Ailing Spanish savings bank Caja de Ahorros del Mediterráneo Thursday began discussing its possible nationalization with the central bank after its merger with three small peers fell apart late Wednesday, The Wall Street Journal reported. A CAM spokesman said the Alicante-based savings bank, or caja, is presenting the Bank of Spain with a new business plan and an application for money from Spain's state-financed Fund for Orderly Bank Restructuring, also known as FROB.

People looking for a mortgage will have to prove they can repay the loan under a draft European Union law aimed at stamping out the easy lending that fuelled property bubbles in Ireland and elsewhere, the Irish Times reported. The EU's executive European Commission published its proposal today, the day stress tests revealed Irish banks will require to be recapitalised by a further €24 billion. EU internal market commissioner Michel Barnier, who authored the measure, said that during boom times in Europe borrowers and lenders assumed the good times could not end.

British drinks merchant Oddbins said it expects to go into administration on Monday after it failed to get the backing of major creditor Her Majesty's Revenue & Customs for a company voluntary agreement (CVA), Reuters reported. "As HMRC is a significant creditor, this means the CVA cannot proceed and Oddbins is expected to go into administration on Monday, 4th April, following the court hearing of the administration application," the company said in a statement on Thursday.

Four times in the past two years, Irish authorities have tried to draw a line under their country's raging banking crisis. Now they are hoping the fifth time is the charm. Ireland's central bank on Thursday is expected to unveil the results of "stress tests" of four major lenders, The Wall Street Journal reported. Analysts expect the exams will show the banks need upward of €20 billion ($28 billion) in additional capital. That is likely to leave the Irish government as majority owner of virtually the entire banking sector.

David Drumm, the former chief executive of Anglo Irish Bank, faces two days of questioning Thursday and Friday in connection with debts claimed by Anglo Irish and his declaration of bankruptcy in Massachusetts, the Irish Times reported. Under a protective order that was demanded by Mr Drumm and his lawyers in exchange for their co-operation, the session will be closed to the press. The order compelling Mr Drumm to appear was filed by Anglo’s lawyers last month and subsequently approved by US bankruptcy judge Frank Bailey, who overruled objections by Mr Drumm’s lawyers.

Electrical retailer Dixons Retail PLC Wednesday lowered its fiscal-year earnings target amid a slump in consumer confidence, heightening concerns about the performance of key U.K. high-street chains, The Wall Street Journal reported. Dixons Retail, the U.K.'s largest electrical retailer by market share, now expects underlying profit before tax, excluding operations in Spain, to be around £85 million ($136 million) for the year ending April 30, from a previous range of between £100 million and £110 million. The U.K.

It's going to be a nail-biter. In the latest twist in the euro zone's struggle to repair its battered public finances, there are two desirable outcomes that may not be compatible, The Wall Street Journal reported. Portugal's government looks likely to run out of money within the next three months—according to most bond market analysts, it has enough cash to repay bonds that mature in April, but not those that mature in June. That would suggest that the government needs to go to its European Union partners and the International Monetary Fund for help, and now.

Probes by the U.K. and Icelandic authorities into the failure Iceland's Kaupthing Bank hf have widened to include Luxembourg, The Wall Street Journal reported. Luxembourg police on Tuesday morning raided the premises of Kaupthing's former premises in Luxembourg at the request of British and Icelandic officials, according to authorities. In total, the searches covered three business premises and two residential properties and were continuing as of early afternoon Tuesday. They involved more than 70 investigators from Luxembourg, the UK and Iceland. U.K.

Shares in Irish Life and Permanent plunged today amid speculation that the Government may be forced to take a large stake in the lender as a result of the severity of this week’s bank stress tests, the Irish Times reported. A banking source confirmed today that IL&P, until now the only domestic lender to avoid a state bailout, will be hit hard by the stress tests, which are homing in on potential losses in Ireland's residential mortgage market. The banking source declined to say how large a stake Dublin may take in the lender.

A district court placed Czech lottery company Sazka into insolvency and called a meeting of its main creditors for May 26, the court said on Tuesday, Reuters reported. The move was expected after the debt-laden company's chief executive Ales Husak filed for insolvency late on Friday, the latest step in a months-long battle for control of the national lottery operator. Sazka, owned by Czech sports unions, had 10.5 billion crowns ($604.1 million) in debt as of September 2010.