revealed to the Dail by Finance Minister Michael Noonan, who also hinted that the toxic loans agency would make the multi-billion payment to the banks in May. Nama issued more than €30bn worth of 'Nama bonds' to banks when it bought their bad loans over 2010 and 2011.

Europe's banks are aggravating the region's economic woes by rapidly adopting tough new rules for capital, raising the risk they will have no money left to lend to companies and support economic recovery, Reuters reported. Bloated with risky loans and bad debts, banks are slashing their assets, but this has so far failed to convince investors, hurting the banks' ability to source the capital they need to lend to credit-starved customers. "The genie is out of the bottle.

Spanish banks may need to set aside more money to cover exposure to a bust property market because they still have to recognise billions of euros in loans to non-viable companies, said a report by Spanish property consultancy RR de Acuna. Spain has ordered its battered banking sector to reinforce balance sheets as a correction in the housing market continues and the central bank forecasts lenders will need some 53.8 billion euros ($70.7 billion) to cushion against bad debt. But Thursday's report said that may not be enough. "Banks are not recognising all of their risk.

Home owners with properties in negative equity are being offered new mortgages that allow them to move home, the Irish Times reported. Bank of Ireland this morning said it would offer negative equity mortgages that would allow customers trade up or down, carrying an amount of negative equity to the mortgage for the new property. The lender joins Ulster Bank in offering such deals. The move has been cautiously welcomed, but experts said there were some considerations that should be taken into account.

The Netherlands' ABN Amro Bank NV said Wednesday it won't participate in Greece's debt restructuring, making it one of the few major creditors to back out of the deal, Dow Jones reported. ABN Amro won't participate because it is still unclear why it was put on a list of banks that had to take part in the debt restructuring, a spokesman said. The deadline to participate in the deal was Wednesday. The bank, which holds EUR1.3 billion of corporate bonds that are backed by the Greek government, has argued that the list was inconsistent because peers that hold similar debt weren't put on the list.

The credit union movement should be subjected to a four year restructuring process, the Commission on Credit Unions recommended in a report published Wednesday, the Irish Times reported. A new Restructuring Board should be established to facilitate the process but it would not be the board’s function to “shepherd” individual credit unions that were small or in difficulty, into “an arranged marriage” with other credit unions, commission chairman Prof Donal McKillop told a press conference.

Companies are becoming choosier with their lenders, putting them through rigorous tests and analysing their financial health to pick out business partners, Reuters reported. They are reviewing their bank counterparties, partly in response to worries about the euro zone crisis and its effect on lenders, and because of stricter financial regulations. Gavin Jones, vice-president in the treasury of Netherlands-based Ahold, told the annual conference of the Association of Corporate Treasurers the retailer had examined the banks that it presently deals with.