Europe

National Irish Bank (NIB) has set aside €146 million for loan impairment charges related to losses on commercial property transactions, The Irish Times reported. The bank, which is outside the Government's guarantee scheme, said impairment charges related to bad loans were down €52 million on last year. The Danish-owned lender today reported losses of €133 million for the first three months of the year, saying economic conditions remained “very difficult”. The bank’s total loan book was €10.2 billion, down 5 per cent on last year.
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The politician at the centre of Europe’s first big criminal trial of the credit crisis has urged banks to stop putting short-term gain ahead of long-term relationships with their customers. Ahead of Thursday’s opening of a trial against JPMorgan Chase, UBS, Deutsche Bank and Depfa, Letizia Moratti, mayor of Milan, rejected suggestions that Italy’s financial centre should have been a more sophisticated investor when dealing with derivatives, saying it had been duped.
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A general strike Wednesday in Greece was halting flights, trains and ferries and paralyzing public services, as unions rally against major new spending cuts aimed at saving the country from bankruptcy, The Associated Press reported. All flights into and out of Greece stopped at midnight Tuesday. Schools, hospitals, tax offices and the Acropolis along with other ancient sites will be closed. There will be no news broadcasts, and shop owners have been called on to close their shutters during rallies.
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The sell-off in global markets has accelerated amid fears that the eurozone debt crisis would worsen and that China’s recovery is faltering, the Financial Times reported. From Hong Kong to New York, there was mounting concern that the €110bn international rescue package for Greece would not prevent the crisis spreading from Athens to other highly indebted eurozone nations. The euro dropped to a one-year low against the dollar, European shares plumbed two-month lows and the bond markets of weaker eurozone economies fell as rattled investors sold risky assets.
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Barclays Plc had “a right to walk away” from a 2008 deal to buy bankrupt Lehman Brothers Holdings Inc.’s brokerage unit and would have if certain assets had been left out, the U.K. bank’s top in-house lawyer said, BusinessWeek reported on a Bloomberg story. “That was clearly in Barclays’s mind at that point in time,” Jonathan Hughes, Barclays’s global general counsel, told a bankruptcy judge in New York today, referring to the bank’s discovery during the negotiations that Lehman couldn’t deliver all the promised assets.
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New statistics compiled by InsolvencyJournal.ie reveal that insolvencies in the first four months of 2010, have increased by 27 per cent compared to the same period last year, Finfacts reported. A total of 532 company failures were recorded so far this year, compared to 419 between January and April 2009. 125 companies went bust in April, down 15 per cent from the March total of 147 insolvencies. Dublin continues to account for the majority of failures with 52 insolvencies - - 42 per cent of all insolvencies.
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European Central Bank President Jean- Claude Trichet, who capitulated on a January pledge not to relax lending rules for the sake of one country, may have to sacrifice more principles to prevent Greece from bringing down the euro, Bloomberg reported. Trichet yesterday diluted rules for the second time in a month to guarantee the ECB will keep taking Greek government bonds as collateral for loans.
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The €110 billion ($147 billion) three-year Greek bailout by euro-zone countries and the International Monetary Fund won't be enough to cover Greece's costs, an examination of Greek financial figures shows, setting Europe up for more tough choices if private markets don't start lending again, The Wall Street Journal reported. The bailout announced here over the weekend will solve one pressing problem: Greece will have enough cash to repay an €8.5 billion bond that comes due in two weeks.
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Chrysler expects to report its first substantial monthly sales increase in the U.S. in more than two years Monday, but CEO Sergio Marchionne is shifting attention to Fiat, where problems are deepening, the Detroit Free Press reported. The European half of this new alliance is facing change nearly as wrenching as Chrysler's government-backed bankruptcy. Car sales in Italy are expected to fall about 15% this year because the government stopped paying consumers to replace dilapidated old vehicles.
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The government will resist attempts by any of the main players in the Irish insurance market to take over Quinn Insurance, on the grounds that such a deal would reduce market competition and result in further job losses at the company, the Sunday Business Post reported. The Quinn Group said last week it would sell the insurance business, which is in administration, in an effort to protect jobs. Both Quinn and the government are now favouring selling the business to a new entrant to the Irish insurance market.
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