Headlines

Back in 2014, the Bank for International Settlements published a paper which argued that the financial sector crowds out real economic growth, pointing to a negative relationship between its growth and productivity gains, the Financial Times reported in a commentary.

Noble Group is closing down its London oil desk and winding down its Asia oil operations, sources familiar with the matter said, as heavy losses and high debt force what was once Asia's biggest commodities trader to restructure, the International New York Times reported on a Reuters story. The closures follow the sale of its larger U.S. oil trading business to Vitol, announced in October, and a nine-month loss of some $3 billion reported in November.

Bonds investors are finally acting like they’ve lost hope that Venezuela will make any future debt payments, The Wall Street Journal reported. Traders debated for weeks about whether to continue pricing the oil-rich country’s sovereign debt with the assumption that it would keep making interest payments. But as the pile of unpaid coupons racked up, the association for emerging market debt traders this week threw in the towel and announced that from now on, the market should assume Venezuela isn’t likely to pay.

The Private Sector Federation (PSF) has called for a review of the 2017 draft law on insolvency and bankruptcy, saying it is silent on some key issues, like how to handle cases of bankruptcy among individuals and NGOs, the New Times reported. Deus Kayitabarwa, the director of advocacy at the Private Sector Federation (PSF), explained that the proposed law mainly focuses on business enterprises, but is silent on how an individual or a non-governmental organisation goes bankrupt.

India is likely to consider expanding its bankruptcy law to include cross-border insolvency, which helps lenders tap defaulters' assets overseas, as a top panel at the Insolvency and Bankruptcy Board of India (IBBI) meets Thursday to help strengthen the framework dedicated toward recovering bad loans, the Economic Times reported. "Cross-border insolvency is on top of the agenda. The authorities are keen to make that happen as there is no provision under the Insolvency and Bankruptcy Code (IBC) for it," an executive privy to the matter told ET.

The administrator of Niki said he would press ahead with an agreed sale of the insolvent Austrian airline to British Airways owner IAG after a German court ruling fanned concern that the deal could unravel, Reuters reported. A secondary insolvency filing in Austria, which Niki will submit by the end of this week, will safeguard the sale, Lucas Floether said in a statement on Tuesday. Niki filed for insolvency in Berlin last month after Germany’s Lufthansa scrapped plans to buy the Austrian arm of Air Berlin, grounding its fleet and stranding thousands of passengers.

Fund managers holding Venezuela government bonds face a day of reckoning after months of waiting for more than half a billion dollars in late interest payments, Bloomberg News reported. Since November, investors following guidelines established by the Emerging Markets Traders Association have marked their Venezuela bond holdings to include all the interest they were owed, even though it hadn’t shown up yet. The trade group decided to scratch that rule Monday, and say that beginning today the nation’s debt will trade flat, or without accrued interest.

Germany’s economic outlook is good. So good that corporate dealmakers have reason to be worried. Europe’s largest economy is in the midst of an economic upswing, which by some measures kicked off almost 15 years ago and is already “the longest since the late 1960s”, as Stefan Kreuzkamp, chief investment officer of Deutsche Asset Management, puts it. Last year was the fourth in a row that Germany recorded growth far higher than the country’s long-term potential, which Bundesbank estimates at about 1 per cent, the Financial Times reported in a commentary.

The Brits are on their way out and leaving the EU with a mighty headache about money, the Financial Times reported. Rows over the common pot of cash in the EU27 will be about €13bn a year more painful after the UK blows a hole in the budget after 2020. Discussions over post-Brexit EU funding are likely to be protracted.

Brexit is a once-in-a-lifetime opportunity for Frankfurt to try to lure global banks away from London — but do not expect Germany’s main financial regulator to be part of a heavy sales pitch. “We are not a marketing agency and not interested in doing industrial policy,” says Felix Hufeld, the president of BaFin, which oversees 1,740 banks in the eurozone’s largest economy.