Headlines

Almost half of Poland’s credit unions are close to bankruptcy, as a collapse in the sector’s financial health strains the country’s banking bailout fund, the Financial Times reported. The industry is a primary source of funds for millions of poor and working-class people, mainly in rural areas and smaller cities. Of the 55 credit unions — known as SKOKs in Poland — that were operating 12 months ago, two have been declared bankrupt, two have been bought by banks in fire sales, and two have been forcibly merged.

High Street fashion chain Bank has fallen into administration, putting 1,500 jobs at risk, BBC News reported. "A review of the business has determined that a solvent turnaround would not be possible," said Bill Dawson from Deloitte, which has been appointed as administrator. The chain, which has 84 stores and 1,555 employees, has been loss-making for a number of years, Mr Dawson said. It was sold by JD Sports to investment firm Hilco Capital in November.

As a caustic election campaign in Greece revives fears that the country could leave the euro, European officials are taking an increasingly hard line toward Athens, saying they want to keep Greece in the single currency, though not at any cost, the International New York Times reported. The admonishments have stacked up in recent days — from Berlin, Paris and Brussels — intensifying what is shaping up to be another high-stakes standoff between Europe’s leaders and the eurozone’s most-troubled country.

Germany has insisted that it expects Greece to stay in the eurozone, despite a news report claiming Berlin was ready to see Athens quit the common currency if the populist Syriza party wins this month’s snap election and reneges on the country’s reform programme, the Financial Times reported.

From the days when monarchs over-borrowed for their mercantile adventures, to Argentina’s recent failure to pay its creditors, countries have long run into trouble paying back what they have borrowed. Spain’s 16th-century king, Philip II, reigned over four of his country’s defaults. Greece and Argentina have reneged on their commitments to bondholders seven and eight times respectively over the past 200 years. And most countries have defaulted at least once in their history. But what precisely happens when countries stop paying what they owe?

Bonds of Kaisa Group Holdings Ltd., a developer based in the southern Chinese city of Shenzhen, plunged to record lows after the resignation of its chairman triggered a default on one of its loans, Bloomberg News reported. The developer’s $800 million of 8.875 percent notes due 2018 and sold to investors at par in March 2013 tumbled to 40.9 cents on the dollar as of 5:02 p.m. in Hong Kong, from 66.3 cents on Dec. 31, sending yields to 45.7 percent. Kaisa was unable to repay a HK$400 million ($51.6 million) loan from HSBC Holdings Plc on Dec.

Mario Draghi, the president of the European Central Bank, may be pushing hard for a weaker euro to spur growth in Europe, but his central bank peers seem to be several steps ahead of him, the International New York Times DealBook blog reported. In an interview with a German newspaper on Friday, Mr. Draghi, known for using his public comments to achieve policy goals, said the threat of deflation might force his bank to take more aggressive stimulus measures, which could include buying eurozone bonds in bulk.

The Argentine government and a holdout group of bond creditors led by billionaire Paul Singer will soon have a chance to renegotiate a longstanding debt dispute that U.S. courts and the United Nations have wrestled with and that ultimately could affect debt restructuring worldwide, The New Zealand Herald reported on an AP story. The so-called Rights Upon Future Offers clause, built into renegotiated debt exchanges in 2005 and 2010, expires at midnight Wednesday. The clause obligated Argentina to provide older creditors the same terms it gave creditors in any new negotiations.

Canada’s Nortel Networks Corp. is appealing a U.S. court ruling that could put the bulk of the dissolved company’s cash into the hands of distressed-debt trading firms, The Wall Street Journal reported. The ruling under attack blessed a settlement between Nortel’s U.S. unit and investors who bought the company’s debt after its 2009 collapse. The pact allows bondholders to collect more than $1 billion in interest on their $4 billion holdings in the former telecommunications company.

The sale of Novo Banco, the lender that emerged from the breakup of Portugal’s Banco Espirito Santo, has drawn interest from 17 entities after firms including Banco Santander and Banco BPI said they may make bids. The Bank of Portugal announced the number following the New Year’s Eve deadline for entering the process, saying it would check whether the parties met pre-qualification requirements. Potential investors will get information and be invited to present non-binding bids. The Lisbon-based central bank is not identifying entities at this stage.