Iceland’s banks may come under pressure to forgive about $2 billion in mortgage debt after protests this week prompted the government to consider proposals from the island’s homeowner protection group, Bloomberg reported. “The debt the banks have to write off could very well be very challenging for them,” said Economy Minister Arni Pall Arnason, in an interview in Reykjavik. “So be it. The banks have to acknowledge quickly that current debt levels are unrealistic and that timely write-offs are necessary.

Aer Arann looks set to be taken over by a group comprising its current owner Pádraig Ó Céidigh and an overseas listed company, The Irish Times reported. It is understood that the airline’s examiner is in the final stages of negotiations with the parties about a multi-million-euro investment package into the cash-strapped regional airline. This is likely to be presented to the High Court on Monday for approval. A scheme of arrangement would then be put to the company’s creditors. If given the green light, this investment would save up to 300 jobs at the ailing airline.

Strict curbs on bankers' bonuses could be made tighter from next year under new European Union proposals, Sky News Online reported. Measures due to be published within days by regulators in Brussels could mark the biggest clampdown yet on bankers' pay and go even further than plans by the UK's Financial Services Authority (FSA). The EU controls - which would be adopted by the FSA - are set to include a cap that would limit the amount of bonuses bankers get upfront to a maximum of 30%. Proposals on the table from the FSA would allow bankers to take up to 50% of payouts in cash.

Britain's banks are set to accelerate the sale of distressed assets or portfolios of loans, restructuring experts said at a Reuters Summit this week. Royal Bank of Scotland, Lloyds and others are showing more interest in selling businesses or loans to shrink their balance sheets, especially as new capital rules will make holding them even more of a burden. "It's happening already," Matthew Prest, managing director at investment bank Moelis & Co said at the Reuters Restructuring Summit on Thursday.

Adesto Technologies Inc., a developer of low-power memory chips for consumer electronics, says it has acquired intellectual property and patents from German semiconductor company Qimonda AG, Dow Jones Daily Bankruptcy Review reported. Adesto bought Qimonda intellectual property and patents related to Conductive Bridging Random Access Memory, or CBRAM, technology. The agreement includes the purchase of 30 CBRAM patent families and the licensing of additional undisclosed patents. Terms of the deal were not disclosed.

Ireland’s Financial Regulator Matthew Elderfield told an Oireachtas committee today that there should be caution about imposing losses on holders of senior debt in insolvent Irish financial institutions, Finfacts reported. Elderfield said the Government has made its position clear on this matter and it does not intend to impose losses on senior bond holders. However, this does not rule out the possibility of some negotiations or a liquidity management exercise agreed by consent.

The International Monetary Fund said today that the financial sector remains the 'Achilles’ heel' of the economic recovery, Finfacts reported. The Fund published its latest Global Financial Stability Report today and it said that its baseline scenario is for a gradual improvement in financial stability as the ongoing economic recovery continues but substantial downside risks remain.

A new, more draconian tax on bonuses should be slapped on banks, a leading Liberal Democrat said tonight after the Royal Bank of Scotland chairman admitted that regulation was the only way to restrain the annual bonanza for bankers, the Guardian reported. Amid estimates that the City would pay out £7bn in bonuses this year, Lord Oakeshott said the moment had now come to reintroduce a tax on bonuses which, when imposed on the banks last year, brought in £3.5bn for the exchequer.

Taoiseach Brian Cowen insisted he did not know Anglo Irish Bank was facing insolvency the night the Government issued a blanket bank guarantee, despite attending an earlier meeting at which officials discussed the bank’s situation, The Irish Times reported. Mr Cowen told Labour Party leader Eamon Gilmore “No, I didn’t” when asked if he knew about Anglo’s insolvency that night in September 2008 when the guarantee was issued. Bank of Ireland and AIB had emergency talks with the Government after Anglo told Bank of Ireland it was facing insolvency and sought a takeover.

A legal mechanism for imposing reduced terms on a secured creditor is theoretically possible but would present significant practical difficulties, the High Court has heard, InsolvencyJournal.ie reported. In a hearing yesterday Mr Justice Frank Clarke continued the examinership of several companies in the McInerney home building group after concluding that one of three possibilities outlined in a report prepared by the examiner allowed for a realistic chance of the companies’ survival.