Headlines

In the famous Big Mac index of global currency values against the US dollar, Venezuela makes a surprise entrance as the third most expensive place in the world to eat a burger, the Financial Times reported. This unexpected finding can be explained by two factors: the array of fixed exchange rates set by a country that has to import almost everything apart from oil and the rampant inflation that has pushed up prices more than 60 per cent in 2014. For investors in the country’s debt, it is not good news.

German exports tumbled 5.8 per cent in August compared with July – the biggest drop since the peak of the global financial crisis in January 2009. The economy now risks slipping into recession in the third quarter, and the government has already lowered its growth forecasts for 2014 and 2015, the Financial Times reported. Those developments are unsettling a Germany corporate sector that has been a robust counterweight to the gloom in much of Europe ever since it staged a rapid recovery from the 2009 crisis, thanks to booming emerging market demand for machinery, chemicals and autos.

The European Union’s banking watchdog said Bulgaria’s central bank and deposit insurance fund were breaching the bloc’s deposit-guarantee law by not allowing depositors to access their savings at Bulgaria’s Corporate Commercial Bank, The Wall Street Journal reported.

Two businessmen in dispute with AIB over more than €6 million in property debts say the bank forged their signatures on loan documents, the High Court heard yesterday, the Irish Times reported. Earlier this year, State-controlled AIB appointed EY as receivers to properties in Ireland and Britain belonging to businessmen Brendan McCleary and Brendan Hamilton on foot of a series of loans the bank claims are overdue.

Grupo Oi SA, the Brazilian telecommunications company struggling with rising debt and shrinking market share, said the demise of an investment vehicle that owed the company's Portugal Telecom SGPS SA unit almost 1 billion euros ($1.28 billion) is unlikely to impact operations, Reuters reported. In a filing with Brazil's securities watchdog CVM, Oi said its Oi, Portugal Telecom and TelPart units will not be affected by the collapse of Rioforte, as the vehicle is known.

The European Central Bank’s investigation of the eurozone’s largest lenders is raising further concerns over the future of German publicly owned Landesbank HSH Nordbank, as its bloated shipping portfolio comes under intense scrutiny, the Financial Times reported. Germany’s largest shipping lenders, including HSH Nordbank, NordLB and Commerzbank, will see their shipping assets written down by between 10-20 per cent in the ECB’s stress tests, according to bankers familiar with the investigations.

Saudi contractor Mohammad Al-Mojil Group's (MMG) board had approved a recovery plan that use most of its existing capital base to pay off debts and new cash raised through a share issue, it said on Sunday, Reuters reported. The firm, which got into difficulty after over-extending itself trying to take advantage of a boom in construction in the kingdom, has not traded on the Saudi bourse since July 2012, when its shares were suspended by the regulator after breaching rules relating to accumulated losses. MMG said in September its accumulated losses for the period ending Aug.

Six years after Iceland’s banks defaulted on $85 billion in debt and brought the Atlantic island’s economy to its knees, Islandsbanki hf is seeking to sell shares to international investors, Bloomberg News reported. The island’s second-largest bank, formed from the remnants of failed Glitnir Bank hf, wants to sell shares to investors in a Scandinavian capital or London, the Reykjavik-based bank’s Chief Financial Officer Jon Omarsson said in an Oct. 16 interview in Stockholm.

A court in Luxembourg has denied a creditor-protection request from the main holding companies of the Espírito Santo empire, paving the way for a liquidation of all its assets, The Wall Street Journal reported. Espírito Santo International SA and Rioforte Investments SA filed the request in July after they were unable to meet debt obligations. Espírito Santo International, whose main unit is Rioforte, was found to be in serious financial trouble earlier this year following an audit ordered by the Bank of Portugal. The audit also found accounting irregularities at the holding company.

As the Cypriot economy reeled from the collapse of its second-largest bank in 2013, the European Central Bank faced a thorny question: Should it keep the institution, Cyprus Popular Bank, alive with short-term loans or pull the plug? By many financial measures, the bank was failing, the International New York Times DealBook blog reported in an analysis. Stung by a disastrous bet on Greek government bonds, Cyprus Popular Bank had been in trouble for the better part of 2012 and depositors were withdrawing their savings in ever larger numbers. It needed cash and fast. Under E.C.B.