Headlines

Portugal’s central bank has offered to partly compensate Novo Banco bondholders who lost money when their securities were transferred to a “bad bank” last month in a bid to ease tensions with the government and furious international investors, the Financial Times reported. The move is seen as an attempt to repair reputational damage caused by losses suffered on almost €2bn of bonds which provoked threats of lawsuits.

China's volatile stock markets fell more than 1 percent on Wednesday, though mounting chatter about imminent policy stimulus provided some support against the backdrop of a fresh slide in oil prices, which hit stock markets across the globe, Reuters reported. Asian and European stocks were down sharply as U.S. crude sank beneath $28 a barrel for the first time since 2003, hammering energy stocks and boosting safe havens.

Emerging market borrowing costs hit their highest level in five years on Wednesday with investors warning that the developing world faces a debilitating credit crunch, the Financial Times reported. Selling pressure is being fanned by weakening local currencies, leaving borrowers of dollar-denominated debt, including Brazil and South Africa, facing sharply higher interest costs. Amid a wider slide in global stock prices, investor flight from Asia, the Middle East and Latin America led one investor to dub the day “Black Wednesday” for emerging markets.

Perhaps the most important question hanging over the European economy this year is whether Italy’s recovery is for real, The Wall Street Journal reported. Statistics show that Italy last year emerged from its seven-year slump, growing by 0.8% in 2015 and is widely forecast to grow by 1.5% this year, and unemployment has fallen from a peak of 13% to 11.3%. Surveys show business and consumer confidence has rebounded—indeed, consumer confidence is at its highest levels in more than a decade.

Policy makers at the Bank of Canada were leaning toward another rate cut when they began their deliberations ahead of Wednesday’s rate announcement, but ultimately decided to stand pat, Governor Stephen Poloz said, The Wall Street Journal reported. The central bank held the key rate at 0.5% after considering expectations for future government stimulus spending and the risks associated with the recent plunge in the value of the Canadian dollar, Mr. Poloz said.

There was a 70% increase in the number of permanent solutions agreed through the Insolvency Service of Ireland last year, RTÉ.ie reported. The ISI said the recent removal of the banks' veto over proposed arrangements involving debtors' homes has already resulted in financial institutions reversing some of their own rejection decisions. Lenders overturned four out of 12 rejection decisions which were appealed last month. There were 1,700 permanent solutions for debtors agreed last year, a 70% increase on 2014.

Azerbaijan is to impose a 20 per cent tax on transactions to remove cash from the country, as the oil-dependent government tries to contain a currency collapse that has triggered public protests. Baku’s imposition of capital controls is one of the most extreme measures taken so far by former Soviet countries as the region grapples with a crisis triggered by the plunge in oil prices to 13-year lows, the Financial Times reported. The manat has tumbled by more than a third since the central bank abandoned its peg to the dollar last month.

Power companies with wind-generation capacity could take over transmission line projects in Brazil operated by Abengoa SA after the Spanish construction group's insolvency filing halted work on the systems, Reuters reported. Candidates include groups like Renova Energia SA and CPFL Renovaveis SA that would lose revenue if the transmission lines go unfinished or remain inactive, three specialists with knowledge of the discussions said on Monday. Any proposal to take over Abengoa's rights would require approval from Brazil's electrical power regulator Aneel.

Behind the numbers showing China’s continued slowdown at the end of last year lies a warning for Communist Party leaders who have been equally determined to embrace economic change and to ensure a rapid pace of growth, Bloomberg News reported. The flashing yellow light: there’s less and less power behind policy makers’ stimulus. For each $1 in credit expansion, China added the equivalent of 27 cents of gross domestic product last year, the least since 2009, according to data compiled by Bloomberg from government figures released Tuesday. As recently as 2011, each $1 generated 59 cents.

Primorsk International Shipping Ltd., which operates a fleet of ice-class oil tankers in the Arctic, has filed for bankruptcy protection after reaching the terms of a debt-for-equity swap with bondholders, The Wall Street Journal reported. The oil shipper, registered in Cyprus, has been in talks with a group of Norwegian bondholders on the terms of a debt restructuring for more than a year, said Holly Etlin, the company’s chief restructuring officer, in an affidavit filed Sunday with the U.S. Bankruptcy Court in New York.