Headlines

Falling commercial real estate prices after the UK’s vote to leave the EU pose a threat to bank stability because of the market’s reliance on foreign capital, Bank of England said. Values have declined 2.6 per cent since the referendum and may drop further from their current high levels, according to the central bank’s twice-yearly assessment, the Irish Times reported. Continuing declines would affect companies’ access to finance because many use commercial real estate as collateral.

Brazil’s economy recorded its seventh straight quarterly contraction between July and September, disappointing hopes the new government of president Michel Temer could engineer a quick turnround in the fortunes of Latin America’s biggest economy, the Financial Times reported. The news on the economy, with gross domestic product contracting at an annual rate of 2.9 per cent during the third quarter, came after protesters fought pitched battles in the streets of Brasília overnight against a budgetary reform being voted on in the senate.

UK banks' Additional Tier 1 bonds would be fair game and converted into equity if they hit severe problems, the Bank of England's most stringent stress tests yet showed on Wednesday. This year's test was the third annual healthcheck by the Bank of England's Prudential Regulation Authority (PRA) and was more severe than in 2014 and 2015. It was the first based on the central bank's new approach to stress testing, which includes potential misconduct costs, Reuters reported.

The High Court has moved to put a biomass-fuelled power plant under construction in Co Mayo into liquidation after efforts to come up with a rescue plan for the insolvent company, with €125 million of debts, failed, the Irish Times reported. The court appointed Michael McAteer of Grant Thornton on Wednesday afternoon as liquidator to Mayo Renewable Power, which initially sought court protection from its creditors under examinership in August.

Ireland needs to act “urgently”to put in place by 2020 an auto-enrolment system, which would boost private pension coverage, the Irish Times reported. “A road map needs to be put in place for the introduction of an auto-enrolment system for all Irish businesses. I am calling in the Government to make it an urgent priority to ensure that an auto-enrolment system is put into Irish law by 2020. I believe this can be done through crossparty agreement,” Brian Hayes MEP said. His comments come against a background of declining private pension coverage in Ireland.

The days when a Chinese iron ore miner could buy a UK video game developer are drawing to a close as Beijing tightens up on cross-border investment by its companies, the Financial Times reported. Investment banks in Asia have worked overtime this year on bringing an expansive range of acquisition targets to aggressive Chinese groups, many of which have strayed far beyond the acquirers’ original scope of business.

The European Investment Bank (EIB) is seeking to help alleviate the impact of Brexit on the Irish economy by opening up new funding channels for businesses in Ireland, its vice-president has said, the Irish Times reported. Speaking in Brussels ahead of the opening of the first EIB office in Ireland next week, offered by the Luxembourg-based bank. “Brexit will have a big impact on business and consumer confidence in Ireland. There is need for European support in Ireland to improve financing conditions, not only for infrastructural projects but also for enterprises,” he said.

Despite Japan’s reputation for economic sluggishness, Tokyo is flooded with help-wanted signs. The unemployment rate has fallen to 3%, and on Tuesday the government said the number of unemployed people fell below two million for the first time since 1995. It also said there are 140 jobs for every 100 people looking for work, the highest level in a quarter-century, The Wall Street Journal reported. If the economy expands in the current quarter, as economists expect, it would be the longest growth stretch in six years. The growth is still sluggish, less than 1% expected this year.

Banca Popolare di Bari is poised to sell the riskier bonds in its landmark bad loan securitisation without the help of Italy's rescue fund, having turned to a US hedge fund instead, according to people familiar with the situation, Reuters reported. The Italian lender has lined up Davidson Kempner Capital Management for both the mezzanine and junior notes in the Popolare di Bari NPLs 2016 securitisation, three people with knowledge of the matter said. The 14m mezzanine chunk is rated B(High)/B2, while the 10m junior slice is unrated.

Sales of second-hand ships used to haul commodities such as iron ore, coal, grain and fertilizer have hit a seven-year high in 2016 as the industry creeps out of an eight-year downturn that has sunk several fleets of shippers, Reuters reported. Seaborne transport, which accounts for 85 percent of global trade, has seen a tentative recovery in the rates shippers charge to carry dry-bulk cargoes, which has encouraged buyers to jump at the bargain prices for second-hand vessels.