Headlines

Ukraine's sixteenth largest lender, Financial Initiative Bank, has been declared insolvent, the central bank said on Wednesday, as it pushed ahead with a drive to clean-up the country's financial system. Under pressure from the International Monetary Fund, which has agreed a $17.5 billion bailout for Ukraine in exchange for reforms to the over-populated and corrupt system, Kiev has closed more than 50 banks over the past 18 months. That cut the number of active banks by around 25 percent.

Some of the best-paid people in this country—its lawmakers—are proposing an unusual measure: docking their own salaries, The Wall Street Journal reported. The volunteered pay cut is part of a new austerity descending on Africa’s top economy. Nigeria’s government makes most of its money from oil revenue, which has shrunk along with global energy prices. President Muhammadu Buhari came to office in May pledging to root out extravagant spending by a government that has grown accustomed to unchecked oil wealth.

Greece’s lenders on Tuesday were scrutinizing a proposal seen as a potential breakthrough on a last-minute bailout deal, but significant concerns by more demanding creditors suggest that further days of tough negotiations lie ahead before an agreement can be clinched, The Wall Street Journal reported. After months of virtual deadlock, officials emerged from a string of meetings in Brussels on Monday optimistic over a Greek concession on pensions.

In the eyes of international lenders, Portugal is a shining example of what Greece should have been: a bailed-out country that co-operates with its creditors, stoically enduring years of austerity to bring about reforms that gradually improve an ailing economy, the Financial Times reported. But Lisbon’s status as eurozone posterchild — cited as “proof” that adjustment programmes work by Germany’s hawkish finance minister Wolfgang Schäuble — would not be enough to shield it from the full blast of market turbulence if Greece exits the currency bloc.

Banks will be able to claw back bonuses from their most senior managers for up to a decade under rules published on Tuesday by UK regulators, the Financial Times reported. The Prudential Regulation Authority and Financial Conduct Authority said in a joint statement on Tuesday that they were pushing ahead with rules for a wider seven-year clawback period, but that a further three years is being considered for the top tier of banks’ management where regulators find problems, to run concurrently with a seven-year bonus-deferral period.

Russia’s sufficient reserves and flexible monetary policy ensures the country’s financial stability for now, but a possible interest-rate increase in the U.S. and unpredictable oil prices keep the central bank ready to intervene, the Bank of Russia said Tuesday. Facing soaring inflation and a contracting economy, the Bank of Russia has been increasingly active in adjusting its monetary policy over the past months in an attempt to preserve financial stability, The Wall Street Journal reported.

The scandal which enveloped the Co-operative Bank was reawakened on Tuesday when the bank revealed it was facing fines from City regulators over the events that led to its near collapse two years ago, The Guardian reported. The bank is now just 20% owned by the Co-operative Group of supermarkets and funeral homes after an emergency fundraising was required to plug a £1.5bn shortfall uncovered in 2013. Control passed to hedge funds and other private investors after the rescue.

Bulgaria’s central bank governor resigned on Tuesday, as the poorest country in the European Union slowly recovers from a banking crisis and remains vulnerable to developments in neighboring Greece, The Wall Street Journal reported. Ivan Iskrov, who spent 12 years at the helm of the Bulgarian National Bank, said in a letter to Parliament that he will step down on July 10, three months before his term expires in October. Mr. Iskrov has been under pressure from political forces to resign in the wake of what turned out to be the worst banking crisis since the 1990s.

Greece and its European partners appeared on Monday night to be heading for a deal by the end of the week that would secure further funding for Greece and a likely promise of more debt relief in return for changes in the pension and tax systems, European Union officials said, the International New York Times reported. Even so, there is no great confidence that a deal reached when all 28 European Union leaders have a summit meeting here Thursday and Friday will be more than a short-term easing of the Greek crisis, which has preoccupied the European Union for the last five years.

Greek banks probably will get only a short respite with the help of the European Central Bank from accelerating deposit outflows unless a deal is struck soon by politicians, Bloomberg News reported. Greeks withdrew 20 percent of deposits held with the nation’s lenders this year as concern of an exit from the euro intensified. A drip-feed of liquidity from the ECB and Greece’s central bank has kept lenders afloat. As deposit outflows accelerated, the ECB increased the ceiling of funding three times in the last seven days alone.