Bankas Snoras AB, Lithuania's fifth- biggest bank by assets, is insolvent and will file for court protection from creditors to avoid a costly bailout for taxpayers, Bloomberg News reported today. The bank's financial situation is "worse than previously identified" and saving the bank "would cost significantly more and would take longer than the available liquidity" at Snoras, the central bank said in a statement. Some 3.4 billion litai ($1.3 billion) in assets are missing, Governor Vitas Vasiliauskas added. The government took over Snoras on Nov.

The Czech Republic's fourth mobile network operator MobilKom has filed a petition to start insolvency proceedings, laying the blame for its woes squarely at the door of the regulator, the Czech Telecommunication Office (CTU), Telegeography.com reported yesterday. The company claims that the CTU repeatedly delayed its competitive entry into the GSM market and has reportedly initiated its own insolvency proceedings in the wake of its failure to adequately redress its poor credit history.

The Irish Bank Resolution Corp., formerly Anglo Irish Bank, launched a formal application yesterday to overturn the bankruptcy declaration made by Ireland's former richest man, Sean Quinn, Reuters reported yesterday. Quinn, who developed a rural quarrying operation into a fortune of 4 billion euros ($5.34 billion) before investing massively in the now failed Anglo Irish, made the declaration in Northern Ireland earlier this month.

Hungary lost its investment-grade rating at Moody’s Investors Service after 15 years as the Cabinet seeks International Monetary Fund help to boost confidence in the European Union’s most-indebted eastern member, Bloomberg News reported today. The foreign- and local-currency bond ratings were cut one step to Ba1, the highest junk-level score, from Baa3, Moody's said. Moody's, which awarded Hungary its investment grade in 1996, assigned a negative outlook. The country is rated the lowest investment grade at Standard & Poor’s and Fitch Ratings.

The International Monetary Fund revamped its credit line program to encourage countries facing outside shocks to turn to the fund with few conditions attached, Bloomberg News reported yesterday. The IMF said yesterday that the new instrument, the Precautionary and Liquidity Line, can be tapped by countries with strong economies currently facing short-term liquidity needs. Funding available will be capped at a percentage of countries' contributions to the fund, limiting the role the instrument can play in preventing the debt crisis from spreading in Europe.

Banks clamored for emergency funds from the European Central Bank on Tuesday, borrowing the most since mid-2009 in a clear sign of the damage the sovereign debt crisis is inflicting on financial institutions, the New York Times reported today. Lenders took out €247 billion ($333 billion) in one-week loans, the E.C.B. said, the biggest amount since April 2009. Euro zone bonds reflected continuing stress. Spain’s 10-year bonds were at 6.57 percent, up 6 basis points, while Italy’s 10-year bonds were up 16 basis points at 6.81 percent.

The European Commission may abandon plans to require auditing companies to share work with smaller rivals because of concerns over the costs of implementing the measure, Bloomberg News reported yesterday. The commission is still likely to propose in its draft law that businesses should rotate the auditors they use. The EU is reviewing audit rules following the collapse of Lehman Brothers Holdings Inc., which raised questions about "the context of the audit" of the bank, Michel Barnier, the EU's financial services commissioner, told lawmakers last year.

French Finance Minister François Baroin yesterday rebuffed concerns over the country's rising financing costs after Moody's Investors Service Inc. warned rising bond yields amplify France's fiscal challenges, the Wall Street Journal reported yesterday. As the second-largest economy in the euro zone, France is being pushed to get its public finances in order and avoid getting caught up in the debt crisis of the periphery.

Spain's central bank said yesterday that it has seized small Valencia-based lender Banco de Valencia SA, the country's latest ailing bank to require state aid, as the sector struggles to digest the fallout from the collapse of a decade-long housing boom, Dow Jones Daily Bankruptcy Review reported. The Bank of Spain said that it will inject up to EUR1 billion ($1.3 billion) in capital and will grant a credit line of up to EUR2 billion to Banco de Valencia, which was partly owned by Spain's Banco Financiero y de Ahorros SA.

A selloff in euro-zone bonds continued yesterday, as investors shrugged off the election of a fiscally conservative government in Spain and continued to clamor for bold action by European policy makers, the Wall Street Journal reported today. A day after Spain's Popular Party won a sweeping victory over the ruling Socialists in the general election, Spanish borrowing costs approached their highest levels since the European debt crisis began. Italy's 10-year yield continued to rise, as did yields for Portugal, Ireland and Greece.