Headlines

Bank of Cyprus, one of the biggest casualties of the eurozone financial crisis, can once again offer investors a dividend after repaying its “monstrous” emergency funding almost a year ahead of schedule, the Financial Times reported. The Cypriot bank rose to prominence in 2013 when it used deposits of above €100,000 to help fund its rescue deal, the first example of the “bail in” that the EU hoped to use so taxpayers would no longer carry the can for failed banks.

Global markets spent most of 2016 adjusting to the reality of a slow but steady weakening of China’s currency, the International New York Times DealBook blog reported. Now, Beijing appears uncomfortable with that state of affairs. Financial regulators in recent days have introduced new rules to curb the amount of capital flowing out of the country, helping to slow the pace of the renminbi’s decline. They issued stricter rules on the movement of renminbi offshore for conversion into dollars.

Portugal’s central bank has chosen US private equity firm Lone Star as the leading candidate to buy Novo Banco, the bank which was carved out of collapsed Banco Espirito Santo (BES), the central bank said in a statement, the Irish Times reported. The central bank now plans to hold further talks with Lone Star after selecting it ahead of other prospective purchasers including China’s Minsheng Financial Holding and US funds Apollo and Centerbridge. Portugal had hoped to decide on the sale of Novo Banco by the end of last year ahead of a final August 2017 deadline for the sale.

The federal government is projecting decades of deficits as a new Finance Canada report shows Ottawa’s long-term finances have deteriorated considerably over the past two years, The Globe and Mail reported. The government’s latest long-term fiscal forecast adds new context to the federal government’s reluctance to boost provincial health transfers. The decades of surpluses projected by Ottawa just two years ago have now shifted to decades of annual deficits that will run until 2050.

The Bank of Mexico stepped into the exchange market Thursday for the first time in almost a year to support the peso, which hit new lows against the U.S. dollar on fears that protectionist measures by the incoming administration of U.S. President-elect Donald Trump could hurt the country’s trade and investment, The Wall Street Journal reported. The foreign-exchange commission, formed by central bank and Finance Ministry officials, said the dollar sales were to provide liquidity and ease the exchange volatility of recent days, and kept open the possibility of additional interventions.

Efforts by the Revenue Commissioners to ensure compliance with tax law yielded €555 million for the exchequer in 2016, a year that saw 17 criminal convictions for serious tax and duty offences, the Irish Times reported. The Revenue, which collected a record €47.9 billion in total last year, completed 537,183 “compliance interventions” as it sought to tackle tax evasion, its headline figures show. There were 1,672 summary convictions, down 19 per cent on 2015, while the number of criminal convictions for evasion and fraud is also down on the previous year, when there were 27.

The Egyptian cabinet approved on Wednesday the country's first bankruptcy law, Justice Minister Hossam Abdelrahim said, part of an economic reform drive aimed at encouraging investment, Reuters reported. The law aims to minimise the need for companies or individuals to resort to the courts and will simplify post-bankruptcy procedures, Abdelrahim said, adding that the measure would also abolish imprisonment in cases of bankruptcy. Until now, Egypt has had no specific law on bankruptcy, meaning failed companies have had to go to court on a case-by-case basis.

India lowered its borrowing plan for the year ending March 31 by 4.2%, in a sign that the government’s crackdown on tax evaders is helping to increase New Delhi’s coffers, The Wall Street Journal reported. The government says it plans to cut the amount it borrows by 180 billion rupees ($2.64 billion) from its earlier estimate of about 4.25 trillion rupees. Prime Minister Narendra Modi in November announced a plan to withdraw and replace 500- and 1,000-rupee notes in an effort to cut tax evasion, terrorism and government corruption.

Monte dei Paschi's rescue has hit Europe's new regime for rescuing banks where it hurts, Reuters reported in a Breakingviews. The Italian state will fund three-quarters of MPS's 8.8 billion euro rescue, rather than winding it down. The rub is that it's hard to think of a bank that looks more like a candidate for resolution. European authorities think they can square the circle. MPS is using a clause in Europe's Bank Recovery and Resolution Directive (BRRD) allowing governments to put capital into banks deemed solvent. The clause applies when a bank fails a stress test.

Among UK retailers, Next has tended to give some of the most cautious guidance. This year, that looks the right approach. The clothing chain predicts a particularly doom-laden year for the British high street and warned pre-tax profit may fall by as much as 14 percent. That's down to Next's own issues, but also spiraling costs for retailers. Britons' more ready embrace of online than consumers in some other markets adds to the crunch. Unlike various rivals, Next plans to pass Brexit-related manufacturing cost increases on to its customers.