Europe

A Latvian government proposal to radically restructure the country's ailing economy is credible and ambitious, the Swedish government said Wednesday on behalf of a group of Nordic and Baltic countries, Agence France-Presse reported. "The fiscal restructuring programme is...one of the most credible restructuring programmes we've seen. It's very ambitious," Swedish Finance Minister Anders Borg told reporters in Stockholm, speaking for the eight-nation constituency.

Landsbanki Islands hf sought bankruptcy protection from its U.S. creditors on Tuesday, the last of Iceland's three largest banks to do so in the last two weeks, Reuters reported. The Reykjavik-based lender filed a Chapter 15 bankruptcy petition with the U.S. bankruptcy court for the Southern District of New York. It said it had more than $1 billion of both assets and liabilities. Iceland's banks had taken on billions of dollars of debt in recent years to fund aggressive overseas expansion.

British sofa retailer Land of Leather Holding PLC's share price plummeted 32 percent on Tuesday after it said that talks regarding a possible bid for the company had ended, the Associated Press reported. Land of Leather, which has 109 stores across Britain and Ireland and around 950 employees, said it had stopped discussions with "a number" of potential bidders after those early negotiations suggested any resulting offer would represent "insufficient value" for shareholders.

Wagon, one of Britain’s largest car parts makers, has gone into administration, the company announced on Monday. The news puts up to 500 jobs at risk in the company’s two plants in Coventry and Walsall, and its head office in Birmingham, the Financial Times reported. Trading in Wagon’s shares was halted in October, when the company entered into refinancing talks with Royal Bank of Scotland and its majority shareholder, the billionaire investor Wilbur Ross.

The European Commission plans to propose that “fundamentally sound” banks can repay government aid at rates as low as 7 percent, laying the groundwork for approval of plans by France and Austria to recapitalize lenders, Bloomberg reported. European governments are seeking to shore up the financial system after the credit crisis froze inter-bank lending over the past two months. European Union finance ministers asked European Competition Commissioner Neelie Kroes to impose less stringent repayment conditions on fundamentally sound banks.

Central banks world-wide delivered sweeping interest rate cuts Thursday, even as the continuing turmoil in credit markets means cuts in rates are losing their power to curtail an accelerating global slowdown, The Wall Street Journal reported. Major European central banks, including the European Central Bank, the Bank of England and Sweden's Riksbank joined the central banks of New Zealand and Indonesia in making deep rate cuts. The goal: to stave off deep and painful slowdowns in the wake of financial market turmoil that has squeezed lending globally.

Denton Wilde Sapte LLP has landed a dual role on the administration of London Scottish Bank, the latest financial institution to apply for administration after entering financial difficulties. The firm is advising Ernst & Young, who have been appointed as administrators, as well as representing the Financial Services Compensation Scheme (FSCS) which will be involved in paying compensation to certain customers of London Scottish Bank.

Credit Suisse Group lost three billion Swiss francs ($2.48 billion) in two months and said it plans to fire 5,300 employees, stark signals that investment banks will be retreating from complex bets and are piling into safer businesses as the fourth quarter is proving brutal, The Wall Street Journal reported. Credit Suisse's decision to cut 11% of its work force will save about two billion francs in annual costs and further increases the ranks of the unemployed in the financial sector. Two-thirds of the job cuts, or about 3,500 jobs, will be made at Credit Suisse's investment bank.

The Italian financial police say they have arrested fashion designer Gai Mattiolo on a charge of fraudulent bankruptcy, the Associated Press reported. Officer Stefano Catorci says Mattiolo was placed under house arrest in Rome early Friday for allegedly siphoning funds from his fashion house before declaring bankruptcy. Catorci says another suspect was also arrested on the same charges. He did not give further details because the investigation was continuing. The Rome-based fashion house Gai Mattiolo declined comment. Mattiolo was seen as a rising star of Italian fashion in the 1990s.

Reed Smith LLP on Wednesday became the latest firm to announce significant layoffs, saying that it plans to ax 115 support staff in its U.S. offices and up to 11 associates in the U.K, Bankruptcy Law360 reported. In a firmwide memo, Reed Smith said the layoffs were the result of the continuing slowdown of the economy and reduced demand for the firm's services. The layoffs represent less than 4 percent of Reed Smith's total work force. The 115 layoffs were spread across the firm's 15 U.S.