Headlines

Britain and other non-euro states are at risk of losing their influence over financial legislation as single currency members pursue their banking union project, respondents to a UK Treasury review have warned, the Financial Times reported. The report into the balance of power between Westminster and Brussels recorded strong backing for Britain’s membership of the single market, with leading companies saying it was a key reason for their decision to locate in London.

Spain has taken an important step toward completing the cleanup of its banking sector by selling the state-owned Catalunya Banc to BBVA for 1.19 billion euros, or $1.6 billion, the International New York Times DealBook blog reported. The sale, announced on Monday night by the state banking restructuring fund, comes after a difficult and delayed auction process for Catalunya. Spain had to inject more public money into the lender than initially expected to attract bidders.

A defect in the personal insolvency legislation that gives banks extra powers to vote down debt deals will be fixed, officials have pledged. The Department of Justice insisted the change to the personal insolvency legislation will be given priority when the Dail returns in the autumn, The Independent reported. But it emerged at the weekend that the Government has known about a flaw in the insolvency law since last April. A briefing note provided to new Justice Minister Frances Fitzgerald has informed her of an urgent need to amend the Personal Insolvency Act 2012.

Euro zone public debt rose to 93.9 per cent of economic output in the first quarter of this year, approaching the peak it is expected to reach later in 2014, official data showed on Tuesday, the Irish Times reported on a Reuters story. Government debt of the 18 countries sharing the euro stood at €9.055 trillion in the first three months of this year, compared to €8.905 trillion in the last quarter of 2013, the EU’s statistics office Eurostat said.

The Japanese government trimmed its economic-growth forecast for the current fiscal year ending in March but said that it won't give up on its long battle to bring its debt issuance under control, The Wall Street Journal reported. The world's third-largest economy is projected to grow 1.2% in the fiscal year ending next March, figures released by the Cabinet Office showed Tuesday. That compares with its previous projection in January for a 1.4% increase.

Governments across the world have collected more than €37bn of tax from secret offshore accounts since 2009, it emerged on Monday as new details were unveiled of the next phase of the global crackdown on tax evasion, the Financial Times reported. The Organisation for Economic Co-operation and Development published its global standard for automatic information exchange, aimed at removing the secrecy that provides evaders with safe havens for their cash.

The Government is planning new legislation to protect borrowers whose loans were sold to unregulated financial entities in the wake of the crash, the Irish Times reported. Up to 10,000 mortgages are now controlled by institutions which are under no obligation to act in accordance with the Central Bank’s code of conduct on mortgage arrears. The code obliges financial institutions to act within certain parameters when it comes to dealing with problem loans. It also affords borrowers complaints and appeals procedures should they feel unfairly treated.

China’s total debt load has climbed to more than two and a half times the size of its economy, underscoring the difficult challenge facing Beijing as it seeks to spur growth without sowing the seeds of a financial crisis, the Financial Times reported. The total debt-to-gross domestic product ratio in the world’s second-largest economy reached 251 per cent at the end of June, up from just 147 per cent at the end of 2008, according to a new estimate from Standard Chartered bank.

Banco Bilbao Vizcaya Argentaria SA won an auction to buy nationalized bank Catalunya Banc SA, Spain's bank-rescue fund said Monday, The Wall Street Journal reported. Spain's second-largest bank by market capitalization offered to pay €1.2 billion ($1.62 billion) for the lender, the bank-rescue fund said. In a surprise move, BBVA beat out rivals Banco Santander SA and Caixabank SA, which submitted binding offers to the rescue fund on Friday, according to people familiar with the sales process.

The Bundesbank has backed the push by Germany’s trade unions for inflation-busting wage settlements, in a remarkable shift in stance from a central bank famed for its tough approach to keeping prices in check, the Financial Times reported. Jens Ulbrich, the Bundesbank’s chief economist, told Spiegel, a German weekly, that recently agreed pay rises of more than 3 per cent were welcome, despite being above the European Central Bank’s inflation target of below but close to 2 per cent.