The global economic crisis has forced policy makers to confront a long-simmering problem fraught with political danger: the growing burden that public pension systems are placing on government budgets in an era of large deficits and mounting debt, The Wall Street Journal reported. With the global elite gathered in Davos, there was much fretting about the threat to the developed world's public finances posed by their aging societies and slow post-crisis economic growth. Doubts about governments' ability to pay pension benefits are central to these worries.

Spanish savings bank La Caixa plans to transfer its banking business to listed unit Criteria CaixaCorp SA, in a restructuring effort to improve management and its access to capital markets, The Wall Street Journal reported. Such a move by Barcelona-based La Caixa, the biggest and healthiest of the large savings banks, could set an example for other cajas to follow, analysts say.

The Polish government has come up with a plan to plug its yawning budget gap by reducing the share of social security contributions it transfers to private pension funds. Poland’s move isn’t nearly as drastic as the measures taken in Hungary, but it met with fierce criticism nonetheless, The Wall Street Journal New Europe blog reported. In Poland, a fixed proportion of workers’ salaries is withheld as contribution to the country’s pension system. Most of that stays with the government and is used to pay out pensions to people already retired.

A top European Central Bank official urged euro-zone governments to make their €440 billion ($602 billion) crisis fund more flexible so that it can buy bonds of fiscally distressed governments and offer them short-term credit lines, a signal that the ECB wants to reduce its role in fighting the currency bloc's debt crisis.

An amendment to the legislation covering the National Asset Management Agency (Nama) published yesterday will allow for the transfer of up to 20,000 additional small loans from Bank of Ireland and AIB to the agency, the Irish Times reported. The National Asset Management Agency (Amendment) Bill 2011 provides a legislative framework for the transfer to Nama of land and development loans previously excluded on the basis that they were valued below a threshold of €20 million. The removal of this threshold was agreed with the EU and IMF in November as part of the bailout package.

The International Monetary fund has called on the European Union to increase the size of its sovereign bail-out fund, and allow it greater flexibility in tackling the problems of the so-called euro zone peripheral states, including Ireland, RTÉ News reported. The IMF also calls for a Europe-wide bank resolution scheme, and says bank creditors, and not taxpayers, should bear the ultimate cost. In its latest financial stability report, the IMF says the euro zone debt crisis is the most pressing problem in global finance.

A court ruling that could ban Banco Santander SA's chief executive from the banking industry has thrown a spotlight on succession strategy at the Spanish lender, already in disarray after the departure of one rising star last year, The Wall Street Journal reported. Alfredo Sáenz, who has been chief executive of the bank since 2002, is expected to be banned from running banks in coming weeks by Spain's Supreme Court after he was found guilty of making false criminal accusations in a 17-year-old case during his tenure at the helm of Banco Español de Crédito SA, known as Banesto.

Loan losses at the banks may be “a little larger” than was expected under the new regulator’s first round of stress tests last year, governor of the Central Bank, Patrick Honohan, has said, the Irish Times reported. The Central Bank will complete the second round of capital stress tests on the banks by the end of March. The liquidity of the banks will also be tested in this round. To ensure the banks are fully protected against further shocks, Prof Honohan has insisted they “overcapitalise” above a new core tier one capital ratio of 12 per cent.

Promotora de Informaciones SA said Tuesday it will cut its workforce by 18% through an estimated 2,500 layoffs, as part of the cash-strapped company's ongoing restructuring process, Dow Jones Daily Bankruptcy Review reported. In a regulatory filing, Prisa, as the company is commonly known, said the financial cost of the move will depend on planned discussions with trade unions and workers' representatives.

Allied Irish Banks has made a gain of €1.4 billion from a voluntary offer to buy back debt for 30 cent in the euro from subordinated bondholders. This will go towards the €6.1 billion in capital that it must raise before the end of next month, the Irish Times reported. The bank is purchasing about €2 billion of the bonds, paying a 70 per cent discount in an offer that was taken up by about 45 per cent of subordinated bondholders – a lower rate than expected.