Headlines

The ruble tumbled the most since 2011 after a larger-than-forecast increase of Russia’s key interest rate failed to ease concern that the economy will remain hobbled by sanctions and capital flight. The Bank of Russia raised its key rate to 9.5 percent percent from 8 percent, according to a website statement. That surprised all 31 economists surveyed by Bloomberg. Governor Elvira Nabiullina is resorting to higher borrowing costs to halt a currency run even after three earlier increases failed to assuage investors concerned about President Vladimir Putin’s stance on Ukraine.

China’s shadow banking sector continued to grow at breakneck speed in 2013 and now ranks as the third largest in the world, a report released by the Financial Stability Board showed on Thursday, the Irish Times reported. The country vaulted ahead in the rankings under a new, more targeted definition of shadow banking adopted by the FSB, a task force set up by G20 economies in the wake of the 2008/09 global financial crisis to improve financial regulations.

Austria’s nationalized lender Hypo Alpe-Adria-Bank International AG said Thursday it has split itself between a wind-down unit, called Heta Asset Resolution GmbH, and its southeastern European network of banks, The Wall Street Journal reported. The split is part of the lender’s restructuring plan approved by the European Commission. Under the plan, the Austrian government—Hypo Alpe-Adria’s current owner—must sell off all of the bank’s assets or transfer them into a wind-down unit by mid-2015. Hypo Alpe-Adria was nationalized in 2009 after overextending itself in southeastern Europe.

On October 29th the World Bank released its annual “Doing Business” report, ranking 189 economies by how attractive they are to firms. That Singapore led the list again this year, with Eritrea stuck in last place, was less surprising than the fact that Ukraine leapt up the rankings, The Economist reported. This was in part due to improvements to its tax-collection system, introduced before its conflict with Russia flared up. The World Bank’s indicators seek to cover many aspects of a country’s business climate, but not the risk of invasion by a belligerent neighbour.

Now that Greece has said it will seek a credit line from the eurozone’s bailout fund once its rescue program runs out at the end of the year, the difficult negotiations on how to make the new aid palatable to both Athens and other European capitals have begun, The Wall Street Journal Real Time Brussels blog reported. The Greek government is looking at early elections next spring if Prime Minister Antonis Samaras fails to find a supermajority (in other words add an extra 25 lawmakers to his 155-delegate-strong coalition) to back a new president by March.

Argentina’s central bank tapped a currency swap line with its Chinese counterpart for the first time Thursday, requesting the equivalent of about $814 million at a time when its hard currency reserves are under pressure, The Wall Street Journal reported. Argentina and China agreed to the 70 billion yuan currency swap during a state visit by Chinese President Xi Jinping in July. Argentine officials say the agreement will make it easier for Chinese companies to invest in Argentina and strengthen the central bank’s depleted reserves.

Britain's banks will be forced to maintain significant financial safety nets under rules announced on Friday that industry leaders say could raise the cost of mortgages and penalise building societies, The Telegraph reported. The Bank of England is expected to go beyond global standards in revealing the leverage ratio – the level of financial reserves banks must hold to protect against a downturn – it expects banks to adopt.

The European Union said no nation has broken EU budget rules by a big enough margin to warrant immediate action, a move that gives France and Italy more time to win approval for their draft spending plans, Bloomberg News reported. “After taking into account all of the further information and improvements communicated to us in recent days, I cannot immediately identify cases of particularly serious non-compliance which would oblige us to consider a negative opinion at this stage in the process,” European Commission Vice President Jyrki Katainen said in a statement.

Led by Europe’s five biggest economies, 51 nations on Wednesday signed what Germany’s finance minister hailed as a milestone in the fight against tax evasion — an agreement that commits them all to automatic exchange of tax information starting in 2017, the International New York Times reported. The accord will end banking secrecy as it has been known for decades, the finance minister, Wolfgang Schäuble, told Germany’s Bild newspaper before the deal. It was an apparent bid by Mr.

Malaysian Airline System Bhd.’s majority owner, sovereign fund Khazanah Nasional Bhd., has invited investment banks to pitch for a role overseeing the airline’s restructuring, people familiar with the matter said, Bloomberg News reported. Khazanah has asked select banks to submit proposals by tomorrow, the people said, asking not to be identified as the matter is private. The fund, which controls 69.4 percent of Malaysia Airlines, has offered to buy the shares it doesn’t already own for 1.38 billion ringgit ($422 million) and delist the company by the end of the year.