Headlines

The European Commission warned financial market volatility poses a threat to the eurozone’s booming economy, as it unveiled new forecasts showing that the currency bloc is growing at its fastest pace for a decade, the Financial Times reported. The Commission estimates the eurozone grew by 2.4 per cent in 2017, exceeding expectations by 0.2 percentage points.

The chairman of Carillion said he took “full and complete” responsibility for the construction firm’s collapse, which has put thousands of jobs on the line and left creditors, suppliers and pensioners facing losses of millions of pounds. Employing nearly 18,000 people in Britain, Carillion failed on Jan. 15 when its banks halted funding, triggering Britain’s biggest corporate demise in a decade and forcing the government to step in to guarantee vital public services, Reuters reported.

In a related story, Bloomberg News reported that, for a leader of the U.K.’s party of business, Prime Minister Theresa May has had plenty of corporate headaches in her 18 months in power. None have been more spectacular than Carillion Plc, the construction giant whose collapse last month threatens to make politically toxic the notion of governments outsourcing to cut costs, Bloomberg News reported. At a parliamentary hearing, lawmakers Tuesday accused its management of being “asleep at the wheel.” Here is a snapshot of how U.K. Plc is going to keep giving May grief.

Drilling rig company Seadrill said in a court filing it postponed an initial hearing on its restructuring plan to Feb. 26, buying more time to consider alternative plans, Reuters reported. Seadrill, one of the world’s largest offshore drilling rig operators, filed for bankruptcy in September after a steep drop in crude prices caused drastic cutbacks in oil company investment.

The U.K. economy is being bailed out by stronger growth in the euro area and the rest of the world, according to the National Institute of Economic and Social Research, Bloomberg News reported. A better-than-expected global expansion accounted for about a third of the increase in U.K. gross domestic product last year, explaining the nation’s stronger-than-forecast performance in the wake of the Brexit vote, the think tank said in a report Wednesday. The resulting boost to trade, at a time when future commerce relationships remain uncertain, was “critical” for the U.K.

Intesa Sanpaolo on Tuesday unveiled an ambitious four-year plan to almost halve its stock of bad loans and boost net income, the Financial Times reported. The long-awaited strategy reboot aims to rebuild investor confidence after a turbulent period for Italy’s banking industry in which Intesa has remained profitable but has seen momentum slow. Shares in Intesa, one of Italy’s most healthiest banks, rose 1.8 per cent despite volatility on global markets, as Carlo Messina, the chief executive, revealed the new business plan.

Royal Bank of Scotland on Tuesday denied a British lawmaker's allegation that its executives misled a parliamentary committee over the extent to which the bank mistreated small businesses during and after the financial crisis, the International New York Times reported on a Reuters story. The chief executive and chairman of state-owned RBS were questioned extensively last week by Britain's Treasury Select Committee (TSC) over a restructuring unit that is alleged to have pushed struggling firms into bankruptcy in order to be able to pick up their assets on the cheap.

Most of Carillion’s Canadian business, including facilities management at airports, hospitals and defence sites, is to be taken over by the insurer Fairfax Financial Holdings for an undisclosed amount, the Financial Times reported. More than 4,500 of Carillion Canada’s 7,000 employees will transfer to Toronto-based Fairfax, which has agreed to take over its support services functions, both companies announced on Monday.

European equities faced renewed selling pressure on Monday, pushing the continent’s main stocks benchmark firmly into negative territory for the year, the Financial Times reported. The Euro Stoxx 600 index dropped 1 per cent on the day after a 1.4 per cent sell-off on Friday. The gauge is down 1.3 per cent for 2018, meaning it has surrendered a year-to-date rise of as much as 3.5 per cent, according to FactSet data. Germany has been one of the notable laggards among continental European indices. The Dax index, which measures total returns, is down 1.6 per cent for 2018.

Mario Draghi has urged banks and regulators to prepare for the possibility that the UK and the EU will be unable to agree on a transition deal covering the immediate period after Brexit, as he warned that “frictions” from Britain’s departure were inevitable, the Financial Times reported. The president of the European Central Bank on Monday said that both the private sector and public authorities still faced uncertainty over “the shape of the UK’s future relationship with the EU” which meant “well-managed preparations are thus essential”.