Headlines

Germany’s top central banker has warned the European Central Bank against buying securitised debt, saying that such a move could turn it into the bad bank of Europe, the Irish Times reported. “The revival of the securitisation market is not a primary task of monetary policy,” European Central Bank policymaker and Deutsche Bundesbank president Jens Weidmann told an audience in Halle in eastern Germany.

Mobilicity has received another extension of court protection from creditors, this time until Sept. 26, saying it has sufficient resources to maintain service to its wireless phone customers until at least that date, The Toronto Star reported.

A federal appeals court in Chicago said auditor Grant Thornton LLP must again face a lawsuit over its alleged role in the collapse of Italian dairy company Parmalat SpA, while lamenting that its decision puts the nearly 10-year-old case on the brink of starting anew, Reuters reported. Wednesday's decision by the 7th U.S. Circuit Court of Appeals overturned an April 2013 dismissal of the case by U.S. District Judge John Darrah in Chicago. The appeals court ordered that the case be moved to a state court in Cook County, which includes Chicago, where Grant Thornton is based.

Argentina is being pushed toward a new default after a U.S. Supreme Court decision favored holdout creditors seeking payment on bonds it defaulted on in 2001-2002, Economy Minister Axel Kicillof warned United Nations diplomats on Wednesday, Reuters reported. Referring to those creditors as "vulture funds," Kicillof said the June 16 decision by the top U.S. court to deny Argentina the chance to appeal a lower court ruling means it faces an insurmountable payment to all existing bondholders, given it has just $28.5 billion in foreign currency reserves.

Brazil plans to sell billions of dollars worth of offshore oil rights to state-run oil company Petrobras, a move expected to saddle the company with new costs even as its debt soars and it struggles to meet existing production targets, Reuters reported. Shares of Petroleo Brasileiro SA, as Petrobras is formally known, fell in Sao Paulo trading on Tuesday. Preferred shares, its most-traded class of stock, slipped 3.9 percent to a nearly three-week low.

Singapore said banks with a “significant retail presence” in the city-state will soon be required to maintain some liquid assets in the country to support their short-term cash outflows, Bloomberg News reported. The new liquidity framework applies to all currencies, and banks also need to hold liquid Singapore dollar assets separately to manage their liabilities in the local currency, Lim Hng Kiang, the deputy chairman of the Monetary Authority of Singapore, or MAS, said in a speech last night.

It sounds like an offer too good to refuse: nearly unlimited loans at an annual interest rate of only 0.25 percent. Borrow $1 million for four years, and the interest per year would be barely a rounding error: $2,500. That is effectively the offer the European Central Bank, as part of its ambitious new effort to revive the euro zone’s economies, has just made to commercial banks, the International New York Times reported. Yet it is by no means certain that banks will want that cheap money, and that could defeat the purpose of the program.

Russian bank VTB's investment unit VTB Capital said it does not have any plans to provide liquidity or capital resources to Bulgaria's Corporate Commercial Bank (Corpbank), which was taken over by the country's central bank on Friday after a run on the bank, Reuters reported. VTB Capital owns around 9.1 percent of Corpbank's shares and bought the shares as part of a structured finance transaction, it said in a statement. Its exposure to Corpbank did not exceed 10 million euros from the outset, the bank said, adding that the amount was subsequently fully hedged.

The court-appointed official overseeing the US bankruptcy of Seán Dunne has asked an American court for permission to examine, in private, documents from Irish and Swiss family law proceedings in which the developer is involved, the Irish Times reported. Bankruptcy trustee Richard Coan has also asked to question the Co Carlow developer (59), now living in the US, on the records at a private hearing if required.

Romanian President Traian Basescu signed into law the new Insolvency Code. The legal framework establishing the new preemptive and insolvency procedures was attacked in Constitutional Court on Aprill 22 by a group of PNL deputies who argued that the bill goes against free access to justice and the right to property, Business Review reported. On May 21st, the Constitutional Court established that the bill is in fact constitutional.