The European Central Bank signaled Thursday that it could raise borrowing costs as soon as next month in response to intensifying inflationary pressures. Such a move would be likely to lead soon to higher borrowing costs for homeowners and businesses, the International Herald Tribune reported. An interest rate increase would make the E.C.B. the first major central bank to raise rates in a bid to prevent the recent effects of higher oil and food prices from spreading into the broader economy.

New statistics released by InsolvencyJournal.ie show that 5 companies went out of business per day in February 2011. There was a 59% increase on the January figures with 153 companies going bust, compared to 96 in January. This is the second highest monthly total InsolvencyJournal.ie has recorded in its history (156 being the highest for December 2009.) Commenting on the figures, Ken Fennell, partner with kavanaghfennell, the firm who compile the data, said, “Although this month’s figures are high, they are in line with the rate of insolvencies for the same month last year.

European Union banking regulators agreed to begin so-called stress tests on the region's banks but said that details of how the tests will work are still being discussed, The Wall Street Journal reported. The results of the tests will be published in June, the European Banking Authority, the new pan-EU banking regulator, said in a statement after a board meeting. The tests will examine how well Europe's banks could withstand sharply higher loan losses, falling securities prices and other potential results of a sharp macroeconomic slowdown.

Billionaire financier George Soros says the incoming government has a “legitimate” claim to impose bailout losses on senior bank bondholders and warns Ireland could be “dragged down” for years by Europe’s no-default policy, the Irish Times reported. Fine Gael and Labour each pledged during the election campaign to tackle senior bond investors. However, as they embarked on coalition talks, EU economics commissioner Olli Rehn ruled out any move in that direction.

Troubled music and books retailer HMV saw its chairman resign and its share price hit a record low yesterday after warning it would miss profit targets for the second time this year, The Scotsman reported. The company, which owns Waterstone's as well as a string of live music venues including The Picture House in Edinburgh, said trading had not improved since its last update in January when it warned that poor Christmas sales would leave profits at the lower end of market expectations.

Russian gas export monopoly Gazprom won the rights to a giant Siberian gas field destined to supply the fast-growing markets of China, a spokesman for the sale organiser said on Tuesday, Reuters reported. Victory at the auction will allow Gazprom to extract the field's 2 trillion cubic metres of reserves, enough to supply the world for eight months, and forge deeper ties with China, where the Russian energy giant plans to start exporting gas in 2015.

It’s March-madness season for European Union summitry as governments struggle to carve out a package of economic measures they hope will contain the region’s debt crisis, The Wall Street Journal Brussels Beat blog reported. From Friday’s gathering of center-right leaders in Helsinki through the March 24-25 European Council in Brussels, the upcoming meetings could reshape the EU–creating a more tightly integrated Euro-zone core with a new set of ties to non-euro nations.

The Department of Finance provided repeated warnings to the Government about the risks involved in running pro-cyclical budgetary policy during the boom years, a report has revealed, the Irish Times reported. However the report, drafted by a team commissioned to investigate the department’s performance over the past 10 years, criticised it for not altering the tone of its warnings as they were ignored in successive budgets. The report adds that the department also warned about the dangers of an overheated construction sector.

The European Commission has ruled out any move by the incoming government to compel senior bondholders to bear losses on their investments in Ireland’s banks, the Irish Times reported. Although Fine Gael and Labour each pledged during the election they would impose losses on the holders of senior bank debt, economics commissioner Olli Rehn made it clear yesterday such a manoeuvre would not find support in Europe. The stance of the commissioner, who did not elaborate, was in line with the European Central Bank’s opposition to any default on senior bank bonds.

The National Asset Management Agency imposed no haircut on AIB’s loan on the Montevetro building in Dublin as the loan was provided after the Government announced plans for the agency, the Irish Times reported. AIB lent about €30 million to the developer of the building, Real Estate Opportunities, in which Treasury Holdings is a major shareholder, after April 2009 when Nama was unveiled. No discounts were imposed on development loans provided after April 2009 following an agreement between the banks and Central Bank governor John Hurley.