Headlines

The warning comes after the central bank pressed Greece’s four largest lenders to set up “bad bank” divisions to tackle non-performing loans, which amount to 33 per cent of total lending of about €220bn. However, the banks have so far been reluctant to pull the plug on corporate borrowers unable to meet payments on their debt. “Following such a deep crisis we need strong consolidation [of the economy],” George Provopoulos told the Financial Times.

Switzerland, the world’s largest offshore financial centre, has pledged automatically to hand the details of foreign bank accounts to other countries in one of the most significant breakthroughs in the global crackdown on evasion, the Financial Times reported. At a ministerial meeting in Paris on Tuesday, Switzerland agreed to sign up to a new global standard on automatic information exchange, representing a decisive break with its centuries-old commitment to protecting the privacy of banking clients.

The Republic will not support a fresh legal challenge by the United Kingdom to the European Union’s proposed financial transactions tax, Minister for Finance Michael Noonan said yesterday, as 10 EU countries preliminarily agreed to introduce a new tax on share transactions by 2016 and civil groups in Ireland condemned Ireland for not signing up to the measure, the Irish Times reported. Mr Noonan was speaking after Sweden said it would potentially support the UK if it brought a second case to the European Court of Justice (ECJ) over the plan.

Boutique Jacob, a Canadian women's fashion retailer that filed for creditor protection in 2010, is liquidating its inventory and closing its stores after failing to find new financing or return to profitability, the company said on Tuesday, Reuters reported. Jacob, whose stylish, business-casual fashion catered to young professional women, said it was hurt by a challenging economy in recent years combined with an influx of international brands into Canada. Canadian retailers have come under increasing pressure from U.S.

Workers at Yue Yuen Industrial, which makes running shoes for Nike and Adidas at a big factory complex in Gaobu, said it underpaid their pensions for years, the Financial Times reported. After 11 days of protest, the Dongguan municipal government handed them a rare victory by saying the company should have based contributions on a higher pay level. Yue Yuen estimates that it will have to pay an additional $31m just this year after agreeing to base pension payments on workers’ total pay, including overtime.

Europe’s climb out of its debt crisis has been narrated by a long debate on whether the austerity imposed on countries that needed international bailouts would bring more pain than relief. Portugal’s move to exit its bailout gives new ammunition to the austerity advocates who have called for shredding European-style social safety nets that in many countries no longer seem affordable, the International New York Times reported in an analysis.

China’s great real-estate bust has begun, says Nomura. A combination of a huge oversupply of housing and a shortage of developer financing is producing a housing market downturn that could drive China’s GDP to less than 6% this year, The Wall Street Journal Real Time China blog reported. “To us, it is no longer a question of ‘if’ but rather ‘how severe’ the property market correction will be,” three Nomura analysts wrote in a report released Monday. And there isn’t much the government can do to head off problems.

Russian companies shut out of Western markets as a result of the Ukraine crisis are scouting the possibility of raising cash via Chinese or Singapore bonds instead, even if a large scale funding switch to Asia is likely to be a tall order, Reuters reported. Asian investors, eyeing the risks associated with Western sanctions, could prove a hard sell. Usually prolific borrowers, Russian firms' bond and loan issuance this year has languished as lenders fear getting caught up in U.S.

Suzlon Energy Ltd, the world’s fifth largest wind turbine maker, announced on Saturday a cash-less restructuring of its existing foreign currency convertible bonds (FCCBs) worth $485 million for five years, after nearly two years of complex negotiations with bondholders, Livemint.com reported. The Pune-based company has four different series of FCCBs issued to investors. Suzlon had failed to repay $209 million of debt on 11 October 2012 after bondholders rejected its request for a four-month extension. The default was the biggest on convertible bonds by an Indian firm.

The euro zone's bailout fund, the European Stability Mechanism, could directly invest in a troubled bank next year, after 8 percent of the bank's total liabilities are written off, the chairman of euro zone finance ministers said on Monday, Reuters reported. The bloc's leaders agreed in 2012 that the ESM must have the option of directly buying a stake in a troubled bank to break the "doom loop" that binds indebted governments to the unstable banks they are trying to prop up.