Europe

Group of 20 leaders need to give regulators oversight of unregulated markets and products, such as credit-default swaps and collateralized debt obligations, to prevent future systemic crises, according to Jean-Pierre Jouyet, head of the French market watchdog AMF and head of an international task force on unregulated markets. "The crisis doesn't arise from the markets but from the lack of organization of some of them," Mr. Jouyet said in an interview Tuesday. "We need to redraw the perimeter of regulation." Financial regulators are looking to the G-20 for guidelines to act, with U.S.
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Spain's government plans to set up a bank restructuring fund to inject capital or liquidity into small and medium-sized savings banks facing problems, Spanish media reported on Thursday. The fund would form part of a bank intervention plan Prime Minister Jose Luis Rodriguez Zapatero announced on Wednesday. The publicly run recapitalization fund would buy preferential shares in banks or provide loan guarantees to institutions running short of liquidity, newspaper El Pais reported.
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German Chancellor Angela Merkel may be losing valuable time that General Motors Corp.’s Opel business doesn’t have as she holds out against taking a stake in the unit. Merkel says U.S. President Barack Obama’s rejection of GM’s recovery plan gives European leaders a 60-day breathing space to help save Germany-based Opel. Unions and analysts say governments need to take control of the division now or risk it falling victim to a restructuring focused on the U.S. business.
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Responding to a popular outcry, the French government issued a decree Monday banning stock options and limiting bonuses for bankers or auto executives who lay off workers after accepting government aid to weather the economic crisis, The Washington Post reported. Prime Minister François Fillon, announcing the measures, said France was the first European country to lay down such legal restrictions on executive pay. Although not retroactive, they will run through 2010, he said in a statement, and they could be extended.
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Prime Minister Gordon Brown, who pledged to freeze his own salary last night, said U.K. companies shouldn’t award big bonuses to executives whose efforts have backfired, Bloomberg reported. “Most people who have worked hard to build up their firm or shop don’t understand why any company would give rewards for failure or how some people have grown fabulously wealthy making failed bets with other people’s money,” Brown told religious leaders at St. Paul’s cathedral in London today.
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Spain's central bank will bail out struggling regional savings bank Caja de Ahorros Castilla La Mancha, marking the first time a Spanish financial institution has been rescued since the current financial crisis began, The Wall Street Journal reported. The Spanish government said on Sunday that the Bank of Spain will take over management of the troubled lender, known as CCM, and inject liquidity to keep it afloat, backed by government loan guarantees of up to €9 billion ($12 billion).
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The overnight oustings of Rick Wagoner and Christian Streiff as chief executives of General Motors and Peugeot Citroën respectively, today sent tremors through the boardrooms of Europe's battered auto industry, The Guardian reported. Dieter Zetsche, head of Mercedes owner Daimler, and Norbert Reithofer, head of Quandt family-controlled BMW, could be next in the firing line as premium carmakers suffer disproportionately from the global collapse of sales.
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The International Monetary Fund reached a deal with Serbia on Thursday to provide a 27-month, 3 billion euro loan to help the country address its vulnerability to the financial crisis, The New York Times reported. The agreement for the loan of about $4 billion was announced at a news conference in Belgrade by Serbian government officials and Albert Jaeger, a fund representative. The deal, which still requires the approval of the monetary fund’s board in Washington, will force painful budget cuts on Serbia, the country’s finance minister, Diana Dragutinovic, told reporters.
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As oil sands developer BA Energy Inc. seeks help from an Alberta court Friday to prevent a fire sale of its assets and appease nervous bankers, it joins a growing list of Canadian oil and gas companies fighting for their lives amid the credit crunch, the Calgary Herald reported on a Financial Post story. While so far only smaller players have run into trouble, insolvency experts say the flood of energy companies headed to court will swell if energy prices stay weak.
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