Headlines

The Bank of England will have to rethink how it acts as lender of last resort after Britain failed to revise incoming EU rules that could scupper its scheme to give covert support to banks in difficulty, the Financial Times reported. Three EU countries rebuffed Britain’s last-minute pleas to “clarify” the fine print of an agreed rule book on bank crises so that central banks are allowed secretly to prop up lenders facing short-term funding difficulties.

Get ready for the biggest vote in the Co-op's 170-year history. Amid the squabbles, resignations and rows over pay, the poll on 17 May on boardroom reform will take place with the organisation's finances looking ghastly, The Guardian reported in a commentary. This is where attention will soon be concentrated once the Co-op Group publishes its accounts for 2013. It is also why the group's lenders, who have remained silent so far, could yet influence the struggle for power. Group debts were £1.2bn at the half-year stage.

Argentina’s biggest unions paralyzed metro, train and bus services today and blocked the main entrances into the capital to protest rising prices and crime, Bloomberg News reported. Trash started to pile up in downtown Buenos Aires as garbage collection was suspended and union members blocked Corrientes, one of the main thoroughfares with a sign that read “enough economic adjustments,” a reference to a 19 percent devaluation in January and a sharp increase in interest rates.

A significant number of company failures are expected to materialise this year, despite new figures showing a continued steady decline in the level of corporate insolvencies during the first quarter of the year, the Irish Examiner reported. According to corporate recovery and insolvency experts, Kavanagh Fennell, the first three months of this year saw a near 13% year-on-year reduction in insolvencies, with 303 failures being recorded compared to 347 for the same period last year.

Rusal has received approval from its lenders for “forbearance”, in a move that will stave off default as it seeks to hammer out a restructuring of its $10bn net debt pile, the Financial Times reported. The world’s largest aluminium producer has been negotiating with creditors since last year to change the terms of its debts, as its profitability is weighed down by aluminium prices at four-year lows. However, it failed to receive the necessary unanimous support from a group of international banks before a repayment that was due this week.

Russian capital outflows in the first quarter were the largest since the last three months of 2008 when the collapse of Lehman Brothers Holdings Inc. triggered the biggest credit squeeze since the Great Depression. Net outflows totaled $50.6 billion, more than double the $17.8 billion that left in the previous quarter, the central bank in Moscow said in a statement on its website today. In the final quarter of 2008, capital outflows were $132.1 billion. Outflows for the whole of last year reached $59.6 billion.

Europe’s corporate executives would have to seek shareholder approval for their salaries and justify the pay gap between management and their workers under Brussels’ latest remuneration clampdown. Michel Barnier, the EU commissioner who saw through the banker bonus cap, unveiled a fresh round of measures designed to strengthen corporate governance and give investors more influence.

Personal insolvency in Australia has increased by 6.1 per cent compared to the same quarter last year, despite the number of personal insolvency agreements being at their lowest since 2007, The Australian reported. The closures in the Victorian car manufacturing industry and the decline in the West Australian mining sector are being blamed for the results, with those states showing the highest increases in personal insolvency in statistics released by the Australian Financial Security Authority yesterday.

European banks are bracing for additional capital charges as a result of stricter capital rules proposed by the European Banking Authority, Deutsche Bank AG's co-Chief Executive Jürgen Fitschen said Wednesday, The Wall Street Journal reported. Regulators have long required banks to set aside capital as a cushion for bad times. Since the financial crisis of 2008, they have raised these requirements and set tighter standards for what can be considered "safe" capital.

Years of cheap credit have inflated corporate and sovereign debt in emerging markets that now find themselves at greater risk of capital flight if global interest rates rise further, the International Monetary Fund said. While the IMF predicts a smooth withdrawal of monetary stimulus by the Federal Reserve, a “bumpy exit” is possible, Jose Vinals, the head of the IMF’s capital markets department, said in prepared remarks. The result could be a faster-than-anticipated increase in interest rates, widening credit spreads and greater financial volatility, he said.