Headlines

International banks have started looking at office space in Frankfurt as they consider whether they will need to shift some of their European operations out of London if Britain votes to leave the EU, the Financial Times reported. London is the world’s principal location for euro-denominated trading, a $2tn-a-day market, even though the UK is outside the single currency area.

The European Central Bank said Wednesday it would start accepting junk-rated Greek government debt as collateral for the ECB’s regular lending to banks, reopening a cheap funding channel that could help breathe life into Greece’s struggling economy, The Wall Street Journal reported. The decision to open a funding facility that had been shut for 16 months should help to restore confidence in the Greek banking sector and could lead to the partial lifting of capital controls in the coming days, economists and bankers said.

German banks exploited a legal loophole that allowed two parties to claim ownership of the same shares, the financial watchdog will tell lawmakers this week, in schemes that could have cost the state billions of euros in tax over many years. This double ownership allowed both parties to claim tax rebates. It has provoked public anger in Germany and is an embarrassment for the Berlin government, which has campaigned for years to root out tax evasion around the world. The loophole was closed in 2012, with the means of claiming double ownership banned.

The National Asset Management Agency said it has now repaid 85 per cent of the €30.2 billion of senior bonds it issued to banks during the financial crisis to pay for their risky commercial property loans, the Irish Times reported. This comes after Nama redeemed a further €1 billion of such notes earlier today, marking its second such bond buyback so far this year. Senior bonds comprised 95 per cent of the deeply discounted payment it made to banks between 2010 and 2010 for their loans. The remaining 5 per cent is made up of subordinated bonds.

Brazil’s Oi SA, a telecommunications company that recently filed the largest bankruptcy in the country’s history, is seeking court protection in the U.S. to shield its assets from an affiliate of hedge fund Aurelius Capital Management LP, one of its holdout bondholders, The Wall Street Journal reported. Oi and several affiliates sought chapter 15 protection—the section of the bankruptcy code that deals with international insolvencies—at the U.S. Bankruptcy Court in Manhattan on Tuesday, with a debt load of $19 billion.

Dominic Chappell, the former owner of BHS, tried to pay for a family holiday to the Bahamas on company expenses and took a £90,000 loan from the department store chain to pay a personal tax bill, according to evidence submitted to MPs, The Guardian reported. The allegations were made by Darren Topp, chief executive of BHS, in a submission to the parliamentary committee investigating the demise of the company, which accuses Chappell of treating the retailer’s money as if it was his own personal funds.

Kenya's NIC Bank has been appointed as a consultant to assess the assets and liabilities of Imperial Bank, which was put into receivership in October after fraud was uncovered, the central bank said on Tuesday, Reuters reported. The appointment of NIC Bank, a mid-tier bank, would ensure customers receive more of their deposits after the closed bank's shareholders failed to support a proposal for swiftly reopening Imperial, the central bank said in a statement. Three small or medium-sized banks in Kenya have been closed in less than a year, unnerving investors.

Germany’s top court ruled Tuesday that an unlimited bond-buying program created by the European Central Bank at the height of Europe’s debt crisis complies with German law, ending a yearslong legal challenge to a program credited with easing fears of a breakup of the currency zone, The Wall Street Journal reported. The verdict is an important victory for ECB President Mario Draghi over his German critics at a time of renewed tensions between the ECB and its biggest shareholder, Germany.

The bankruptcy petition of mobile phone carrier Oi SA, the biggest ever in Brazil, poses no threat to the country's financial system, central bank director Aldo Mendes said on Tuesday, Reuters reported. The company's petition late on Monday to seek protection from creditors on 65.4 billion reais ($19.2 billion) in liabilities, raised alarms about the exposure of local lenders. Speaking at an event in Sao Paulo, Mendes, director of monetary policy, also said the bank is waiting on international economic events before deciding whether to intervene in the local currency market.

Romania's largest power producer Hidroelectrica is no longer insolvent, Bucharest's main court ruled on Tuesday, paving the way for the first initial public offering of a state firm in the country since 2014. After the ruling, Hidroelectrica said it planned to sell a minority stake in an initial public offering in November. Hidroelectrica has been run by a court-appointed manager since it became insolvent for the first time in 2012. "The court ruled today to end Hidroelectrica's insolvency process," a court clerk who read out the ruling at the Bucharest Tribunal told Reuters.