Europe

Liechtenstein's largest bank said it is abandoning its tradition-rich trust business, seeking to distance itself from accusations from officials in Germany and the U.S. that it helped rich foreigners evade taxes, The Wall Street Journal reported. The move by LGT Group, which is owned by the tiny Alpine principality's royal family, marks a move away from a mainstay of Liechtenstein banking: the formation of secretive foundations as tax shelters.
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Europe's three biggest economies showed signs of steepening economic declines in data released Tuesday, The Wall Street Journal reported. Industrial production in France and the U.K. crumbled during January. At the same time German exports, driver of the region's biggest economy, dropped sharply. The difficulties at big manufacturers and exporters have dashed hopes that Europe's economies hit bottom in the fourth quarter. The services sector is faring no better.
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Russia is “not yet on the brink” of a credit-rating downgrade by Moody’s Investors Service as the ruble and foreign reserves stabilize and the government resists taking corporate debt obligations, Bloomberg reported. The ratings firm has no current plans to follow Standard & Poor’s and Fitch Ratings, which both cut their debt ratings for Russia since December, according to Jonathan Schiffer, Moody’s lead analyst on Russian sovereign debt. Moody’s rates Russia at Baa1, three levels above non-investment grade and a step higher than equivalent ratings from S&P and Fitch.
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The Karmsund shipyard in western Norway has filed for bankruptcy, its owner Karmsund Maritime AS said on Tuesday. The unlisted group said its Karmsund Maritime Services AS (KMS) unit, which ran the yard and had 2007 turnover of 800 million Norwegian crowns ($113.6 million) and 130 employees, had been unable to secure financing. "The firm has experienced cost overruns and as a consequence of the financial crisis has been unable to get financing for further operations," Karmsund Maritime said in a statement. The parent company also owns 14 other companies, which it said continued to operate.
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Banco Popolare became the first Italian bank to take up the government's offer of support for its lenders on Tuesday, with newspapers saying it could use the funds to help delist its Italease unit, Reuters reported. Italy's sixth-biggest bank said it had asked the Economy Ministry and the Bank of Italy for permission to issue €1.45 billion ($1.83 billion) of securities under a government-sponsored bond-purchasing scheme. Other leading lenders, including the country's two biggest banks--UniCredit and Intesa Sanpaolo--have said they would evaluate the programme.
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The financial crisis claimed the last of Iceland's major banks Monday, as Straumur-Burdaras Investment Bank hf was taken over by Iceland's Financial Supervisory Authority and immediately shut down. Iceland fell into financial and economic chaos when the country's top three banks all collapsed in a matter of days early October as the global financial crisis swelled. Straumur, which owns U.K. stockbroker Teathers and was the fourth-biggest financial services company in Iceland when the crisis hit, had so far been able to stay afloat, until Monday.
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When the leaders of 20 nations met in Washington in November to face down a grave economic crisis that imperiled them all, the air was filled with promises of a new era of global regulation intended to match a new era of global risk. Nearly five months later, those risks look greater than ever.
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Struggling U.S. carmaker General Motors denied a weekend newspaper report its German unit Opel was preparing for insolvency. "This scenario is currently not on the agenda," a GM Europe spokesman told Reuters on Sunday. German newspaper Die Welt had reported on Saturday, citing no sources, that GM and Opel seemed to be preparing for an insolvency at Opel, having hired three law firms with renowned insolvency experts.
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Latvia faces bankruptcy in three months if it fails to deliver budget cuts required by the International Monetary Fund and the next installment of its bailout is delayed, Premier-designate Valdis Dombrovskis said. Latvia, in the grip of the severest crisis since independence in 1991, was granted a €7.5 billion ($9.5 billion) bailout last quarter after the economy shrank 10.5 percent and the state seized its second biggest bank. The government fell on Feb. 20 after agreeing to budget cuts needed to keep the deficit below 5 percent of gross domestic product.
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The forint hit a new low against the euro Friday, continuing a slide spurred Thursday by a Hungarian Banking Association letter instructing its members to fend off rumors of an impending freeze on customers' deposits, The Wall Street Journal reported. The country's central bank quickly sought to assure depositors their money was safe to avoid a run on the banks, but the effort failed to stabilize the currency. On Friday, the forint fell .95% against the euro. The currency has lost more than 20% against the euro since the start of the year.
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