Headlines

Mario Draghi, the president of the European Central Bank, today warned “heightened geopolitical risks” threatened to halt the weak recovery in the eurozone, the Financial Times reported today. Draghi pointed to the crisis in Ukraine, where Russian-backed rebels have been fighting government forces for months, as one of the reasons the eurozone recovery may stall.

African Bank Investments Ltd., South Africa’s largest unsecured loan provider, lost about 90 percent of its market value after forecasting a record loss and saying it needs to tap investors for $791 million of fresh capital, Bloomberg News reported yesterday. African Bank is reeling after saying its chief executive officer resigned, losses would be at a record this year and it would need to tap investors for funds for the second time in less than a year.

Australia’s jobless rate has climbed to its highest level in 12 years, underlining the challenges faced by an economy in transition following the end of a decade-long mining investment boom, the Financial Times reported today. The seasonally adjusted unemployment rate unexpectedly jumped to 6.4 percent in July, from 6 per cent in June, reflecting an increase in the number of people looking for work and a small drop in the number of people employed.

Portuguese banks will work together with the authorities for the swiftest sale of the new, healthy bank carved out of the troubled Banco Espirito Santo, the head of the Portuguese Banking Association (APB) said yesterday, Reuters reported. Fernando Faria de Oliveira told Reuters that the intervention by the Bank of Portugal to rescue one of the country's largest lenders that involved an injection of 4.9 billion euros mostly in state loans, was positive considering BES's systemic importance.

Canadians from 35 to 44 years old added the most relative to other age groups to their debt loads as rising home prices led them to take out larger mortgages, according to a report by Royal Bank of Canada, Bloomberg News reported today. People in that age bracket had liabilities equal to 49 percent of their net worth in 2012, up from 31 percent for the same group in 1999, the report by Royal Bank economists Paul Ferley and Nathan Janzen said. The figures compare with 9 percent and 12 percent for people aged 55 to 64.

Two Russian travel operators declared bankruptcy as sanctions over Ukraine weaken the ruble and curb demand for foreign travel, particularly among state employees, Bloomberg News reported yesterday. Moscow-based Labirint suspended operations Aug. 2, while Intaer followed today, cutting off services to about 30,000 customers who bought trips to destinations including Greece, Turkey and Egypt, according to the Federal Tourism Agency.

A panel of the International Swaps and Derivatives Association today ruled that the Portuguese central bank's decision to break up Banco Espírito Santo won't trigger a payout on insurance-like contracts linked to the stricken lender's debt, the Wall Street Journal reported today. ISDA was asked on Monday to rule whether the Portuguese Central Bank's decision to split BES into two would qualify as a bankruptcy credit event, meaning that any contracts on BES debt—known as credit default swaps—would be activated.

Insolvent project developer Solarstrom has sold the last three projects in its German portfolio with a total capacity of 5MW, PV-Tech.com reported today. The company also confirmed that it is in talks with investors from Asia, Europe and North America about its long-term future. The collapse of equipment suppliers and delays to project sales created a cashflow problem that forced the company into insolvency. With impending project sales in Italy, the firm is optimistic that it will meet its obligations and secure an investor.

Italy fell back into recession for the third time since 2008, data showed today, building up pressure on Prime Minister Matteo Renzi to accelerate the pace of economic reforms while keeping the country's accounts in order, the Wall Street Journal reported yesterday. Gross domestic product in the euro zone's third-largest economy dropped 0.2 percent in the second quarter of 2014 from the previous three months, national statistics institute Istat said today, citing preliminary data.

A reluctance among some developers in China to sell units at prices lower than they could fetch just months ago threatens to cause a swelling in unsold properties, Bloomberg News reported today. The worsening glut would extend a slide in construction that’s already put a drag on the world’s second-largest economy, and counter policy makers’ efforts to stimulate the real-estate industry with loosened rules. In Nanjing, eastern China, nine housing projects originally planned for sale in the first half of 2014 were held for later this year, consulting firm Everyday Network Co. says.