Headlines

There is tremendous uncertainty across the world. Electorates in the EU are increasingly tempted by radical populists from the left and right, the Financial Times reported in a commentary. President-elect Donald Trump has pledged to scrap or renegotiate the US’s largest trade deals, which have been in the preparation for years. Institutions that are the product of the postwar political centre ground are now discredited. The world is in the grip of an epochal crisis of political economy.

An increasing number of firms are jeopardising their long-term survival by paying only the interest on their debt, not the capital itself. According to insolvency and restructuring trade body R3, the number of firms in this position has risen to 139,000 – 8 per cent of all UK businesses. Last year it was just 69,000 (4 per cent). Paying off only the interest on debt is often a sign of a ‘zombie business’ – a business surviving only because of low interest rates.

Deutsche Bank AG employees may have manipulated internal indexes as part of an allegedly fraudulent scheme to help Banca Monte dei Paschi di Siena SpA conceal losses, according to an audit commissioned by German regulators. The study, requested by watchdog Bafin and seen by Bloomberg, says an internal Deutsche Bank review described “abnormalities” in the values of proprietary indexes used to set the price for the Monte Paschi deal in December 2008.

Until Ben Bernanke mentioned it, tapering was a word rarely heard outside barber shops. The former US Federal Reserve chairman coined the term to describe a slowing of his central bank’s asset purchases. It sounded neat, but it roiled global financial markets hooked on large-scale bond-buying and threw the Fed off course, the Financial Times reported. No wonder Mario Draghi was insistent that scaling back asset purchases by the European Central Bank was different.

Turkish Prime Minister Binali Yildirim announced Thursday the creation of a $72 billion fund for local businesses, part of a spate of new government measures aimed at supporting the country’s economy and slumping currency, The Wall Street Journal reported. Turkey’s currency, the lira, has dropped 18% against the dollar this year and has traded at historical lows since early November. This has happened against the backdrop of the political uncertainty following a failed coup in mid-July and the imposition of a state of emergency.

Policy makers in Prague may introduce negative interest rates to discourage inflows into the koruna around the time they are ending their three-year-old limit on the exchange rate, a policy maker said, Bloomberg News reported. As the Czech National Bank prepares to scrap its Swiss-style cap on the koruna next year, its main challenge is to avoid excessive currency gains that could choke nascent price growth and make the export-led economy less competitive.

To date, 1,019 debt-relief applications have been filed with the Insolvency Service, according to its chief George Karotsakis, Cyprus Mail reported. The service meanwhile has secured 56 court orders relieving debtors – and their guarantors – of unsecured loans of up to €25,000. Karotsakis was speaking to the Cyprus News Agency (CNA), on the occasion of the 16 months since the introduction of the insolvency framework. As a result of the efforts, he said, the World Bank in its ‘Doing Business’ report currently ranks Cyprus 16th in resolving insolvencies.

The chief executive of Bus Éireann has told staff that the company’s finances are in a “perilous state”and that its losses must be addressed, the Irish Times reported. In a letter to the company’s 2,600 employees, Martin Nolan urged staff representatives “to engage meaningfully” with the company on the implementation of a controversial new commercial plan for the business. He said there was no money available at present for pay rises for staff.

Italy is demanding the European Central Bank give it more time to rescue Monte dei Paschi di Siena and is preparing to blame the bank for losses imposed on bondholders if Rome is forced into an urgent state bailout, the Financial Times reported. The board of MPS, which has the Italian Treasury as its largest shareholder, is asking the ECB’s supervisory arm to give it until mid-January to pull off a €5bn equity injection and try to avoid forcing losses on some debtholders as required under new EU bailout rules, say four people close to the process.

European antitrust regulators on Wednesday fined Crédit Agricole, HSBC and JPMorgan Chase a total of just over 485 million euros for colluding to fix benchmark interest rates tied to the euro, the International New York Times DealBook blog reported. The penalties, equivalent to about $520 million, came more than two years after the European authorities issued a statement of objections — a formal step in antitrust investigations — against the three banks. The inquiry began in 2011.