Ailing German lender Hypo Real Estate (HRE) should be wound down, a German expert commission has recommended, two sources familiar with the matter told Reuters on Wednesday. "The experts can see only slim chances that a privatisation of HRE would become a success," said one of the people with knowledge of a report drafted on behalf of the German government by the expert commission. Due to overcapacity in the markets where nationalised mortgage lender and state financier HRE is active, the experts concluded that a sale would not yield higher proceeds than a liquidation, the source added.

Big-name bidders are circling a $640 million portfolio of soured Spanish commercial-real-estate loans, the latest sign of how private-equity firms are still trying to take advantage of the property bust even as the global economy recovers, The Wall Street Journal reported. Morgan Stanley, which is handling the sale for Royal Bank of Scotland Group PLC, received a handful of initial proposals at the end of last week, a person familiar with the situation said Tuesday.

Bank of Scotland said yesterday it was prepared to restructure the debt of buy-to-let borrowers in Ireland who have fallen deep into negative equity although it said it would only do so in exceptional circumstances, the Irish Times reported. The property crash has left many small-scale property investors in serious financial difficulty as they cannot meet their mortgage repayments or sell their properties for anything close to the sums they paid for them.

The European Union is starting to use new financial oversight powers to ensure that banks don't return to the risk pay policies that prevailed before the financial crisis, EU financial services chief Michel Barnier said in an interview, The Wall Street Journal reported. The exercise will be a key test of the EU's pledge to crack down on the bank-bonus culture that is widely blamed for encouraging bankers to take large short-term risks at the expense of longer-term financial stability.

The sale of the licence holder of the giant Kovykta gas field, majority-owned by Russia's TNK-BP, has been postponed for two weeks and will be held on March 1, the sale administrator said on Tuesday, Reuters reported. RUSIA Petroleum was declared insolvent by a regional court in October after TNK-BP, owned by British major BP and a quartet of Russia-connected billionaires, filed a petition to initiate bankruptcy proceedings. Initially the auction was mooted for Feb. 15 with a starting price of 15.083 billion roubles.

A report from Goodbody Stockbrokers has argued that the State cannot bear the losses from the banking crisis on its own, RTE News reported. In a report on Irish debt levels, Goodbody says there should be some form of risk-sharing with bondholders. But it adds that Ireland cannot do this on its own, and should push for a Europe-wide solution to the problem. Goodbody says some €21 billion of bank debt should be restructured now - otherwise there will have to be a restructuring of Irish sovereign debt some time after 2014.

Anglo Irish Bank, the reckless institution at the heart of Ireland's slide towards bankruptcy, has reported a preliminary euro17.6 billion ($24 billion) loss for 2010 - by far the worst in Irish corporate history, the Associated Press reported. State-owned Anglo revealed the staggering figure Tuesday after the Dublin High Court approved a government plan to merge Anglo with another bust bank, Irish Nationwide, within weeks. The court order permits both banks to auction off their surviving deposit bases to solvent Irish banks.

The U.K. government increased its bank levy for this year to raise an additional £800 million ($1.29 billion), an incremental move for banks more likely aimed at taking some of the steam out of Britain's heated annual debate over bankers' bonuses, The Wall Street Journal reported. Treasury Chief George Osborne still faces a raft of dilemmas over taxation as he balances public calls for tax reductions on items such as fuel with the need to whittle down the country's debt mountain. Mr.

European Central Bank (ECB) chief Jean-Claude Trichet has reiterated his opposition to any debt restructuring by Ireland, saying the terms of the EU-IMF bailout plan for the State have been approved by “the entire world”, the Irish Times reported. Mr Trichet’s remarks before a committee of the European Parliament come against the backdrop of demands for the renegotiation of key elements of the deal by Fine Gael and Labour, which hope to be in government within weeks.

For the first time since the onset of the credit crisis, Moody’s has recorded a month in which not a single company defaulted on its debt, the Financial Times reported. The rating agency said on Monday that January was the first month since June 2007 when no default was recorded among the companies whose debt it rates. In comparison, eight companies defaulted in January 2010 and there were five defaults per month on average last year. The rate at which global speculative-grade companies have been defaulting has been falling with the recovery in the global economy and lending.