Headlines

Eight years after the financial crisis, we were all getting bored of bank stress tests. Most of the institutions are so much stronger and better capitalised than they were, and the laggards were so obvious that the tests were starting to get dull, the Financial Times reported. But on Wednesday, the Bank of England turned up the heat, hitting Britain’s seven largest banks with tougher stress tests. Royal Bank of Scotland, Standard Chartered and Barclays all failed to clear some of the hurdles, although only RBS was ordered to find more capital.

As revolutionary as the Temer government’s proposed public spending cap could be, it’s far from the only measure Brazil needs to prevent a fiscal debacle. Among the many dysfunctions dogging Latin America’s biggest democracy -- prolonged recession, a loss-making pension system, systemic corruption -- one of the most insidious has gotten scant attention to now: explosive state and local debt, Bloomberg News reported. Consider Rio de Janeiro, which in June declared a state of financial calamity, the political equivalent to bankruptcy.

Ulster Bank is likely to face more cuts as its parent RBS tries to boost capital after failing Bank of England stress tests, according to analysts. They also expect the Edinburgh-based lender’s investment banking activities to be curbed, the Irish Times reported. RBS may need to dispose of £44 billion (€52 billion) of risk-weighted assets to improve its capital buffers, analysts at Barclays wrote in a note to clients on Thursday. “The current Irish efficiency position looks untenable,” UBS analysts wrote on Wednesday.

Bank of Mexico Gov. Agustín Carstens will step down in July to become general manager of the Switzerland-based Bank for International Settlements, The Wall Street Journal reported. Mr. Carstens will assume the post, which carries a five-year term, in October, succeeding Jaime Caruana, who has been in the position since 2009. He will be the first BIS leader to come from an emerging-market country. The BIS is a consortium of global central banks based in Basel, Switzerland. It hosts bimonthly meetings of top central bank officials and publishes regular research reports. Mr.

Judges in Canada and the U.S. on Thursday approved materials explaining Nortel Networks Corp.’s creditor-repayment plan, inaugurating the beginning of the end of one of the priciest bankruptcies on record, The Wall Street Journal reported. Thursday’s court hearings launched the formal process of polling creditors on the bankruptcy plans that will end Nortel’s corporate life after eight years in bankruptcy, and divide the $7.3 billion in proceeds from its global going-out-of-business sale.

Malta has the most inefficient insolvency proceedings of all the EU member states, a damning report by the European Commission has revealed. The report coincides with new EU rules on business insolvency, aimed at increasing the opportunities for companies in financial difficulties to restructure early on so as to prevent bankruptcy and avoid laying off staff, the Times of Malta reported.

A Chapter 11 bankruptcy exit plan by Abengoa SA's main U.S. subsidiary, Abeinsa Holding Inc, violates the law by shielding the Spanish renewable energy parent from lawsuits, according to the U.S. government's bankruptcy watchdog, Reuters reported. The objection by the U.S. Trustee, which typically oversees the administration of bankruptcy cases and polices them for conflicts, threatens to derail Abengoa's high-stakes debt restructuring plan to avoid its own bankruptcy in Spain.

A German MEP has accused Ireland of “tax dumping” after it was revealed that Real Madrid football star Cristiano Ronaldo has used an Irish company for many of his commercial contracts, instead of a company in higher-tax Spain, the Irish Times reported. The footballer appears to have used a Dublin image rights company, Multisports Image Management (MIM), to conclude many of his contracts, including deals with mobile phone companies and sportswear manufacturers.

The Royal Bank of Scotland said on Wednesday that it would further bolster its capital position after failing regulatory stress tests that measure the ability of large banks to weather a financial crisis, the International New York Times DealBook blog reported. The annual stress test, by the Bank of England, also identified capital inadequacies at Barclays and Standard Chartered. But the central bank did not require them to issue revised capital plans, given actions they had already taken to strengthen their balance sheets.

Last year the reformist head of China’s central bank convinced his Communist party bosses to give market forces a bigger say in setting the renminbi’s daily “reference rate” against the US dollar, the Financial Times reported. In return, Zhou Xiaochuan assured his more conservative party colleagues that the redback would finally secure coveted recognition as an official reserve currency by the International Monetary Fund. Some people familiar with Mr Zhou’s sales pitch described it as a “Trojan horse” strategy because it wrapped difficult reforms in an alluring package.